<PAGE>

                                                                   EXHIBIT 10.38
 
                     LIMITED LIABILITY COMPANY AGREEMENT 
                                      OF
                             GLN CAPITAL CO., LLC
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                                         <C>
ARTICLE I    DEFINITIONS...................................................   1

ARTICLE II   FORMATION.....................................................   5
     2.1     Organization..................................................   5
     2.2     Purpose and Nature of Business................................   6
     2.3     Name..........................................................   6
     2.4     Principal Place of Business...................................   6
     2.5     Agent.........................................................   6
     2.6     Term..........................................................   6

ARTICLE III  CAPITAL CONTRIBUTIONS.........................................   6
     3.1     Capital Contributions.........................................   6
     3.2     Additional Capital Contributions..............................   7
     3.3     Payment of Capita1 Contributions..............................   7
     3.4     No Return of Capita1 Contribution; No Interest................   7
     3.5     No Priority...................................................   7
     3.6     Taxable Take Out Financing....................................   7
     3.7     NACC Loan.....................................................   7

ARTICLE IV   CAPITAL ACCOUNTS; ALLOCATION OF NET INCOME
             AND NET LOSS; DISTRIBUTIONS...................................   8
     4.1     Capital Accounts..............................................   8
     4.2     Allocation of Net Income and Net Loss.........................   9
     4.3     Allocations Generally.........................................  11
     4.4     Distributions.................................................  11
     4.5     Intentionally Deleted.........................................  13
     4.6     Special Allocations...........................................  13

ARTICLE V    MANAGEMENT....................................................  14
     5.1     Management Power and Authority................................  14
     5.2     Valuations....................................................  17
     5.3     Removal of Managing Member....................................  17
     5.4     Consent of Members............................................  18
     5.5     Time and Attention of the Members, Other Business Activities..  19
     5.6     Good Faith....................................................  19
     5.7     Exculpation and Indemnification of the Members................  19
     5.8     Interested Party Transactions.................................  20
     5.9     Proscriptions.................................................  20
     5.10    Contracts and Documents.......................................  20
     5.11    Tax Matters...................................................  21

</TABLE> 

                                     -i-
<PAGE>
 
<TABLE>
<S>                                                                         <C>
     5.12    Payment of Costs and Expenses.................................   21
     5.13    Credit Enhancement............................................   21
     5.14    Loan Servicing................................................   22
     5.15    Exclusivity...................................................   22

ARTICLE VI   TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS..............   22
     6.1     Transfers.....................................................   22
     6.2     Involuntary Withdrawal........................................   23
     6.3     No Withdrawal.................................................   23
     6.4     PAT Transfer .................................................   23

ARTICLE VII  BUDGET........................................................   23

ARTICLE VIII REPRESENTATIONS AND WARRANTIES................................   24
     8.1     Representations and Warranties of the Members.................   24

ARTICLE IX   BUY-SELL......................................................   25
     9.1     Buy-Sell of All of Assets.....................................   25
     9.2     Deadlock on Sale of an Asset..................................   26

ARTICLE X    RECORDS, ACCOUNTING AND REPORTS,
             AND COMPANY FUNDS.............................................   26
     10.1    Records and Accounting........................................   26
     10.2    Tax Information...............................................   27
     10.3    Annual Reports; Monthly Reports...............................   27
     10.4    Company Funds.................................................   28

ARTICLE XI   DISSOLUTION AND WINDING UP....................................   28
     11.1    Events Causing Dissolution....................................   28
     11.2    Liquidation...................................................   29

ARTICLE XII  AMENDMENTS ...................................................   29

ARTICLE XIII VOTING RIGHTS; MEETINGS.......................................   29
     13.1    Meetings......................................................   29
     13.2    Proxies.......................................................   30
     13.3    Conduct of Meetings...........................................   30
</TABLE> 

