<PAGE>
 
                                                                   EXHIBIT 10.39

                      LIMITED LIABILITY COMPANY AGREEMENT



                                      OF



                                 GL/PHP, LLC,



                     a Delaware limited liability company



<PAGE>
 
                               TABLE OF CONTENTS


<TABLE>

<S>  <C>                                                                  <C>
1.   Definitions.......................................................     1
2.   Formation.........................................................     6
3.   Name..............................................................     6
4.   Registered Office; Principal Place of Business....................     6
5.   Term..............................................................     6
6.   Purpose...........................................................     6
7.   Capital Contributions.............................................     7
8.   Capital Accounts; Allocations.....................................    10
9.   Distributions.....................................................    12
10.  Books and Records.................................................    13
11.  Bank Accounts; Certain Payments...................................    15
12.  Rights and Obligations of Members.................................    15
13.  Rights and Obligations of the Manager.............................    20
14.  Transfer of Interests.............................................    26
15.  Termination of the Company........................................    28
16.  Gain, Loss and Distributions on Liquidation.......................    29
17.  Sale of Assets....................................................    30
18.  Further Assurances................................................    30
19.  Notices...........................................................    31
20.  Limited Buy-Sell..................................................    32
21.  Amendment.........................................................    32
22.  Captions; Contents................................................    33
23.  Variation of Pronouns.............................................    33
24.  Governing Law.....................................................    33
25.  Successors and Assigns............................................    33
26.  Counterparts......................................................    33
27.  Negation of Third-Party Beneficiaries.............................    33
28.  Arbitration.......................................................    33
29.  Severability......................................................    34
</TABLE>

Exhibit A - Initial Capital Contributions and Interests of Members

<PAGE>
 
                                  GL/PHP, LLC

                      LIMITED LIABILITY COMPANY AGREEMENT


          THIS LIMITED LIABILITY COMPANY AGREEMENT is made as of February 26, 
1997 by and among G&L Realty Partnership, L.P., a Delaware limited partnership, 
as the sole Manager ("the Manager"), G&L Realty Partnership, L.P., a Delaware 
limited partnership, as a Member ("G&L Member"), PHP Healthcare Corporation, a 
Delaware corporation, as a Member ("PHP Member" and, together with G&L Member, 
collectively called the "Members").

     In consideration of the mutual benefits and covenants contained herein, the
undersigned hereby agree as follows:

     1.   Definitions.  As used in this Agreement, the following terms have the 
          -----------
meanings set forth below:

          1.1. "Act" means the Delaware Limited Liability Company Act, as 
amended, Del. Code Ann. title. 6, (S)18-101 et seq.
                                            ------

          1.2. "Additional Capital Contribution" has the meaning set forth in 
Section 7.2.
-----------

          1.3. "Additional Capital Contribution Date" has the meaning set forth
in Section 7.2.
   -----------

          1.4. "Adjusted Capital Account Balance" means, with respect to any 
Member, the balance, if any, in such Member's Capital Account as of the end of 
the relevant Year, increased by the amount of the minimum gain that such Member 
is treated as being obligated to restore pursuant to the next to last sentences 
of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5).

          1.5. "Affiliate" or "Affiliated Person" means, with respect to any 
Person, any other Person controlling or controlled by or under common control 
with such Person.  For purposes of this definition, the term "control" when used
with respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, through the ownership of voting 
securities, by contract or otherwise, and the terms "controlling" and 
"controlled" have meanings correlative to the foregoing.

          1.6. "Agreement" means this agreement and any amendment, modification 
or extension hereof.

<PAGE>
 
          1.7.  "Assets" means all of the assets of the Company including all 
Property and Credit Leases owned or entered into by the Company.

          1.8.  "Business Day" means any day except a Saturday, Sunday or other 
day which shall be in Los Angeles, California, or Reston, Virginia, a legal 
holiday on which banking institutions are authorized by law or executive action 
to close.

          1.9.  "Buy-Sell" has the meaning set forth in Section 20.
                                                        ----------

          1.10. "Capital Account" has the meaning set forth in Section 8.1.
                                                               -----------

          1.11. "Capital Contributions" means the Initial Capital Contribution 
and all Additional Capital Contributions to be made by a Member, pursuant to 
Section 7.
---------

          1.12. "Closing Date" means each date on which the Company purchases a 
Property or enters into any Credit Lease.

          1.13. "Code" means the Internal Revenue Code of 1986, as amended from 
time to time.

          1.14. "Company" means GL/PHP, LLC, a Delaware limited liability 
company, governed by this Agreement.

          1.15. "Company Budget" has the meaning set forth in Section 13.2.2.
                                                              --------------

          1.16. "Company Loan" has the meaning set forth in Section 7.4.
                                                            -----------

          1.17. "Contributing Members" has the meaning set forth in Section 7.3.
                                                                    -----------

          1.18. "Credit Lease" means each bond-type net lease relating to a 
particular Property approved for origination hereunder.

          1.19. "Defaulted Amount" has the meaning set forth in Section 7.5.
                                                                -----------

          1.20. "ERISA" means the federal Employee Retirement Income Security 
Act of 1974, as amended and in force from time to time.

          1.21. "Fair Market Value" means the price that would be paid by a 
willing buyer for the property being sold by a willing seller in an open market 
transfer with respect to which time is not of the essence.

                                       2
<PAGE>
 
          1.22. "Gross Income" means all items of income and gain that are 
included in the definition of Net Income or Net Loss.

          1.23. "Initial Capital Contribution" means the initial capital 
contribution to the Company to be made by a Member in the amount shown for such 
Member on Exhibit A to this Agreement.
          ---------

          1.24. "Initiating Member" has the meaning set forth in Section 20.
                                                                 ----------

          1.25. "Interest" means a Member's percentage interest in the 
Company, as indicated in Exhibit A, as such percentage interest may be modified 
                         ---------
as specifically provided in this Agreement, including the Member's economic 
interest and any right to vote or participate in management.

          1.26. "Investment Company Act" means the Investment Company Act of 
1940, as amended.

          1.27. "Lease Documents" means each Credit Lease and each other 
agreements, opinions, instruments and certificates furnished at the time of 
origination of the Credit Lease in connection therewith.

          1.28. "Lessee" means the lessee under a Credit Lease.

          1.29. "Lessor" means the Company, as lessor under a Credit Lease.

          1.30. "Majority in Interest of the Members" means the Members which 
own fifty-one percent (51%) or more of the Interests.

          1.31. "Manager" means G&L Realty Corp. and any other person named as 
Manager hereunder from time to time under Section 13.8, if any.
                                          ------------

          1.32. "Members" (singular, "Member") means collectively the Persons 
listed on Exhibit A to this Agreement, and singularly, any Person listed on 
          ---------
Exhibit A to this Agreement.
---------

          1.33. "Net Cash Flow" means with respect to any calendar month or 
other period, the gross revenues received by the Company during such period from
any source whatsoever, including, without limitation, rent of any kind and 
other amounts payable under each Asset, any origination fees received from 
Lessees, servicing compensation earned by the Company in connection with any 
securitization and any Net Proceeds and other receipts (but excluding Capital 
Contributions and any Company Loans), less the following, without duplication: 
                                      ----
(i) Operating Expenses; (ii) distributions made to enable Members to pay income

                                       3
<PAGE>
 
taxes in respect of their Interests; (iii) any Origination and Due Diligence 
Expenses; (iv) any amounts due on or with respect to the indebtedness of the 
Company (exclusive of secured debt owed to PHP Member) including, without 
limitation, any costs associated with the Company hedging interest rate risks or
other exposures in connection therewith; (v) all reasonable and necessary cash 
expenditures (including the establishment and funding of reserves, if deemed 
necessary by the Manager, but excluding the amounts described in the preceding 
clauses (i), (ii), (iii), (iv) and (v) and expenditures from established 
reserves); and (vi) amounts used to fund the origination of Credit Leases or 
purchase of Property or to pay or reimburse expenses associated therewith. Net 
Cash Flow shall be determined separately for each calendar month or other 
period, and shall not be cumulative.

          1.34. "Net Income" and "Net Loss" mean, respectively, an amount equal
to the Company's taxable income or loss, respectively, for federal income tax
purposes, determined in accordance with Section 703 (a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703 (a) (1) of the Code shall be included in
taxable income or loss), with the following adjustments: (i) any income of the
Company that is exempt from federal income tax and not otherwise taken into
account in computing Net Income or Net Loss pursuant hereto shall be included in
income; (ii) any expenditures of the Company described in Section 705 (a) (2)
(B) of the Code or treated as Section 705 (a) (2) (B) of the Code expenditures
pursuant to Treasury Regulation Section 1.704-1(b) (2) (iv) (i) and not
otherwise taken into account in computing Net Income or Net Loss pursuant
hereto, shall be deducted from income; and (iii) income, gain, loss and
deduction of the Company shall be computed as if the Company had (A) purchased
any property contributed by a Member on the date of such contribution at a price
equal to its Fair Market Value on such date, and (B) sold any property
distributed to a Member on the date of such distribution at a price equal to its
Fair Market Value on such date.

          1.35. "Net Proceeds" means the gross proceeds received by the Company 
from the sale, partial sale, financing, securitization (including any proceeds 
received as a result of the Company's ownership of any residual interest and/or 
security issued in any securitization) of or realization on all or any portion 
of the Assets less any sales, financing, securitization or collection expenses 
incurred in connection any such sale, financing, securitization or realization.

          1.36. "Non-Contributing Members" has the meaning set forth in
Section 7.3.
-----------

          1.37. "Offer" has the meaning set forth in Section 14.1.3.
                                                     --------------

          1.38. "Operating Expenses" means all reasonable and necessary 
out-of-pocket expenses incurred by the Manager and the Members in the 
administration and operation of the Company and the ownership of the Company's 
Assets, including, without limitation, accounting fees, legal fees and expenses 
and such other expenses of the Manager and the Members if and to the extent 
approved pursuant to this Agreement.  The Company shall reimburse each Member

                                       4
<PAGE>
 
and any Affiliates of such Member for such Operating Expenses, subject to, and 
only if and to the extent approved by, a Majority in Interest of the Members; 
provided, however, that any Operating Expense that is in excess any line item of
the Company Budget plus 5% shall require the approval of each of the Members.  
Operating Expenses, however, shall not include any overhead costs of the Manager
or any Member.