                                     -ii-
<PAGE>
 
<TABLE>
<S>                                                                         <C>
ARTICLE XIV  MISCELLANEOUS.................................................   30
     14.1    Notices.......................................................   30
     14.2    Governing Law.................................................   31
     14.3    Successors and Assigns........................................   31
     14.4    Entire Agreement..............................................   31
     14.5    Counterparts..................................................   31
     14.6    Members Not Agents ...........................................   31
     14.7    Specific Performance .........................................   31
     14.8    Attorneys Fees................................................   31

</TABLE>

SCHEDULES

1  Members, Percentage Interests, Capita1 Contributions and Nomura Loan

2  Members and Addresses

                                     -iii-
<PAGE>
 
          THIS LIMITED LIABILITY COMPANY AGREEMENT OF GLN CAPITAL CO., LLC is
entered into as of November 25, 1996 by and between G&L REALTY PARTNERSHIP, LP.,
a Delaware limited partnership and PROPERTY ACQUISITION TRUST I, a Delaware
business trust ("PAT").

                                   BACKGROUND
                                   ----------

          The parties have agreed to organize and operate a limited liability
company in accordance with the terms and subject to the conditions of this
Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth therein, the sufficiency of which is
acknowledged, it is hereby agreed as follows:

                                   ARTICLE I
                                  DEFINITIONS
                                  -----------

     1.1  When used in this Agreement, the following terms have the meanings set
forth below:

          "Acquisition Period" means the Period beginning on the date hereof and
ending twenty-four (24) months from the date hereof unless extended by mutual
agreement of the Members.

          "Act" means the Delaware Limited Liability Company Act, as amended
from time to time. 

         "Additional Capital Contribution" has the meaning set forth in Section
                                                                        -------
3.1(b).
------

         "Adjusted Capital Account Deficit" has the meaning set forth in Section
                                                                         -------
4.2(d).
------ 

          "Affiliate" means with respect to any Person, any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person.

          "Agreement" means this Limited Liability Company Agreement, as
originally executed and as amended from time to time as herein provided.

          "Annual Period" means any twelve month year commencing on April 1 and
ending on the next succeeding March 31.
<PAGE>
 
          "Capital Account" means, with respect to any Member, the account to be
established and maintained by the Company for the Member as provided in Section
                                                                        -------
4.1.
--- 

          "Capital Contribution" means, with respect to any Member, the
cumulative sum of the Member's contributions to the capital of the Company
pursuant to Article III.

          "Committed Capital" means the capital contributions agreed to be made
by each Member as set forth on Schedule 1.
                               ---------- 

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

          "Company" means the limited liability company created under this
Agreement and any limited liability company continuing the business of the
Company in the event of a dissolution and continuation as herein provided.

          "Distributable Cash" means cash on hand of the Company from all
sources available for distribution to the Members after taking into account all
Company expenses, debts, liabilities and obligations then due and payable, and
less any Reserves before payment of NACC Loan Payments.

          "Distribution Date" means thirty (30) days after the end of each
quarter.

          "Effective Date" means the date of this Agreement.

          "Facility(ies)" means any housing or retirement facility for older or
elderly persons acquired, financed or developed by the Company.

          "Fiscal Year" means the annual accounting period of the Company, which
initially shall be April 1 to March 31.

          "Interest" means an Interest Holder's share of the Net Income and Net
Losses of, and the right to receive distributions from the Company.

          "Interest Holder" means any Person who validly holds an Interest as a
Member or as an unadmitted assignee of a Member.

          "Involuntary Withdrawal" means, with respect to any Member, the
bankruptcy, insolvency, liquidation or dissolution of such Member under
applicable federal or state law.

          "Loan(s)" means any loans made by the Company to Persons and secured
by Facilities.

                                       2
<PAGE>
 
          "Managing Member" means initially G&L Realty Partnership, L.P. and any
replacement or successor Managing Member.

          "Member" means each Person signing this Agreement and any Person who
subsequently is admitted as a member of the Company.

          "Membership Interest" means all of the rights of a Member in the
Company to the extent provided by law, subject, however, to the provisions of
this Agreement, including a Member's: (i) Interest; (ii) right to inspect the
Company's books and records; and (iii) right to participate in the management of
and vote on matters before the Company.

          "NACC" means Nomura Asset Capital Corporation, a Delaware corporation.

          "NACC Loan" means the $20,000,000 loan to be made by NACC to the
Company as described in Section 3.7.
                        ----------- 

          "NACC Loan Payments" means payments of NACC Loan Interest, NACC Loan
Principal, or both.

          "Net Asset Value" means the fair market value of the assets of the
Company, including without limitation the Facilities and Loans.

          "Net Income" and "Net Loss" mean, for each Fiscal Year, the Company's
income or loss, as the case may be, for U.S. 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 determining Net
Income or Net Loss), with the following adjustments:

          (i)   any income of the Company that is exempt from U.S federal income
                tax and not otherwise taken into account shall be added to Net
                Income or subtracted from Net Loss;

          (ii)  any expenditures of the type described in Section 705(a)(2)(B)
                of the Code, or treated as Section 705(a)(2)(B) of the Code
                expenditures pursuant to Regulations Section 1.704-
                1(b)(2)(iv)(i), and not otherwise taken into account, shall be
                subtracted from Net Income or added to Net Loss; and

          (iii) the deduction for PAT Loan Interest shall not be included in
                Net Income or Net Loss.

                                       3
<PAGE>
 
          "Percentage Interest" means, with respect to any Member, the Member's
percentage interest in Company distributions and allocations made to the Members
as set forth on Exhibit A.

          "Person" means an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate or other
entity.

          "Preferred Return" means the cumulative right given to each Member to
receive in respect of each Annual Period a sum equal to nine percent (9%) per
annum of the Members' then outstanding Preferred Capital Amount (computed from
time to time during any such Annual Period to reflect reductions in or additions
to such Preferred Capital Amount; and if such Preferred Capital Amount shall at
any time be reduced to zero, then the Preferred Return shall thereupon be
suspended until such time as such Capital Preferred Amount returns to a positive
figure). Such Preferred Return shall not constitute a guaranteed payment within
the meaning of Section 707(c) of the Code. The Preferred Return shall begin on
the date of any Initial or Additional Capital Contribution by a Member, and
shall be cumulative (but not compounded) from Annual Period to Annual Period if
not distributed for or with respect to any given Annual Period. Any amounts to
be distributed in connection with the foregoing during the first Annual Period
in which the Preferred Return begins shall be reduced ratably in the same ratio
as the number of days in such first Annual Period bears to 360, and all amounts
to be distributed on other than the last day of an Annual Period shall be
computed ratably based on the elapsed portion of such Annual Period.

          "Preferred Capital Amount" means with respect to Members, the Initial
Capital Contribution of a Member, plus any Additional Contributions made by a
Member, less all distributions made to the Member as a return of Capital
Contribution as described in Section 4.4(c).
                             -------------- 

          "Regulations" means, at any particular time, the regulations currently
in force as final or temporary regulations of the U.S. Department of Treasury
promulgated under the Code.

          "Reserves" means any such amounts from time to time reserved,
designated or set aside from Company funds by the Members for the payment of,
among other amounts, actual or anticipated costs, payments, obligations and
liabilities of the Company of any kind, or to reflect appropriate valuations of
assets, all in accordance with generally accepted accounting principles.

          "Tax Matters Member" means the Managing Member in the capacity
described in Section 5.9.
             ----------- 

                                       4
<PAGE>
 
          The terms listed in the left column below are defined in the Article
or Sections in the right column below.