          1.39. "Origination and Due Diligence Expenses" shall include the 
following expenses incurred by or on behalf of the Company directly and 
exclusively in connection with (a) the negotiation and documentation of this 
Agreement, (b) the organizational costs of the Company and (c) the origination 
or purchase of any Assets, including, without limitation, the following:
(i) legal, printing, and other third-party out-of-pocket expenses incurred in
connection with the negotiation and documentation of this Agreement, (ii) the
organizational and qualification costs of the Company and (iii) expenses
incurred in connection with the origination or purchase or proposed origination
or purchase of an Asset and any indebtedness with respect thereto, including
documentation and negotiation of the Lease Documents, such indebtedness, review
and analysis of organizational documents of each Lessee, related documents and
court proceedings, if any, relating to the origination or purchase and any
financing of the Credit Leases or any portion thereof and the determination of
the rates and terms to be offered in any origination or purchase of any Credit
Lease, and any legal and other third-party and out-of-pocket costs associated
with the due diligence review with respect to any Asset, in every case.

          1.40. "Person" means an individual, partnership, limited partnership, 
limited liability partnership, trust, estate, association, corporation, limited 
liability company, or other entity, whether domestic or foreign.

          1.41. "Prime Rate" means the rate of interest announced from time to 
time by The Bank of America as its prime rate of interest.

          1.42. "Property" means collectively or singularly, as the context 
requires, the real property purchased by the Company and subjected to a Credit 
Lease hereunder.

          1.43. "Reduction Notice" has the meaning set forth in Section 7.5.
                                                                -----------

          1.44. "Removal Date" has the meaning set forth in Section 13.8.1.
                                                            --------------

          1.45. "Securities Act" means the Securities Act of 1933, as amended.

          1.46. "Service" has the meaning set forth in Section 10.5.2.
                                                       --------------

          1.47. "Termination Notice" has the meaning set forth in
Section 13.8.1. 
--------------

                                       5
<PAGE>
 
          1.48. "Treasury Regulations" means the regulations (including any 
temporary regulations) issued under the Code by the Department of the Treasury, 
as they may be amended from time to time, or any applicable successor 
regulations.  Reference herein to any particular section of the Treasury 
Regulations shall be deemed to refer to the corresponding provision of any 
applicable successor regulations.

          1.49. "Year" means the taxable year of the Company which will be based
on a calendar year.

     2.   Formation.  The Company shall be formed as of the date of the filing 
          ---------
of the Certificate of Formation for the Company with the Secretary of State of 
the State of Delaware as a limited liability company pursuant to the provisions 
of the Act.

     3.   Name.  The business of the Company shall be conducted under the name 
          ----
"GL/PHP, LLC".

     4.   Registered Office; Principal Place of Business.  The Company's 
          ----------------------------------------------
registered office in the State of Delaware shall be located at 12090 Orange
Street, Newcastle County, Wilmington, Delaware 19805 and the Company's
registered agent for service of process in the State of Delaware shall be
The Corporation Trust Company. The principal office of the Company shall be
c/o G&L Realty Corp., 439 North Bedford Drive, Beverly Hills, CA 90210.

     5.   Term.  The Company, as a limited liability company, shall commence as 
          ----
of the date of the filing of the Certificate of Formation for the Company with
the Secretary of State of the State of Delaware and shall continue until 
December 31, 2046, unless terminated earlier as hereinafter provided or as 
provided in the Act.

     6.   Purpose.  The business and purpose of the Company shall be to
          -------
(a) accomplish any lawful business or activity conducive to or expedient for the
protection or benefit of the Company and its Assets and related (directly or
indirectly, including but not limited to origination, purchase, disposition,
financing, and securitization of Property and/or the Credit Leases) to (i) the
acquisition of Property and the origination of Credit Leases approved pursuant
hereto; (ii) the sale, assignment, disposition or securitization of any of the
Property and/or the Credit Leases; (iii) incurring indebtedness and obtaining
financing for the Company to acquire the Property and originate Credit Leases,
including interest or other hedging facilities; (iv) the servicing and managing
of the Assets; and (v) taking such other activities that are performed by
operating finance companies having the foregoing purposes, (b) exercise all
other powers necessary to or reasonably connected with the Company's business
which may be legally exercised by a limited liability company under the Act, and
(c) engage in all activities necessary, customary, convenient, or incidental to
any of the foregoing.

                                       6
<PAGE>
 
     7.   Capital Contributions.
          ---------------------

          7.1.  Each Member hereby agrees to contribute as its Initial Capital 
Contribution the amount shown on Exhibit A to this Agreement. The capital 
                                 ---------
requirements to be funded out of such Initial Capital Contributions will consist
of all Origination and Due Diligence Expenses relating to the organization of 
the Company, the negotiation and documentation of this Agreement and the 
purchase by the Company of real property so long as each such properties will be
simultaneously subject to a Credit Lease and for any other purpose contemplated 
hereunder.

          7.2.  If at any time the Manager determines that additional funds 
("Additional Capital Contributions") are required by the Company for any Company
purpose, the Manager shall give notice to the Members (i) stating the aggregate 
amount of such Additional Capital Contributions (which Additional Capital 
Contributions, together with aggregate amount of all their outstanding Capital 
Contributions with respect to the Company as a whole, shall not exceed 
$4,500,000), (ii) stating in reasonable detail the reasons such Additional 
Capital Contributions are required, (iii) stating the date proposed for payment 
of such Additional Capital Contributions to the Company (which date, the 
"Additional Capital Contribution Date", shall not be less than ten (10) Business
Days after the date on which such notice is given), and (iv) requesting that 
each of the Members approve such Additional Capital Contributions.  On or before
the date which is five (5) Business Days after the date on which such notice was
given, the Members shall respond to the Manager indicating whether or not it 
approves such Additional Capital Contributions.  In the case of Additional 
Capital Contributions being so requested, any such Member not so responding 
within such five (5) Business Day period shall be deemed not to have given its 
approval of such Additional Capital Contributions.  If all Members approve such 
Additional Capital Contributions, the Manager shall (not less than (5) days 
prior to the Additional Capital Contribution Date) provide a notice so stating 
to each Member, and each Member shall be obligated to contribute to the Company 
on the Additional Capital Contribution Date in cash, an amount equal to such 
Member's Interest multiplied by the aggregate amount of the Additional Capital 
Contributions to be made on the Additional Capital Contribution Date.  If any 
Member fails to pay to the Company on the Additional Capital Contribution Date 
its entire share of any Additional Capital Contribution required pursuant to 
this Section 7.2, the sole remedy of the other Members shall be to proceed in 
     -----------
accordance with Section 7.3.  No Member shall be entitled or required to make 
                -----------
any Capital Contributions to the Company other than under Section 7.1 or as 
                                                          -----------
required by this Section 7.2.
                 -----------

          7.3.  In the event that Additional Capital Contributions are required 
to be made by the Members under Section 7.2, and one or more Members (the 
                                -----------
"Contributing Members") have tendered their entire share of the required 
Additional Capital Contributions on or before the Additional Capital 
Contribution Date, and one or more other Members (the "Non-Contributing 
Members") have failed to tender their entire share of the required Additional 
Capital

                                       7
<PAGE>
 
Contributions on or before the Additional Capital Contribution Date, the 
Interests of the Members shall be adjusted in accordance with Section 7.5 and 
                                                              -----------
the Manager shall proceed to call for Company Loans in accordance with 
Section 7.4.
-----------

     7.4. In the event that one or more Members fail to make any required 
Additional Capital Contributions, the Manager shall, within five (5) Business 
Days after the applicable Additional Capital Contribution Date, by notice to 
all other Members (other than any Non-Contributing Members), inform such other 
Members of such failure, and of the amount of the Non-Contributing Members' 
required Additional Capital Contributions, and request that such other Members 
(or their Affiliated Persons) make loans (each a "Company Loan") in the amount 
of such required Additional Capital Contributions of the Non-Contributing 
Members; provided, however, that no Member shall be required to make any such 
Company Loan. Each such other Member receiving such notice shall promptly give 
notice to the Manager indicating the amount (not to exceed the required 
Additional Capital Contributions) it (or its Affiliated Person) is willing to 
lend. In the event that the aggregate amount which Members are willing to lend 
hereunder exceeds such required Additional Capital Contributions, the lending 
Members (or their Affiliated Persons) shall make such loans in the proportions 
that their respective Interest bear to one another. Each Company Loan shall, to 
the fullest extent permitted by law, bear interest at an annual rate, determined
monthly and compounded monthly, equal to the Prime Rate plus three percent (3%) 
and otherwise consistent with then prevailing market terms for comparable 
unsecured borrowings. Any such Company Loan shall be paid (if not sooner paid), 
out of Net Cash Flow and Net Proceeds in accordance with Article 9. If no Member
                                                         ---------
or Members are willing to make a Company Loan to meet the additional capital 
needs of the Company, Additional Capital Contributions shall be called for and 
required pursuant to, and subject to the limitations set forth in, Section 7.2.
                                                                   -----------

     7.5. If at any time a Non-Contributing Member fails to make an entire 
Additional Capital Contribution required of such Member pursuant to Section 7.2,
                                                                    -----------
the Interest of such Non-Contributing Member shall immediately be reduced, 
effective as of the Additional Capital Contribution Date, with respect to any 
portion of the Additional Capital Contribution not so contributed by such 
Non-Contributing Member (such unpaid portion, the "Defaulted Amount"). Such 
reduction shall be in an amount equal to the percentage obtained by dividing (a)
the Defaulted Amount, by (b) the aggregate amount of Capital Contributions 
required to have been made as of the date of such calculation by all Members, 
including such Additional Capital Contribution, pursuant to Sections 7.1 and 
                                                            ------------
7.2.
---

     7.5.1   As an example, assume (i) that Member X's Interest is ten percent 
  (10%), and that Member X has made an Initial Capital Contribution to the
  Company pursuant to Section 7.1 of $9,500,000, where the aggregate Initial
                      -----------
  Capital Contributions made by all Members to the Company is equal to
  $95,000,000, (ii) that a (first-ever) call is made for Additional Capital
  Contributions from all Members of $2,000,000, (iii) that Member X is obligated
  to advance ten percent (10%) of the Additional Capital Contributions, (iv)
  that

                                       8
<PAGE>
 
  Member X does not make any portion of its required Additional Capital
  Contribution, and (v) that all the other Members make their required
  Additional Capital Contributions. Under the first paragraph of this Section
                                                                      -------
  7.5, the reduction of the Non-Contributing Member's (Member X's) Interest,
  ---
  expressed as a percentage, would equal $200,000/$97,000,000, or .206186%.
  Accordingly, Member X's Interest would be reduced from 10.00% to 9.793814%.