<TABLE> 
<CAPTION> 
Term                                                   Article/Section
----                                                   ---------------
<S>                                                    <C> 
Acceptance Notice                                      Section 9.1      
Acceptance Period                                      Section 9.1      
Annual Operating Budget                                Article VII      
Consent                                                Section 6.1      
Buy-Sell Notice                                        Section 9.1      
Buy-Sell Valuation                                     Section 9.1      
Financing Costs                                        Section 5.13     
G&L                                                    Recitals         
Initial Capital Contribution                           Section 3.1      
Major Deadlock                                         Section 9.1      
Minimum Gain                                           Section 4.2(d)   
NACC Loan Interest                                     Section 3.7      
NACC Loan Principal                                    Section 3.7      
Nondefaulting Member                                   Section 3.1(c)   
Offeree                                                Section 9.1      
Offeror                                                Section 9.1      
PAT                                                    Recitals         
Proposing Member                                       Section 9.2      
Rejection Notice                                       Section 9.2      
Removal Notice                                         Section 5.3(a)   
Return Calculation                                     Section 5.3(b)   
Sale Notice                                            Section 9.2      
Sale Property                                          Section 9.2      
Sale Property Acceptance Notice                        Section 9.2      
Sale Property Acceptance Period                        Section 9.2      
Sale Property Purchase Price                           Section 9.2      
Tax Exempt Financing                                   Section 5.13     
Term                                                   Section 2.6      
Transfer                                               Section 6.1     
Transfer Request                                       Section 6.4      
Trigger Amount                                         Section 5.3(b)    
</TABLE> 

                                  ARTICLE II
                                   FORMATION
                                   ---------

     2.1  Organization. The parties hereby organize a limited liability company
          ------------                                                         
pursuant to the Act and the provisions of this Agreement and, for that purpose,
have

                                       5
<PAGE>
 
caused a Certificate of Formation to be prepared, executed and filed with the
offices of the Delaware Secretary of State on November 25, 1996.

     2.2  Purpose and Nature of Business. The purpose, nature and character of
          ------------------------------                                      
the business of the Company is solely to (i) acquire, own, construct, renovate,
repair, and operate the Facilities, (ii) makes Loans to Persons secured by
Facilities and (iii) engage in any and all business activities and affairs
incidental thereto. It is the intent of the parties that after the Acquisition
Period the Company shall commence to sell and liquidate the Facilities and the
Loans on an orderly basis.

     2.3  Name. The name of the Company shall be GLN Capita1 Co., LLC or such
          ----                                                               
other name as may be determined by the Managing Member, provided that the name
may not include any reference to any Member without its written consent. From
time to time after the execution of this Agreement, the Managing Member shall
cause a fictitious business name statement for the Company to be filed,
published and maintained if and to the extent required by applicable law.

     2.4  Principal Place of Business. The principal place of business of the
          ---------------------------                                        
Company shall be 439 North Bedford, Beverly Hills, California 90210. The
Managing Member may at any time and from time to time change the Company's
principal place of business and may establish such additional places of business
as it may select, in which event the Managing Member shall so notify the other
Members.

     2.5  Agent. The registered agent of the Company for service of process in
          -----                                                               
the State of Delaware and any other jurisdiction where the Company's business
requires that an agent be designated is Corporation Service Company. The address
of the registered agent in the State of Delaware is 1013 Centre Road,
Wilmington, New Castle County, Delaware 19805.

     2.6  Term. The term of the Company began upon the acceptance of the
          ----                                                          
Certificate of Formation by the office of the Delaware Secretary of State and
shall continue in existence until December 31, 2026 (the "Term"), unless its
existence is sooner terminated pursuant to this Agreement.

                                  ARTICLE III
                             CAPITAL CONTRIBUTIONS
                             ---------------------

     3.1  Capital Contributions.
          --------------------- 

          (a)   The Members have contributed or will contribute as their
respective initial Capital Contributions (the "Initial Capital Contributions")
the amounts set forth on Schedule 1. In addition, PAT has caused NACC to make an
                         ----------                                             
initial advance on the NACC Loan in the amount shown on Schedule 1.
                                                        ---------- 

                                       6
<PAGE>
 
          (b)  At the request of the Managing Member, each Member agrees to
contribute as Additional Capital Contributions (on a pro rata basis based on its
percentage of Committed Capital) the remainder of its Committed Capital as set
forth on Schedule 1 as and when needed by the Company. PAT's Committed Capital
         ----------                                                           
shall be funded one-third as an Additional Capital Contribution and two-thirds
by NACC as an advance on the NACC Loan. PAT shall cause NACC to make the
required advances on the NACC Loan. Each Member shall fund its required
Committed Capital within thirty (30) days of the request therefor by the
Managing Member, with the prior written approval of the Members.