     7.5.2  Any reduction in the Interest of a Member under this Section 7.5 
                                                                 -----------
  shall be reflected in a simultaneous increase of the aggregate Interests of
  the Contributing Members in a like amount. Any such aggregate increase in
  Interests of the Contributing Members shall be shared among the Contributing
  Members in proportion to their respective Interest immediately prior to such
  increase.

     7.5.3  Any adjustments in Interests pursuant to this Section 7.5 shall be 
                                                          -----------
  automatic and without the necessity of any further action by any Member.
  Notwithstanding the foregoing, each Member agrees to execute such documents
  and take such additional actions as may be necessary to effectuate or evidence
  such adjustments and each such Member hereby constitutes and empowers the
  Manager (and its managers or its officers, as applicable), acting singly, to
  act alone as the attorney-in-fact of all Members with authority to execute,
  acknowledge, swear to and deliver such instruments as may be necessary or
  appropriate to carry out the foregoing provisions of this Section 7.5.
                                                            -----------

     7.5.4  The Manager shall give Notice (a "Reduction Notice") to all the 
  Members within thirty (30) days of the reduction of any Member's Interest 
  pursuant to this Section 7.5, informing the Members of such reduction, and of 
                   -----------
  their revised Interest after giving effect to such reduction.

     7.5.5  In the event that the Interest of a Member is reduced pursuant to 
  this Section 7.5, any Contributing Member may elect, by notice to the Manager
       -----------
  and the other Members given not more than thirty (30) days after the date of
  the related Reduction Notice, to cause the Assets to be valued as of the date
  of the Reduction Notice, and to the extent the net worth of the Company (net
  of liabilities) as of such date is more or less than the Capital Account
  balances of the Members as of such date (after reflection in such Capital
  Accounts of all adjustments thereto which would be necessitated by all other
  Company transactions for the taxable year of the Company in which such
  valuation occurs, all in accordance with Article 8), the difference shall be
                                           ---------
  deemed to be Net Income or Net Loss incurred by the Company which shall be
  credited or charged to the Capital Accounts of the Members based upon their
  Interests immediately prior to any dilution under this Section 7.5. The net
                                                         -----------
  worth of the Company shall be determined by the Manager on the basis of the
  Fair Market Value of the Assets.

                                       9
<PAGE>
 
  8. Capital Accounts; Allocations.
     -----------------------------

     8.1. A separate book capital account (a "Capital Account") shall be 
established and maintained for each Member in accordance with the regulations 
promulgated under Section 704 of the Code.  The Capital Account of each Member 
as of the close of each month of each Year shall be: (a) credited with (i) the 
amount of cash and the agreed-upon Fair Market Value of any property contributed
by such Member to the Company during such month (net of liabilities secured by 
such contributed property that the Company is considered to assume or take 
subject to under Section 752 of the Code), including cash contributed by a 
Member as such Member's Initial Capital Contribution, (ii) such Member's share 
of any Net Income during such month allocated to it under this Agreement, and 
(iii) such Member's share of other items required to be credited thereto under 
Treasury Regulation Section 1.704-1(b)(2)(iv); and (b) shall be debited with (i)
the amount of cash and the Fair Market Value of any property distributed to such
Member during such month (net of liabilities secured by such distributed 
property that such Member is considered to assume or take subject to under 
Section 752 of the Code), (ii) such Member's share of any Net Loss during such 
month allocated to it under this Agreement, and (iii) such Member's share of 
other items required to be debited thereto under Treasury Regulations Section 
1.704-1(b)(2)(iv). Any adjustments to the tax basis of the Company property 
under Sections 732, 734 or 743 of the Code will be reflected as adjustments to 
the Capital Accounts of the Members only in the manner and to the extent 
provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m). If any Asset is
to be distributed in kind, such Asset shall be distributed on the basis of its
Fair Market Value after the Members' Capital Accounts have been adjusted to
reflect the manner in which any unrealized gain or loss with respect to such
Asset (that has not been previously reflected in the Capital Accounts) would be
allocated among the Members if there were a taxable disposition of the Asset for
its Fair Market Value in the manner provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(e). These provisions and other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in
a manner consistent with such section of the Treasury Regulations.

     8.2. If any interest in the Company is transferred, the proportionate 
Capital Account and Interest attributable to such interest in the Company shall 
continue to be attributable to such interest in the Company.

     8.3. After giving effect to the special allocations set forth in Sections 
                                                                      --------
8.1, 8.4 and 8.7, if any, Net Income or Net Loss for a Year shall be allocated 
--------     ---
among the Members in accordance with their respective Interests.

     8.4. Notwithstanding anything to the contrary contained in this Article 8:
                                                                     ---------

     8.4.1  If during any Year of the Company there is a net decrease in Company
  minimum gain (as such term is defined by Treasury Regulation Section 
  1.704-2(d) with

                                      10
<PAGE>
 
  respect to partnership minimum gain), then each Member shall be allocated
  Gross Income for such Year (and, if necessary, for subsequent Years) in the
  manner provided in Treasury Regulation Sections 1.704-2(f) and 1.704-2(j)(2).
  This Section 8.4.1 is intended to comply with the Company minimum gain
       -------------
  chargeback requirements of Treasury Regulation Section 1.704-2.
 
     8.4.2  If during any Year of the Company there is a net decrease in Member 
  nonrecourse debt minimum gain (as such term is defined by Treasury Regulation
  Section 1.704-2(i) with respect to partner nonrecourse debt minimum gain) then
  each Member shall be allocated Gross Income for such year (and, if necessary,
  for subsequent Years) in the manner provided in Treasury Regulation Sections
  1.704-2(i) and 1.704-2(j)(2). This Section 8.4.2 is intended to comply with
                                     -------------
  the Member nonrecourse debt minimum gain chargeback provisions of Treasury
  Regulation Section 1.704-2(i).

     8.4.3  Member nonrecourse deductions (as defined in Treasury Regulation 
  Section 1.704-2(i)(2) with respect to partner nonrecourse deductions) shall be
  allocated as prescribed in Treasury Regulation Section 1.704-2(i)(1).

     8.5. Taxable income, gain, loss or deduction of the Company (as well as any
credits and the basis of property to which such credits apply) as determined for
federal income tax purposes shall be allocated in the same manner as the 
corresponding income, gain, loss or deduction is allocated for purposes of 
adjusting Capital Accounts hereunder.

     8.6. Subject to Section 706 of the Code and to any applicable Treasury 
Regulations, Net Income, Net Loss and items of income, gain, loss, deduction or 
credit for federal income tax purposes for a Year that are attributable to any 
interest in the Company that is transferred or assigned during such Year shall 
be allocated between the portion of the Year during which such interest was held
by the transferor and the portion of the Year during which such interest was 
held by the transferee on the basis of the number of days of the year such 
interest was held by each.

     8.7. Any Net Loss otherwise allocable to a Member with, or which would 
produce, a deficit balance in such Member's Adjusted Capital Account Balance 
shall be allocated to the extent of the aggregate of and in proportion to the 
positive Adjusted Capital Account Balances of other Members. In the event that 
at any time any Member receives any adjustments, allocations, or distributions 
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(5) or 
1.704-1(b)(2)(ii)(d)(6) that create or increase a deficit balance in their 
Adjusted Capital Account Balances, then the next allocation of Gross Income that
would otherwise have been allocated to the other Members shall be specially 
allocated to such Member in an amount and a manner sufficient to eliminate the 
deficit balance in such Adjusted Capital Account Balance created by such 
adjustments, allocations, or distributions as quickly as possible. The 
preceding sentence is intended to comply with the qualified income offset 
provision in

                                      11



<PAGE>
 
Treasury Regulations Section 1.704-1(b)(2)(ii)(d). In addition, to the extent 
not otherwise required by the preceding sentences, if any Member would otherwise
have a deficit Adjusted Capital Account Balance as of the last day of a Year or 
other period, items of Gross Income shall be specially allocated to such Member 
so as to eliminate such deficit as quickly as possible. Any special allocations 
pursuant to this Section 8.7 shall be taken into account in computing subsequent
                 -----------
allocations pursuant to this Article 8, so that the allocations of Net Income 
                             ---------
and Gross Income allocated to each Member pursuant to this Article 8 shall be 
                                                           ---------
equal to the allocations of Net Income and Gross Income that would have been 
allocated to each Member pursuant to the provisions of this Article 8 if the 
                                                            ---------
adjustments, allocations, or distributions and the resulting special allocations
pursuant to this Section 8.7 had not occurred.
                 -----------

     8.8. In accordance with Code Section 704(c) and the Treasury Regulations 
thereunder, income, gain, loss, and deduction with respect to any property 
contributed to the capital of the Company shall, solely for income tax purposes,
be allocated among the Members so as to take account of any variation between 
the adjusted basis of such property to the Company for federal income tax 
purposes and its Fair Market Value at the time of contribution. Any elections or
other decisions relating to such allocations shall be made by the Manager in a 
manner that reasonably reflects the purpose and intention of this Agreement. In 
the event of any adjustments to Capital Accounts pursuant to Section 7.5.5, the 
                                                             -------------
principles of Code Section 704(c) shall be applied with respect to such 
adjustments. Allocations pursuant to this Section 8.8 are solely for purposes of
                                          -----------
federal, state, and local taxes and shall not affect, or in any way be taken 
into account in computing, any Member's Capital Account or share of Net Income, 
Net Loss or distributions pursuant to any provision of this Agreement.