     3.2  Additional Capita1 Contributions. Except as set forth in Section
          --------------------------------                         -------
3.1(b) and in Section 5.3(a), no Member shall be required to make any Additional
------        -------------- 
Capital Contributions.

     3.3  Payment of Capita1 Contributions. All Capital Contributions made by
          --------------------------------                                   
the Members or funding on the NACC Loan shall be in cash and be reflected by an
appropriate entry on the Company's books and records and on Schedule 1 hereto.
                                                            ----------        

     3.4  No Return of Capital Contribution; No Interest.
          ---------------------------------------------- 

          (a)  Except as otherwise expressly provided herein, no Member shall
have any right to demand or receive the return of all or any portion of its
Capital Contribution. The Company will have no obligation to return all or any
portion of any Member's Capital Contribution. Under circumstances permitting or
requiring a return of a Member's Capital Contribution, the Member shall have no
right to receive property other than cash except as the Managing Member may
otherwise determine in its discretion.

          (b)  Except as otherwise expressly provided herein, no Member shall be
entitled to interest on any Capital Contribution or on its Capital Account.

     3.5  No Priority. Except as otherwise expressly provided herein, no Member
          -----------                                                          
shall have a priority over any other Member as to the return of a Capital
Contribution upon the dissolution of the Company.

     3.6  Taxable Take Out Financing. PAT or its Affiliates shall have a right
          --------------------------                                          
of first refusal to provide any taxable financing on any Facilities or with
respect to any Loans held by the Company provided that such financing is
competitive with the market. PAT's right of first refusal shall be exercisable
within thirty (30) days of receipt by PAT of written notice from the Company of
the need for taxable financing.

     3.7  NACC Loan. NACC shall make available $20,000,000 for the NACC Loan
          ---------                                                         
which shall be funded pro rata with PAT's Capital Contributions (i.e., for each
                      --- ----                                   ----
$1,000 of

                                       7
<PAGE>
 
PAT Capital Contributions, NACC shall advance $2,000 on the NACC Loan). The
principal amount of the NACC Loan shall bear interest at the same rate as the
Preferred Return as and when advanced. The interest ("NACC Loan Interest") and
principal ("NACC Loan Principal") shall be payable as set forth in Section 4.4;
                                                                   ----------- 
provided, however, that the NACC Loan may only be repaid out of Distributable
Cash, if any. The NACC Loan shall be unsecured and shall be evidenced by the
Promissory Note attached hereto as Schedule 3.
                                   ---------- 

                                   ARTICLE IV
                        CAPITAL ACCOUNTS; ALLOCATION OF
                     NET INCOME AND NET LOSS; DISTRIBUTIONS
                     --------------------------------------

     4.1  Capital Accounts.
          ---------------- 

          (a) Capita1 Accounts. The Company shall establish and maintain on its
              ----------------                                                 
books a Capital Account for each Member, which shall be subject to adjustment
from time to time as follows:

              (i) There shall be credited to a Member's Capital Account the
Member's Capital Contribution, the Member's allocable share of Net Income (as
well as any items of income specially allocated to the Member) and the amount of
the Company's liabilities, if any, assumed by the Member or which are secured by
any asset of the Company distributed to the Member;

              (ii) There shall be debited to a Member's Capital Account an
amount equal to the Distributable Cash and other amounts distributed to the
Member pursuant to this Agreement, the Member's allocable share of any Net Loss
(as well as any items of loss or deduction specially allocated to the Member)
and the amount of the Member's liabilities, if any, assumed by the Company or
which are secured by any asset contributed by the Member to the Company;

              (iii) Where Section 704(c) of the Code applies to Company property
or where Company property is revalued pursuant to paragraph (b)(2)(iv)(f) of
Section 1.704-1 of the Regulations, each Member's Capital Account shall be
adjusted in accordance with paragraph (b)(2)(iv)(g) of Section 1.704-1 of the
Regulations (which reevaluation may occur with the consent of all Members) as to
allocations to the Members of depreciation, depletion, amortization and gain or
loss, as computed for book purposes with respect to such property;