  9. Distributions
     -------------

     9.1. All Net Cash Flow, if any, attributable to each calendar month of each
Year (or portion thereof) and distributable other than in connection with the 
liquidation of the Company shall be applied and distributed as follows:

     9.1.1 first, to the Members (or their Affiliated Persons) in full payment
           -----
  of any Company Loans and accrued interest with respect thereto in proportion
  to the outstanding balances of such Company Loans (amounts so paid to be
  applied first to interest accrued and unpaid, and then to outstanding
  principal); and

     9.1.2 the balance, to the Members, in accordance with their respective
           -----------
  Interests provided, however, that so long as (i) a default has occurred and is
  continuing following the expiration of any applicable cure periods under a
  Credit Lease in which PHP Member acts as the Lessee thereunder and (ii) such
  Credit Lease remains an Asset of the Company, such Net Cash Flow shall be
  applied and distributed first to G&L Member until G&L Member has received a
  return of its Capital Contribution with respect to such Asset, second, to PHP
  Member until PHP Member has received a return of its Capital

                                      12
<PAGE>
 
  Contribution with respect to such Asset, and the balance to the Members in 
  accordance with their respective Interests.

     9.2. The Manager shall make all distributions of Net Proceeds under Section
                                                                         -------
9.1 as promptly as practicable after the transaction giving rise to such Net
---
Proceeds. The Manager shall make distributions of all other Net Cash Flow under
Section 9.1 within thirty (30) days after the end of each calendar month during
-----------
any Year (if and to the extent of available cash and not otherwise) on the basis
of estimated Net Cash Flow for such calendar month (or the applicable portion
thereof), after taking into account any remaining discrepancy between actual and
estimated Net Cash Flow for any preceding month. Thirty (30) days following
final determination of actual Net Cash Flow for such Year, there shall be a
final distribution to the Members to the extent that actual Net Cash Flow for
such Year exceeds interim distributions of estimated Net Cash Flow, or the
Members shall recontribute their respective shares of the excess of any interim
distributions of estimated Net Cash Flow over the actual Net Cash Flow for such
Year. Except as may be otherwise required by law, no distribution of property in
kind by the Company shall be permitted without the prior written consent of the
Manager and each of the Members.

     9.3. Amounts owed on secured debt held by PHP Member shall be paid in
accordance with the terms of the debt instrument prior to any payment described
in Section 9.1 or 9.2 at all times that PHP Member is not in default as tenant
   -----------    ---
under a Credit Lease. At any time that PHP Member is in default as tenant under
a Credit Lease, amounts owed on secured debt of the Company held by PHP Member
shall be paid only after payment in full to G&L Member and Manager (and their
Affiliates, if applicable) of their Company Loans (if any) and an amount equal
to G&L Member's and Manager's Capital Contribution to the Company.

   10.  Books and Records
        -----------------

     10.1 The Manager shall keep or cause to be kept full and true books of 
accounts, in which shall be entered each financial transaction of the Company 
and a record of ownership of Interests in the Company.

     10.2 All of said books of account, as well as records and reports of the 
Company, together with an executed copy of the Certificate of Formation and 
Limited Liability Company Agreement of the Company and any amendments thereto, 
and all such other information regarding the Company as any Member may 
reasonably request from time to time, shall at all times be maintained at the 
principal office of the Company, or at such other office of the Company as may 
be designated for such purpose by the Manager, and shall be open to the 
inspection, examination and audit of the Members or their representatives during
reasonable business hours, who shall be entitled to make copies or extracts 
thereof.

                                      13







<PAGE>
 
          10.3.  The Manager shall cause to be prepared and distributed to the 
Members and the Manager within one hundred and twenty (120) days after the end
of each Year an audited financial statement of the Company for such Year,
prepared in accordance with generally accepted accounting principles by a
nationally recognized accounting firm. The Manager shall also cause to be
prepared and distributed to each Member and the Manager within twenty-five (25)
days after the end of each month an unaudited financial statement for the
Company for such month, prepared in accordance with generally accepted
accounting principles.

          10.4.  The Manager shall also furnish to each Member and the Manager 
within one hundred and twenty (120) days after the end of each Year any
statement or forms required to be furnished pursuant to applicable provisions of
the Code (including a copy of the Schedule K-1, or corresponding schedules
relating to such Member required to be filed with the Company's U.S. Return of
Company Income and a copy of the Company's U.S. Return of Company Income).

          10.5.  Tax Matters Member.
                 ------------------

          10.5.1   The Manager shall be the "tax matters partner" as that term 
     is defined in Section 6231 of the Code.

          10.5.2   Each Member shall give prompt notice to the tax matters
     partner upon receipt of advice that the Internal Revenue Service (the
     "Service") intends to examine any Company income tax returns. The tax
     matters partner shall promptly notify the Members of the commencement of
     any administrative or judicial or similar proceedings involving the tax
     treatment of items of Company income, loss, deductions and credits, and
     shall further keep the Members fully informed of all material developments
     involved in such proceedings. Each Member shall have the right to
     participate in any such actions and proceedings to the extent provided for
     under the Code and regulations promulgated thereunder.

          10.5.3   Nothing in this Section shall limit the ability of the
     Members to take any action in their individual capacity relating to tax
     audit matters that is left to the determination of an individual Member
     under Sections 6222 and 6223 of the Code.

          10.5.4   The tax matters partner shall cause to be prepared for each
     Year the federal, state and local income tax returns and information
     returns, if any, which the Company is required to file, copies of which
     returns shall be available for inspection and examination by the Members at
     any time and such Members shall be entitled to make copies or extracts
     thereof. Where the Members are required to file state and local income tax
     returns by reason of their interest in the Company, the tax matters partner
     shall cause them to be furnished with copies of the relevant returns filed
     by the Company. The tax

                                      14
<PAGE>
 
     matters partner shall act in the interests of all of the Members in the 
     preparation of any such statements, forms or returns.

          10.5.5   The tax matters partner shall not initiate any action or
     proceeding in any court, extend any statute of limitations, or take any
     other action contemplated by Sections 6222 through 6232 of the Code that
     would legally bind any other member of the Company without the approval of
     each Member. If the tax matters partner proposes that any material
     adjustment to any tax return be approved, the tax matters partner shall not
     concede such adjustment without the prior approval of each Member.

          10.6.  The actual out-of-pocket costs of keeping the Company's books 
and preparing the reports, statements and returns referred to in this Article 10
                                                                      ----------
shall be an expense of the Company.

     11.  Bank Accounts; Certain Payments.
          -------------------------------

          11.1.  All funds of the Company shall be deposited in the Company name
in an appropriate bank account or accounts to be maintained by the Company as 
the Manager may designate.  Withdrawals from any such bank account or accounts 
shall be made only in the regular course of the Company's business.  Persons 
employed by the Manager having authority with regard to such account or accounts
shall be subject to the approval of a Majority in Interest of the Members;
provided that, at all times (i) authorized signatories shall include two
employees of the Manager and (ii) withdrawals of amounts in excess of any line
item of an approved Company Budget plus 5% shall require signatures of two
authorized signatories and the approval of each of the Members.

          11.2.  The Manager may pay from such bank account or accounts, when 
due or against receipt of invoices therefor, the following amounts, without 
duplication, to the extent such amounts have been approved in any line item of 
the Company Budget plus 5% or have been otherwise approved by the Members: (i) 
Operating Expenses; (ii) distributions made to enable Members to pay income 
taxes in respect of their Interest; (iii) any Origination and Due Diligence 
Expenses; (iv) any amounts due on or with respect to any indebtedness of the 
Company; (v) interest and principal payments on account of Company indebtedness 
(other than principal payments on account of Company Loans), together with any 
fees or other payments then due thereunder; (vi) all reasonable and necessary 
cash expenditures (including the establishment and funding of reserves, but 
excluding the amounts described in the preceding clauses (i), (ii), (iii), (iv),
(v) and (vi) and expenditures from established reserves) contemplated by the 
Manager; and (vii) amounts used to fund the origination or proposed origination 
of Credit Leases and the purchase or proposed purchase of Property.  The Manager
may also pay from such bank account or accounts any payments or distributions 
required by Section 9.
            ---------

     12.  Rights and Obligations of Members.
          ---------------------------------

                                      15
<PAGE>
 
          12.1.  Liability of Members.  No Member shall be personally liable for
                 --------------------
any of the debts, liabilities, obligations or contracts of the Company or of any
other Member, nor shall a Member be required to lend any funds to the Company.  
Each Member shall only be liable to make payment of such Member's Capital 
Contributions as and when due hereunder.  If and to the extent a Member's 
Capital Contributions shall be fully paid, the Member shall not, except as 
required by the express provisions of Section 7.2 or as required by the express 
                                      -----------
provisions of the Act regarding repayment of sums wrongfully distributed to any 
such Member, be required to make any further contributions to the Company.  
Except as otherwise provided in the Act, by law or expressly in this Agreement, 
no Member shall have any fiduciary or other duty to another Member with respect
to the business and affairs of the Company, and no Member shall be liable to the
Company or any other Member for acting in good faith reliance upon the 
provisions of this Agreement.  No Member shall have any responsibility to 
restore any negative balance in its Capital Account or to contribute to or in 
respect of the liabilities or obligations of the Company or return distributions
made by the Company except as required by the Act or other applicable law;
provided, however, that Members shall be responsible for their failure to make
required Capital Contributions hereunder. The failure of the Company to observe
any formalities or requirements relating to the exercise of its powers or the
management of its business or affairs under this Agreement or the Act shall not
be grounds for making its Members or the Manager responsible for the liabilities
of the Company.

          12.2.  No Participation by the Members.  The Members other than the 
                 -------------------------------
Manager shall not participate in the management or control of the business of, 
or transact any business for, the Company.  The Members shall not have power to 
sign for or bind the Company.  The Members shall, however, have the approval 
rights expressly set forth elsewhere in this Agreement, as well as the approval 
rights set forth in Sections 12.3, 12.4 and 13.2.1 below.
                    -------------------     ------

          12.3.  Approval by the Members.  The following matters shall be 
                 -----------------------
subject to the prior written approval of each of the Members.