              (iv) When Company property is distributed in kind (whether in
connection with liquidation and dissolution or otherwise), the Capital Accounts
of the Members shall first be adjusted to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in such property (that has
not been reflected in the

                                       8
<PAGE>
 
Capital Account previously) would be allocated among the Members if there were a
taxable disposition of such property for the fair market value of such property
(taking into account Section 7701(g) of the Code) on the date of distribution;

              (v) In the event all or a portion of a Member's Interest is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the portion of the Capital Account of the transferor-Member relating
to the Interest transferred;

              (vi) In determining the amount of any liability for purposes of
paragraphs (a)(i) and (a)(ii) of this Section 4.1, there shall be taken into
                                      -----------
account Section 752(c) and any other applicable provisions of the Code; and

              (vii) The Members' Capital Accounts shall be subject to adjustment
as the Managing Member may determine is necessary in order to comply with
Section 704 of the Code and the Regulations promulgated thereunder.

     4.2  Allocation of Net Income and Net Loss.
          ------------------------------------- 

          (a)  The Net Income and Net Loss of the Company for each taxable
period following the Effective Date shall be allocated at the end of the taxable
period in question, before distributions for the taxable period have been
registered in the Members' Capital Accounts.

          (b)  Subject to Sections 4.2(d), (e) and (f) and Section 4.6, Net
                          ----------------------------     -----------     
Income of the Company shall be allocated between the Members as follows:

              (i) Offset of Excess Loss Allocations. First, between the Members
                  ---------------------------------
in the proportion and to the extent that (A) the cumulative Net Loss previously
allocated to each Member under Section 4.2(c)(vii) exceeds (B) the cumulative
                               -------------------
Net Income previously allocated to such Member under this Section 4.2(b)(i);
                                                          -----------------

              (ii) Offset of NACC Loan Loss Allocations. Second, to PAT to the
                   ------------------------------------
extent that (A) the cumulative Net Loss previously allocated to PAT under
Section 4.2(c)(vi) exceeds (B) the cumulative Net Income previously allocated to
------------------
PAT under this Section 4.2(b)(ii);
               ------------------

              (iii) Restoration of PAT Capital. Third, to PAT to the extent that
                    --------------------------
(A) the cumulative Net Loss previously allocated to PAT under Section 4.2(c)(v)
                                                              -----------------
exceeds (B) the cumulative Net Income previously allocated to PAT under this
Section 4.2(b)(iii);
-------------------

              (iv) PAT Preferred Return. Fourth, to PAT until the cumulative
                   --------------------                                     
allocations to PAT under this Section 4.2(b)(iv), less the cumulative
                              ------------------                     
allocations of Net

                                       9
<PAGE>
 
Loss to PAT under Section 4.2(c)(iv), equal PAT's cumulative Preferred Return
                  ------------------                                         
(whether or not paid) from the commencement of the Company through the end of
the relevant period;

              (v)  Restoration of G&L Capital. Fifth, to G&L to the extent that
                   --------------------------
(A) the cumulative Net Loss previously allocated to G&L under Section
                                                              -------
4.2(c)(iii) exceeds (B) the cumulative Net Income previously allocated to G&L
-----------
under this Section 4.2(b)(v).
           ----------------- 

              (vi)  G&L Preferred Return. Sixth, to G&L until the cumulative
                    --------------------                                    
allocations to G&L under this Section 4.2(b)(vi), less the cumulative
                              ------------------                     
allocations of Net Loss to G&L under Section 4.2(c)(ii), equal G&L's cumulative
                                     ------------------                        
Preferred Return (whether or not paid) from the commencement of the Company
through the end of the relevant period; and

              (vii)  Excess Income. Seventh, between the Members in proportion 
                     -------------
to their respective Percentage Interests at the end of the relevant period.