          (a)    any amendment of the Limited Liability Company Agreement or the
                 Certificate of Formation of the Company and any merger or
                 consolidation of the Company with any other entity;

          (b)    any secured or unsecured borrowings by the Company (and any 
                 refinancing thereof); 

          (c)    except as otherwise specifically provided in Section 20, a sale
                                                              ----------
                 of all or substantially all of the Assets; 

          (d)    any dispositions or financings by the Company relating to more
                 than one Asset, or securitized transactions involving the
                 Assets;

                                      16
<PAGE>
 


          (e)  the making of any loan by the Company to another Person;

          (f)  any material decision by the Company which is not made in the
               ordinary course of its business including, without limitation,
               commencement or response to any litigation, any foreclosure
               action, workout or restructuring of an Asset;

          (g)  any transaction between the Company and any Member, or any
               Affiliated Person as to any Member (provided that all such
               transactions shall be conducted on an arm's length basis), other
               than transactions expressly contemplated by this Agreement;

          (h)  any reimbursement of the Manager or a Member by the Company for
               Operating Expenses other than as contemplated by this Agreement;

          (i)  any other action requiring the approval of the Members under the 
               Act which cannot be varied by this Agreement;

          (j)  the termination of the Company pursuant to Section 15.3;
                                                          ------------

          (k)  any origination of any Credit Lease or acquisition (by purchase,
               lease or otherwise) of any Property by the Company which shall be
               accomplished in accordance with Section 13.2.1);
                                               --------------

          (l)  any issuance of membership interests or rights, options,
               warrants, convertible debt or equity instruments that provide any
               right to subscribe for, purchase or otherwise acquire membership
               interests;

          (m)  any dividend or distribution of cash or other property in respect
               of any membership interests, except as contemplated by Section
               9.1 and Section 16.2;

          (n)  any redemption, purchase or other acquisition of membership 
               interests;

          (o)  any entry into a line of business other than the acquisition of 
               Property and the origination of Credit Leases;

          (p)  any assignment by the Company of a Credit Lease or other material
               contract to which the Company is a party; 

                                      17
<PAGE>
 
          (q)       any incurrence of indebtedness for borrowed money or any
                    guarantee of third party obligations in excess of $25,000
                    and any modification of the terms of any such indebtedness
                    or guarantee not in the ordinary course of business; and

          (r)       the Company Budget, including updates thereto provided to
                    the Members in accordance with Section 13.2.2.
                                                   --------------

          12.4.     Manner of Consent. Except as otherwise specifically provided
                    -----------------
in this Agreement, the Manager shall solicit the approval of the Members as to
any matter requiring Member approval hereunder as follows: the Manager shall
give to each of the Members a notice requesting any such approval, accompanied
by a description in reasonable detail of the matters as to which such approval
is requested. In such case, any Member which does not communicate by notice to
the Manager its approval of any matters described in the notice requesting such
approval within seven (7) Business Days of the date of such notice shall be
deemed to have disapproved such matters.

          12.5.     PHP Member Not to Own Equity Securities of Affiliates of G&L
                    ------------------------------------------------------------
Member. PHP member represents that, at the date hereof, it does not own,
------
directly or indirectly, any equity securities of G&L Realty, Inc., and covenants
and agrees that, so long as this Agreement is in effect, it will not acquire,
directly or indirectly, any equity securities of G&L Realty, Inc.

          12.6.     Representations of Members.
                    --------------------------

          12.6.1    Each Member, by execution hereof, represents and warrants it
     is neither: (i) an employee benefit plan within the meaning of Section 3(3)
     of ERISA (whether or not it is subject to the provisions of Title I of
     ERISA); (ii) a plan described in Section 4975(e)(1) of the Code; (iii) an
     entity the assets of which include plan assets pursuant to Department of
     Labor Regulations at 29 C.F.R. (S) 2510.3-101 by reason of the investment
     (direct or indirect) in such entity by an entity described in the preceding
     clauses (i) or (ii) of this sentence; nor (iv) a "benefit plan investor"
     within the meaning of 29 C.F.R. (S) 2510.3-101.

          12.6.2    Non-Foreign Status. Each Member, by execution hereof,
                    ------------------
     represents and warrants that it is a United States person within the
     meaning of Section 7701(a)(30) of the Code.

          12.6.3    Securities Act; Investment Company Act.  Each Member, by 
                    --------------------------------------
     execution hereof, represents and warrants that:

                                      18
<PAGE>
 
          (a)     such Member's Interest in the Company has not been and will
                  not be registered until the Securities Act, in reliance upon
                  the exemption provided in Section 4(2) of the Securities Act,
                  or registered or qualified under the securities law of any
                  jurisdiction;

          (b)     such Member (i) has such knowledge, sophistication and
                  experience in financial and business matters as to be capable
                  of evaluating the merits and risks of an investment in its
                  Interest in the Company, (ii) is able to bear the economic
                  risk of an investment in its Interest in the Company, and
                  (iii) constitutes an "accredited investor" as defined in
                  Regulation D under the Securities Act;

          (c)     such Member is acquiring for its own account, or for accounts
                  as to which it exercises sole investment discretion, for
                  investment purposes only and not with a view to distribution,
                  subject, nevertheless, to the understanding that the
                  disposition of such Member's property shall at all times be
                  and remain within such Member's control;

          (d)     upon acquisition of its Interest in the Company, (i) the
                  number of "beneficial owners" (as defined in Section 3 of the
                  Investment Company Act) owning such Member's Interest is one;
                  and (ii) the Company, as a result thereof, will not be
                  required to register as an investment company under the
                  Investment Company Act;

          (e)     it is not a bank, within the meaning of Section 881(c)(3)(A)
                  of the Code or if it is such a Bank that it is incorporated
                  under the laws of the United States or any state thereof
                  (including the District of Columbia);

          12.6.4  Valid Organization; Authority; Execution; Enforceability:  
                  --------------------------------------------------------
     Each Member, by execution hereof, represents and warrants that:

          (a)     it is duly organized, validly existing and in good standing
                  under the laws of the jurisdiction of its organization and is
                  duly qualified and in good standing in the jurisdiction of its
                  principal place of business (if not organized therein);

          (b)     such Member has full corporate or other applicable power and
                  authority to execute and agree to this Agreement and to
                  perform its obligations hereunder and all necessary actions by
                  the board of directors, shareholders, members, partners or
                  other Persons necessary for the due authorization, execution,
                  delivery and performance of this Agreement by that Member have
                  been duly taken;

                                      19
<PAGE>
 
          (c)     such Member has duly executed and delivered this Agreement; 

          (d)     such Member's authorization, execution, delivery and
                  performance of this Agreement do not conflict in any material
                  respect with any other agreement or arrangement to which that
                  Member is a party or by which it is bound or with any law or
                  regulation to which that Member is subject; and

          (e)     this Agreement constitutes a valid, binding and enforceable
                  agreement of that Member, subject to general equitable
                  principles and except as the enforceability thereof may be
                  limited by applicable bankruptcy, insolvency, reorganization,
                  moratorium or other similar laws of general application
                  relating to creditors' rights.

          12.7.   Grant of Right of First Offer. Each of G&L Member and PHP
                  -----------------------------
Member hereby grant, and agree to cause their Affiliates to grant, to the
Company an exclusive right of first offer to purchase real property subject or
to be subjected to a Credit Lease from such Member or its Affiliate or from a
third party sponsored by such Member or its Affiliate (in such capacity, a
"Sponsor"). Such purchase or assumption terms shall be based on market terms and
pricing which would be offered at an arm's-length transaction for property and
leases of such nature, term and rent payable by lessees of similar credit
standing, which terms and pricing shall be determined by the Manager and shall
be set forth in a written offer from the Company, delivered to the Sponsor in a
timely and efficient manner. Such Member, if it is the Sponsor, shall accept, or
shall otherwise cause its Affiliate to accept, any such offer meeting the terms
of this Section 12.7.
        ------------

     13.  Rights and Obligations of the Manager.
          -------------------------------------

          13.1.   General Responsibilities.
                  ------------------------

          13.1.1  Except as otherwise specifically provided in this Agreement
     requiring Member consent or approval, permitting Member action or
     direction, as described in this Agreement, the Manager shall have full
     responsibility and exclusive and complete discretion in the management and
     control of the business and afffairs of the Company for the purposes herein
     stated, shall make all decisions affecting the Company's affairs and
     business, and shall have full, complete and exclusive discretion to take
     any and all action that the Company is authorized to take and to make all
     decisions with respect thereto. Until such time as the Company shall employ
     its own personnel, the Manager shall provide such personnel as may be
     necessary to accomplish the origination, purchase, ownership and
     disposition of the Assets and the operation and management of the Company.
     With the consent of each of the Members, the Manager may delegate the

                                      20
<PAGE>
 
     performance of its functions to any of their respective Affiliated Persons,
     but shall remain primarily liable therefor to the Company and the Members.
     The Manager will be responsible for the compensation and other overhead
     costs incurred in connection with its employment of such personnel. In no
     event shall any personnel be employed by the Manager or the Company if such
     personnel could be considered employees of either Member or their
     respective Affiliates.

          13.1.2  The Manager shall be required to devote only such time, effort
     and attention to the business of the Company as is reasonably necessary to
     the accomplishment of the Company's purposes.

          13.1.3  Prior to the Company conducting business in any jurisdiction
     other than the State of Delaware, the Manager shall cause the Company to
     comply, to the extent procedures are available, with all requirements
     necessary to qualify the Company as a foreign limited liability company in
     such jurisdiction. Each Member shall execute, acknowledge, swear to and
     deliver all certificates and other instruments conforming to this Agreement
     that are necessary or appropriate to qualify, or, as appropriate, to
     continue or terminate such qualification of, the Company as a foreign
     limited liability company in all such jurisdictions in which the Company
     may conduct business.

          13.2.   Management. The Manager shall supervise the operations of the
                  ----------
Company and, in such capacity, shall take such steps as may be reasonably 
necessary to ensure that the operations of the Company are conducted in 
compliance with applicable law and with the terms of this Agreement.

          13.2.1  Originations and Purchases. Subject to Section 12.7, any
                  --------------------------             ------------
     Member may submit to the Manager proposals for originations of Credit
     Leases or acquisition (by purchase, lease or otherwise) of any Property.
     Each proposal shall require the approval by each Member prior to any
     origination of any Credit Lease or acquisition (by purchase, lease or
     otherwise) of any Property on behalf of the Company. A proposal for such
     origination or acquisition will be deemed (i) rejected if any Member
     rejects or fails to approve such proposal within 10 Business Days after
     receipt of the proposal, and (ii) approved if each Member approves such
     recommendation within 10 Business Days after such receipt. Once a proposal
     for origination is approved, the Manager will be authorized to consummate
     such origination or purchase on behalf of the Company.

          13.2.2  Company Budget. No later than March 31, 1997, the Manager
                  --------------
     shall prepare and shall submit to the Members a budget (the "Company
     Budget") representing the Company's overall operating budget which shall
     include the annual operating budget for the Company, including projections
     of income and expense by major line item, any expected capital calls and
     borrowing needs with respect thereto, startup and ongoing out of pocket
     third party expenses (including without limitation, legal, accounting and

                                      21
<PAGE>
 
     auditing costs) and other operating costs and such operating and overhead
     costs expected to be incurred by the Company in connection therewith. The
     Company Budget will be updated quarterly; provided, however, that any
     material changes to the operating budget prior to the quarterly update will
     require the approval of the Members in the same manner as the original
     Company Budget.

          13.3.   Other Business; Reimbursement.
                  -----------------------------

          13.3.1  Subject to Section 12.7, the Members and any Affiliated Person
                             ------------
     of any Member may engage in or possess an interest in other business
     ventures of every kind and description, independently or with others.
     Neither the Company nor the other Members shall have any rights in or to
     such independent ventures or the income or profits therefrom by virtue of
     this Agreement.

          13.3.2  The Company shall from time to time reimburse the Manager for
     the Manager's reasonable out-of-pocket expenditures incurred in connection
     with the performance of its duties hereunder; provided, however, that any
     such reimbursement of expenses shall be subject to the approval of the
     Members as provided in Section 12.3.
                            ------------

          13.4.   Authority of the Manager.
                  ------------------------

          13.4.1  Election. The Members, by execution of this Agreement, elect
                  --------
     the Manager as the manager of the Company. Except as otherwise specifically
     provided in this Agreement, the Manager shall have full and complete power
     to do any and all things necessary or incidental to carrying out the
     objects and purposes of the Company set forth in Section 6 hereof and to
                                                      ---------
     perform all acts and enter into and perform all contracts and other
     undertakings which it may deem necessary or advisable or incidental
     thereto, including, without limitation, the power to manage and conduct the
     Company business.

          13.4.2  Determination by the Manager. Except as otherwise specifically
                  ----------------------------
     provided in this Agreement, any action, direction or consent to be taken by
     the Manager hereunder shall be evidenced by a writing signed by the
     Manager. The Manager agrees to execute such documents and take such actions
     as so directed by each of the Members, provided any such direction is not
     in violation of an express provision of this Agreement and that the
     Manager may lawfully do so. In the event the Manager refuses to so execute
     such documents or take such action, may be removed by the Members as set
     forth in Section 13.8. The Members hereby agree that any action undertaken
              ------------
     by the Manager at the direction of each of the Members shall be deemed
     consistent with the fiduciary obligations of the Manager with respect
     thereto and shall not constitute a breach of the Manager's fiduciary duty
     to the Members, provided, however, that the foregoing does not relieve the
     Manager of its own negligence or willful misconduct in connection with any
     such action.

                                      22
<PAGE>
 
     13.4.3 Execution of Documents. Subject to the express provisions of this 
            ----------------------
  Agreement, the Manager shall have the authority to execute on behalf of the
  Company such agreements, guarantees, contracts, instruments and other
  documents as it shall from time to time approve, such approval to be
  conclusively evidenced by its execution and delivery of any of the foregoing,
  including, without limitation: (a) all such solicitations, offers, agreements,
  instruments, certificates or other documents as shall be necessary or
  appropriate in connection with the origination of Credit Leases or purchase of
  Property by the Company; (b) checks, drafts, notes and other negotiable
  instruments; (c) assignments and transfer documents, and (d) loan agreements,
  mortgages, security agreements, guarantees, lease assignments, pledge
  agreements and financing statements. The signatures of the Manager on all such
  instruments, agreements, guarantees, contracts, conveyances or documents, and
  upon any checks, drafts, notes and other negotiable instruments, shall be
  sufficient to bind the Company in respect thereof and conclusively evidence
  the authority of the Manager with respect thereto, and no third person need
  look to the application of funds or authority to act or require joinder or
  consent of any other party.

     13.4.4 Reliance on Certificate. Any Person dealing with the Company or the 
            -----------------------
  Manager may rely on a certificate signed by the Manager:

     (a)  as to who is the Manager or a Member of the Company;

     (b)  as to the existence or nonexistence of any fact or facts which
          constitute conditions precedent to acts by the Manager or are in any
          other manner germane to the affairs of the Company;

     (c)  as to who is authorized to execute and deliver any instrument or 
          document on behalf of the Company;

     (d)  as to the authenticity of any copy of this Agreement and amendments 
          hereto; or

     (e)  as to any act or failure to act by the Company or as to any other 
          matter whatsoever involving the Company or any Member.

     13.5. Dealings with Members and the Manager. The Company may enter into 
           -------------------------------------
agreements with the Manager or any Member or Affiliated Person with respect 
thereto for the acquisition of property or rendition of services; provided, 
however, that the acquisition of such property from, or the rendition of such 
services by, the Manager or such Member or Affiliated Person has previously been
approved by each of the Members (and is on an arm's length basis) in accordance 
with Section 12.3(g) or is expressly set forth in this Agreement. The Manager or
     ---------------

                                      23
<PAGE>
 
each Member shall in each case disclose in advance the existence of any such 
affiliation to the other Members.

     13.6. Liability of the Manager. Except to the extent otherwise required by
           ------------------------
applicable law or as set forth in written agreements among the Manager or its
Affiliated Persons which are binding on the party against whom enforcement of
any such agreement is sought, the Manager and its Affiliated Persons shall have
no liability to the Company or to any Member or to any other Manager for any
loss suffered by the Company which arises out of any action or inaction of the
Manager or its Affiliated Persons, if the Manager or its Affiliated Persons
determined in good faith that such course of conduct was in the best interests
of the Company or the Members consistent with the fiduciary obligations of the
Manager with respect thereto, and such course of conduct did not constitute
negligence or willful misconduct of such Person or a material breach of this
Agreement.

     13.7.  Indemnification.
            ---------------

     (a)    To the fullest extent permitted by applicable law, each of the
            Manager, the Members and their officers, employees, directors,
            shareholders, members, partners, agents, legal representatives and
            permitted assigns ("indemnitees") shall be entitled to
            indemnification from the Company for any loss, damage or claim by
            reason of any act or omission performed or omitted by them on behalf
            of the Company and in a manner reasonably believed to be within the
            scope of the authority conferred on any of them by this Agreement,
            except that no indemnitee shall be entitled to be indemnified in
            respect of any loss, damage or claim incurred by it by reason of its
            negligence, willful misconduct or breach of its fiduciary duty, if
            any, with respect to such acts or omissions; provided, however, that
            any indemnity under this Section 13.7.2 shall be provided out of and
                                     --------------
            to the extent of Company assets only, and no Member shall have
            personal liability on account thereof. The fulfillment by the
            Company of indemnification obligations will be considered expenses
            of the Company.

     (b)    To the fullest extent permitted by law, each Member shall indemnify
            the Company and the other Members and hold them harmless from and
            against any and all losses, costs, liabilities, damages and expenses
            (including costs of suit and reasonable attorneys' fees) they may
            incur on account of any breach of any provision of this Agreement by
            such Member.

                                      24
<PAGE>
 
     13.8.  Removal of the Manager.
            ----------------------

     13.8.1 Right to Remove. By mutual agreement of each of the Members, the 
            ---------------
  Members shall have the right:

     (a)  to appoint, and (if desired) cause the admission to the Company of,
          one or more new Managers, and to determine such new Manager's or
          Managers' economic interest in the Company, if any; provided, however,
          that such new Manager's or Managers' economic interest, if any, shall
          not reduce the interests of the Members in the Company other than in a
          manner proportionate to their respective Interests; and

     (b)  after admission of one or more new Managers pursuant to clause (a), to
                                                                  ----------
          cause the removal of one or more of the Managers.

  Each of the Members shall exercise the removal right contained in this Section
                                                                         -------
  13.8.1 in good faith based upon such Manager's gross negligence or willful
  ------
  misconduct of such manager. In no event shall the Members exercise the removal
  right set forth in this Section 13.8.1 solely to cause a reduction in such
                          --------------
  manager's economic interest in the Company or amounts distributable under
  Section 13.7 hereof. The Members shall exercise such rights by giving notice
  ------------
  thereof (a "Termination Notice") to the subject Manager. Any removal of a
  Manager pursuant to this Section 13.8.1 shall be effective as of the date (the
                           --------------
  "Removal Date") which is thirty (30) days after the date of the Termination
  Notice or, if later, the date on which all third-party consents required for
  such removal are obtained and the new Manager, appointed by the Members and
  any Manager which is not then the subject of removal, has accepted such
  appointment. The Manager agrees to execute and deliver such further
  instruments and do such further acts and things as may be required to carry
  out the intent of this Section 13.8.1, including without limitation
                         --------------
  effectuating the appointment of any new Manager.

     13.8.2 No Right to Withdraw, Assign or Delegate. No Manager shall have the 
            ----------------------------------------
  right to withdraw as Manager hereunder, assign its rights hereunder nor
  delegate its duties hereunder without the prior approval of each of the
  Members and unless and until a new Manager has accepted appointment as a
  Manager hereunder.

     13.8.3 Consequences of Removal or Withdrawal of a Manager. After the 
            --------------------------------------------------
  withdrawal of any Manager or after the removal of any Manager pursuant to this
  Section 13.8, the new Manager shall have all of the authority and power of the
  ------------
  Manager hereunder and may take any action, direction or consent which is
  required to be or may be taken by the Manager hereunder.

                                      25
<PAGE>
 
     13.9 Representations of the Manager.
          ------------------------------

     (a) The Manager, by execution hereof, represents and warrants that it is 
neither: (i) an employee benefit plan within the meaning of Section 3(3) of 
ERISA (whether or not it is subject to the provisions of Title I of ERISA); (ii)
a plan described in Section 4975(c)(1) of the Code; (iii) an entity the assets 
of which include plan assets pursuant to Department of Labor Regulations at 29 
C.F.R. (S) 2510.3-101 by reason of the investment (direct or indirect) in such 
entity by an entity described in the preceding clauses (i) or (ii) of this 
sentence; nor (iv) a "benefit plan investor" within the meaning of 29 C.F.R. 
Section 2510.3-101.

     (b) The Manager represents that it is not an Affiliate of any Member other 
than G&L Member. 

14.  Transfer of Interests.
     ---------------------

     14.1 Restrictions on Transfer.
          ------------------------

     14.1.1 Members. No Member shall suffer or permit any transfer of or 
            -------
encumbrance upon such Member's Interest in the Company, without, in each 
instance, obtaining the prior approval of the non-transferring Member, which
approval the non-transferring Member may withhold in its sole discretion.
Notwithstanding the foregoing provisions of this Section 14.1.1, the following
                                                 --------------
transfers shall be permitted: any Member may transfer its respective interests
to a wholly owned subsidiary of such transferring Member without the approval of
the non-transferring Member if the transferring Member at all times retain not
less than one hundred percent (100%) share of the direct and indirect beneficial
interest and direct voting control thereof. In any event, the Members shall be
provided with prior written notice of any proposed transfer of interests
pursuant to this Section 14.1.1, whether or not the Members' approval is
                 --------------
required with respect to such transfer.

     14.1.2 Other Restrictions on Transfer. No Member shall suffer or permit any
            ------------------------------
transfer of or encumbrance upon such Member's Interest in the Company which 
would adversely affect the status of the Company as a partnership for federal 
tax purposes or which would require the Company to register as an "investment 
company" under the Investment Company Act. No Interest may be sold or 
transferred if, at the time of such sale or transfer, such sale or transfer 
would result in the aggregate number of "beneficial owners" (as defined in 
Section 3 of the Investment Company Act) of Interests to exceed 100. No Interest
may be sold or transferred unless the transferee represents to the Company, the 
Members and the Manager, the matters contained in Section 12.7.
                                                  ------------

                                      26
<PAGE>
 
     14.1.3 Right of First Offer. Subject to the foregoing, if a Member receives
            --------------------
a bona fide offer, in writing, from an unaffiliated third party to purchase its
Interest and desires to sell its Interest on the terms set forth in the offer,
then prior to transferring its interest, the transferring Member shall notify
each other Member in writing of its proposed transfer and shall make an offer
(the "Offer") to sell its Interest to each other Member on the same terms as the
third-party offer. Each Member which is not the transferring party, shall have a
right to accept the Offer, which acceptance must be made within five (5)
Business Days after delivery of such notice. If any non-transferring Member
timely notifies the transferring Member in writing of its acceptance of the
Offer, then such transferring Member shall sell such Interest to such Member on
the closing date specified by the purchasing Member which closing date shall
occur no later than thirty (30) Business Days after delivery of such notice of
transfer. If more than one non-transferring Member timely notifies the
transferring Member in writing of its acceptance of the Offer, such transferring
Member shall conduct a private auction for such Interest having as a floor the
terms of the Offer and using a sealed bid procedure, which auction shall occur
no later than ten (10) Business Days after delivery of such notice of transfer.
If no non-transferring Member elects to timely accept the Offer, the
transferring Member may sell its Interest within thirty (30) days after delivery
of such notice to any Person on substantially the same terms as those contained
in the Offer, such sale to be evidenced by a binding purchase commitment of the
Person purchasing. If no such binding commitment is obtained within such thirty
(30) day period, or if the transferring Member desires to sell on materially
different terms than those previously offered the other Member (e.g., price is
lower than 98% of amount indicated in transferring member's notice, any change
in ratio of cash to total purchase price or in terms of any securities
contributed as a portion of the purchase price), the transferring Member must,
in each such instance, again extend the rights described above to the other
Members.

     14.1.4 In the event of a permitted transfer of all or any portion of a 
Member's Interest in the Company pursuant to this Section 14.1:
                                                  ------------

     (a) the Manager shall approve any amendment to this Agreement reasonably
         requested by the transferring Member to enable such Member to transfer
         a portion of its Interest permitted to be transferred pursuant to this
         Section 14.1, provided that such amendment does not affect Section
         ------------                                               -------
         14.1.1, 14.1.2 or 14.1.3, does not materially affect the right of the
         ------------------------
         Manager or Members to manage the Company, does not impose any material
         burden or obligation on the Manager or non-transferring Member and does
         not affect the economic return of the Manager or non-transferring
         Member under this Agreement; and

                                      27

<PAGE>
 
     (b) the tax matters partner of the Company shall, at the request of the
         transferring Member cause the Company to elect, pursuant to Section 754
         of the Code, to adjust the basis of the Assets.

     14.2. Obligations and Rights of Transferees and Assignees. Any Person who 
           ---------------------------------------------------
acquires in any manner whatsoever the Interest (or any part thereof) of any 
Member, irrespective of whether such Person had accepted and assumed in writing 
the terms and provisions of this Agreement, shall be deemed, by acceptance of
the benefit of the acquisition thereof, to have agreed to be subject to and
bound by all of the obligations of this Agreement and to have made the
representations set forth herein, with the same force and effect as any
predecessor in interest in the Company, shall have only such rights as are
provided in this Agreement, and, without limiting the generality of the
foregoing, shall not have the value of its Interest ascertained or receive the
value of such Interest, or, in lieu thereof, profits attributable to any right
in the Company, except as set forth in this Agreement.

     14.3. Non-Recognition of Certain Transfers. Notwithstanding any other
           ------------------------------------
provision of this Agreement, any transfer, sale, alienation, assignment,
encumbrance or other disposition in contravention of any of the provisions of
this Agreement shall be void and ineffective, and shall not bind, or be
recognized by, the Company.

     14.4. Required Amendments. If and to the extent any transfer of an Interest
           -------------------
in the Company is permitted hereunder, this Agreement and Exhibit A hereto shall
                                                          ---------
be amended to reflect the admission to the Company of the transferee Member and
the elimination of the transferor Member.

     14.5. Withdrawal. Except upon transfer of a Member's entire Interest in the
           ----------
Company and the admission of the transferee as a substituted Member in 
compliance with the terms of this Agreement, no Member shall have the right to 
withdraw from the Company except with the approval of all of the Members.

     14.6. Compliance with Securities Laws. Any provision of this Agreement to 
           -------------------------------
the contrary notwithstanding, no transfer, sale, assignment or other disposition
of any Interest in the Company may be made except in compliance with the then 
applicable federal and state securities laws.

     14.7. Initial Members. Initial Members become Members upon the execution
           ---------------
and delivery of this Agreement by all parties hereto.


15.  Termination of the Company.
     --------------------------

                                      28
<PAGE>
 
          15.1. In the event of the dissolution, bankruptcy or other withdrawal
of a Member (notwithstanding that such withdrawal is in contravention of this
Agreement), the Company shall be dissolved on the ninetieth (90th) day following
the occurrence of such event.

          15.2. Notwithstanding Section 15.1, the business of the Company shall
                                ------------
be continued after the dissolution, bankruptcy or other withdrawal of any of the
Members if within ninety (90) days after such event (i) there are at least two
remaining Members and (ii) a Majority in Interest of the Members elect to
continue the business of the Company. In the event of the failure of the Members
to continue the business of the Company as provided in Section 15.2, the
                                                       ------------
Company shall be terminated forthwith.

          15.3. In addition, the Company shall terminate on December 31, 2046,
and the Company may be terminated at any time with the prior approval of each of
the Members.

          15.4. Upon the voluntary termination of the Company, the sale of all
or substantially all of the Assets, or any other termination of the Company in
accordance with this Agreement, the Company shall wind up its affairs and shall
then be liquidated as provided in Article 16. In such event, a Certificate of
                                  ----------
Cancellation, as required by law, shall be filed.

          15.5. Each Member hereby waives any right to maintain any action for
partition with respect to any property owned by the Company or, to the extent
permitted by law, any action for dissolution other than pursuant to rights set
forth in this Agreement.

     16.  Gain, Loss and Distributions on Liquidation.
          -------------------------------------------

     Upon any termination of the Company, each of the following shall be 
accomplished:

          16.1. The Company's interest in the Assets shall be liquidated
promptly in an orderly and businesslike manner, so as not to involve undue
sacrifice and in accordance with Section 17.1.
                                 ------------

          16.2. Net Proceeds, Net Cash Flow and all other Assets shall be
applied and distributed as follows and in the following order of priority:

          16.2.1   First, to the payment of the debts and liabilities of the
     Company, subject to the limitations of Section 9.3.
                                            -----------

          16.2.2   Second, to the setting up of any reserves which the Manager
     determines are reasonably necessary for any contingent liabilities or
     obligations of the Company or of the Members arising out of or in
     connection with the Company. Such reserves may, in the discretion of the
     Manager be paid over to an escrow agent selected by the Manager to be held
     by such escrow agent for the purpose of disbursing such reserves in payment
     of


                                      29




<PAGE>
 
     any of the aforementioned contingencies, and upon the expiration of such
     period as the Manager may deem advisable, to distribute the balance thereof
     remaining as provided in Section 16.2.3;
                              --------------

          16.2.3  Third, subject to Section 9, to the Members in proportion to
     the respective positive balances of their Capital Accounts after taking
     into account all adjustments to such balances for the year of the
     liquidation.

          16.3. No Member shall have an obligation to restore any deficit
balance in its Capital Account following the liquidation of its interest in the
Company, except as may be required under the Act.

          16.4. The Manager shall be responsible for accomplishing the
requirements of this Article 16.

     17.  Sale of Assets.
          --------------

          17.1. In the event that (a) Assets are to be liquidated pursuant to
Section 16.1, or (b) Assets have become subject to default following applicable
------------
cure periods, the Manager shall solicit offers from G&L Member and PHP Member to
acquire such Assets prior to any public or third party solicitation for offers. 
Such solicitation shall include a list of each of the Assets of the Company and 
a request that each such Member make a written offer to the Company, setting 
forth the cash purchase price such Member is willing to pay therefor, within ten
(10) Business Days after receipt of such solicitation. If G&L Member and PHP 
Member offers to purchase one or more of the same Assets, the Manager shall sell
such Asset or Assets to the Member offering the highest price therefor. If 
either G&L Member or PHP Member, but not both, offer to purchase one or more of 
the Assets, whichever of G&L Member or PHP Member is the non-offering Member 
shall direct the Manager to accept or reject such offer on behalf of the 
Company. With respect to any Asset for which (i) no offer was made by G&L Member
or PHP Member or (ii) an offer was made by one Member but rejected by the 
non-offering Member pursuant to the preceding sentence, the Manager shall sell 
such Asset to any third party on terms and conditions it deems satisfactory, but
subject to the prior written approval of G&L Member and PHP Member.

          17.2.  In the event any sale of one or more Assets to a third party 
pursuant to Section 17.2 shall not, for any reason, close pursuant to the terms 
            ------------
of the offer referred to therein, the terms of Section 17.1 shall apply to any 
further sale of such Asset or Assets.

     18.  Further Assurances.  Each party to this Agreement agrees to execute, 
          ------------------
acknowledge, deliver, file and record such further certificates, amendments, 
instruments and documents, and to do all such other acts and things as may be 
required by law, or as may in the

                                      30


<PAGE>
 
opinion of the Manager or counsel to the Company be necessary or advisable to 
carry out the intents and purposes of this Agreement.

19.  Notices. Unless otherwise specified in this Agreement, all notices,
     -------
demands, elections, requests or other communications which any party to this
Agreement may desire or be required to give hereunder shall be in writing and
shall be given by personal delivery, by facsimile or by mailing the same (by
registered or certified first class mail, postage prepaid, return receipt
requested) addressed as follows:

     19.1. To the Company or the Manager:

           c/o G&L Realty Corp.
           439 North Bedford Drive
           Beverly Hills, CA 90210
           Attention: Gary Grabel

           with copies to:

           PHP Healthcare Corporation
           11440 Commerce Park Drive
           Third Floor
           Reston, VA 22091
           Attention: Ben Rosenbaum, III, Esq.
  
           Day, Berry & Howard
           260 Franklin Street
           Boston, MA 02110-3179
           Attention: Lewis A. Burleigh, Esq.

           Martin H. Blank, Jr., Esq.
           11755 Wilshire Boulevard, Suite 1400
           Los Angeles, California 90025-1520

or at such other address as may be designated by the Company by notice given as 
provided in this Article 19 to the Members.
                 ----------

     19.2. To each Member, at its address set forth in Exhibit A to this 
                                                       ---------
Agreement or at such other address as may be designated by it by notice given to
the Company as provided in this Article 19.
                                ----------


                                      31
<PAGE>
 
          19.3.   To any person who hereafter becomes a Member of the Company, 
at such address as may be designated by him or her or it by notice given to the 
Company as provided in this Article 19.
                            ----------

All notices given as provided in this Article 19 shall be deemed to have been 
                                      ----------
given when received by the addressee.

     20.  Limited Buy-Sell.  In the event the Members disagree with respect to 
          ----------------
the transfer, redemption, encumbrance, purchase or other acquisition of a
Member's Interest in the Company, any Members holding 15% or more of an Interest
in the Company in favor of such sale or financing (the "Initiating Member"),
shall have the right to initiate a buy-sell procedure (the "Buy-Sell") which
shall operate as follows. The Initiating Member shall give notice to the
remaining Members (the "Responding Members") of its intention to exercise the
Buy-Sell with respect to the Interests in the Company of the Responding Members
or the Interests in the Company of the Initiating Member, as the case may be, at
a purchase price (the "Purchase Price") equal to the greater of One Dollar
($1.00) or the product of (i) the fair market value of the Company, taking into
consideration, among other things, the fair market value of the Assets then
owned by the Company, and (ii) the Interest of the Responding Members or the
Initiating Member, as the case may be. Each Responding Member shall be required
to respond within five (5) Business Days as to whether it will "buy" or "sell".
If any Responding Member fails to make an election within such period, such
Responding Member shall be deemed to have elected to "sell" its Interest to the
Initiating Member. If all Responding Members respond that they shall "buy", then
they shall purchase the Interest of the Initiating Members at the Purchase Price
within thirty (30) days after their response. If all Responding Members respond
that they shall "sell", then the Initiating Members shall purchase the Interests
of the Responding Members. If the Responding Members do not respond unanimously,
then the Responding Members who responded "buy" shall have an opportunity for
five (5) Business Days to reconsider. If all such Members change their responses
to "sell", then the Initiating Members shall purchase the Interests of the
Responding Members. Those Responding Members who again respond "buy" shall
purchase the Interests of all the non-purchasing Members for the Purchase Price.
In any case in which there is more than one purchasing Member, the purchasing
Members shall purchase the selling Members' Interests in proportion to the
purchasing Members' respective Interests. At the closing for such sale, the
Interests shall be conveyed, free of all liens and encumbrances thereon, and the
Purchase Price shall be paid by wire transfer of immediately available funds.

     21.  Amendment.  Except as otherwise provided in this Amendment, the terms 
          ---------
and provisions of this Agreement may be waived, modified or amended only with 
the written consent of the Manager and all Members.  The Manager shall promptly 
furnish copies of any amendments to this Agreement to the Members.

                                      32



<PAGE>
 
     22.  Captions; Contents.  All section and article titles or captions 
          ------------------
contained in this Agreement and the table of contents, if any, are for 
convenience only and shall not be deemed a part of this Agreement.

     23.  Variation of Pronouns.  All pronouns and all variations thereof shall 
          ---------------------
be deemed to refer to the masculine, feminine or neuter, singular or plural, as 
the identity of the person or persons, thing or entity may require.

     24.  Governing Law.  The Members declare that by entering into this 
          -------------
Agreement they have contracted with reference to the laws of the State of 
Delaware, and the terms and provisions of this Agreement and the legal relations
created by it will in all respects including, without limitation, with respect 
to construction, interpretation, performance, effect and remedies, be governed 
by and constructed in accordance with the internal laws of the State of Delaware
(without regard to the laws of conflict of any jurisdiction).

     25.  Successors and Assigns.  This Agreement shall be binding upon the 
          ----------------------
parties hereto and their respective permitted successors and assigns and shall 
inure to the benefit of the parties hereto and, except as otherwise provided 
herein, their respective permitted successors and assigns.  The Manager may not 
assign its rights under this Agreement nor delegate its duties under this 
Agreement without the consent of each of the Members.

     26.  Counterparts.  The Members may execute this Agreement on separate 
          ------------
counterparts, all of which, collectively, shall be deemed to be a single 
instrument.

     27.  Negation of Third-Party Beneficiaries.  This Agreement and the 
          -------------------------------------
covenants and agreements contained herein are for the sole benefit of the 
parties to this Agreement and their respective permitted successors and assigns 
and may not be enforced by any person or entity not a party to this Agreement 
other than a permitted successor or assign of such party.

     28.  Arbitration.  Any dispute or controversy arising under or in 
          -----------
connection with this agreement may be settled by arbitration in the State of New
Jersey by three (3) arbitrators in accordance with the rules of the American 
Arbitration Association then in effect.  Judgment may be entered on the 
arbitrators' award in any court having competent jurisdiction.  The 
determination of which party or parties will bear costs and expenses arising in 
connection with any arbitration proceeding pursuant to this Article 29 will be 
                                                            ----------
determined by the arbitrators.  Any party may, without violating the provisions 
of this Agreement relating to exclusive arbitration of disputes and 
controversies, seek a temporary restraining order or other injunctive or 
equitable relief from a court of competent jurisdiction if necessary to preserve
the status quo or otherwise prevent irreparable harm pending final resolution of
the dispute or controversy on the merits through arbitration.

                                      33
<PAGE>
 
     29.  Severability.  The provisions of this Agreement are severable.  The 
          ------------
invalidity, in whole or in part, of any provision of this Agreement shall not 
affect the validity or enforceability of any other of its provisions.  If one or
more provisions hereof shall be so declared invalid or unenforceable, the 
remaining provisions shall remain in full force and effect and shall be 
construed in the broadest possible manner to effectuate the purposes thereof.  
The Members further agree to replace such void or unenforceable provisions with 
provisions which will achieve, to the extent possible, the economic, business 
and other purposes of the void or unenforceable provisions.

                                      34
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

                                   G&L Realty Partnership, L.P., as Manager

                                   By: G&L Realty Corp., its General Partner


                                       By:  /s/   Gary Grabel
                                           -----------------------------------
                                           Name:
                                           Title:


                                   G&L Realty Partnership, L.P., as Member

                                   By: G&L Realty Corp., its General Partner


                                       By:  /s/   Gary Grabel
                                           -----------------------------------
                                           Name:
                                           Title:


                                   PHP Healthcare Corporation, as a Member


                                       By:  /s/   Anthony Picini
                                           -----------------------------------
                                           Name:
                                           Title:


                                      35
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                                    MEMBERS
                                    -------

<TABLE> 
<CAPTION> 
---------------------------------------------------------------
    NAME AND ADDRESS          AMOUNT OF INITIAL      PERCENTAGE
                                   CAPITAL
                                CONTRIBUTION
---------------------------------------------------------------
<S>                           <C>                    <C> 
G&L Realty Partnership, L.P.     $3,542,000           80.50%

---------------------------------------------------------------

PHP Healthcare Corporation       $858,000             19.50%

---------------------------------------------------------------

                                  $4,400,000
</TABLE>

Addresses for Notices to the Members:

     PHP Member
     ----------

     11440 Commerce Park Drive
     Reston, VA 22091
     Attention:  Jack M. Mazur, President

     with copies to:

     Ben Rosenbaum, III, Esq.
     Corporate Secretary and General Counsel
     11440 Commerce Park Drive
     Reston, VA 22091

     and

     Fried, Frank, Harris, Shriver & Jacobson
     1001 Pennsylvania Avenue, N.W.
     Suite 800
     Washington, DC 20004
     Attention:  Richard A. Steinwurtzel, Esq.

                                      36
<PAGE>
 
     G&L Member and Manager
     ----------------------
 
     c/o G&L Realty Corp.
     439 North Bedford Drive
     Beverly Hills, CA 90210
     Attention: Gary Grabel

     with copies to:

     Day, Berry & Howard
     260 Franklin Street
     Boston, MA 02110-3179
     Attention: Lewis A. Burleigh, Esq.

     and

     Martin H. Blank, Jr., Esq.
     11755 Wilshire Boulevard, Suite 1400
     Los Angeles, CA 90025-1520


                                      37