          (c) Subject to Sections 4.2(d), (e) and (f) and Section 4.6, Net Loss
                         ----------------------------     -----------          
of the Company shall be allocated between the Members as follows:

              (i)  Offset of Excess Income. First, between the Members in the
                   -----------------------                                   
proportion and to the extent that (A) cumulative Net Income previously allocated
to each Member under Section 4.2(b)(vii) exceeds (B) the cumulative Net Loss
                     -------------------                                    
previously allocated to such Member pursuant to this Section 4.2(c)(i);
                                                     ----------------- 

              (ii)  Offset of G&L Preferred Return. Second, to G&L to the extent
                    ------------------------------                              
that (A) cumulative Net Income previously allocated to G&L under Section
                                                                 -------
4.2(b)(vi) exceeds (B) the cumulative Net Loss previously allocated to G&L
----------                                                                
pursuant to this Section 4.2(c)(ii);
                 ------------------ 

              (iii)  Offset of G&L Capital Account. Third, to G&L to the
                     -----------------------------                      
extent of the positive balance in its Capital Account;

              (iv)  Offset of G&L Preferred Return. Fourth, to Nomura to the
                    ------------------------------
extent that (A) cumulative Net Income previously allocated to PAT under Section
                                                                        -------
4.2(b)(iv) exceeds (B) the cumulative Net Loss previously allocated to PAT
----------
pursuant to this Section 4.2(c)(iv);
                 ------------------ 

              (v)  Offset of PAT Capital Account. Fifth, to PAT to the extent
                   -----------------------------                             
of the positive balance in its Capital Account;

                                       10
<PAGE>
 
              (vi) Offset of NACC Loan. Sixth, to PAT to the extent the
                   -------------------
outstanding principal balance of the NACC Loan, reduced by the excess of prior
allocations of Net Loss pursuant to this Section 4.2(c)(vi) over prior
                                         ------------------
allocations of Net Income pursuant to Section 4.2(b)(ii); and
                                      ------------------     

              (vii) Excess Loss. Seventh, between the Members in proportion to
                    -----------
their respective Percentage Interests at the end of the relevant year or period.

          (d) Net Loss shall not be allocated to a Member to the extent such
allocation would result in or increase a deficit balance in such Member's 
Capital Account, computed in accordance with Section 1.704-1(b)(2)(ii)(d) of the
Regulations, except to the extent of the Member's Share of "Minimum Gain" as
defined in Section 1.704-1(b)-2 of the Regulations.

          (e) Notwithstanding anything to the contrary contained herein,
deductions for NACC Loan Interest shall be specially allocated to PAT.

          (f) The Members shall modify the allocation provisions set forth in
this Section 4.2 if necessary (i) to satisfy the requirements of Sections 704(b)
     -----------                                                                
and (c) of the Code and the Regulations promulgated thereunder, (ii) to
eliminate any deficit Capital Account balance for a Member, or (iii) to
otherwise better reflect the overall economic or business arrangement of the
Members in respect of any particular item of income, gain, deduction or loss. In
addition, upon the occurrence of an event resulting in the dissolution and
termination of the Company, the Managing Member shall allocate items of income,
gain, loss and deductions between the Members in such a manner as, to the
maximum extent possible, will result in each Member having a zero balance in its
capital account upon termination.

     4.3  Allocations Generally. Except as otherwise required by Section 4.6,
          ---------------------                                  ----------- 
all items of Company income, gain, loss and deduction as determined for federal
income tax purposes for each Company taxable year shall be allocated in the same
manner as the related profits or losses for such taxable year are allocated
pursuant to Section 4.2 hereof in accordance with Code Section 704(b). Pursuant
            -----------                                                        
to Code Section 704(c), income, gain, loss and deduction with respect to
property contributed to the Company by a Member, or the book value of which is
adjusted for Capital Account maintenance purposes, shall be allocated among the
Members, in a manner consistent with the allocation among the Members of the
book items attributable to such property, so as to take account of the variation
between the basis of the property to the Company and its book value.

     4.4  Distributions.
          ------------- 

          (a) Subject to Section 4.6, Distributable Cash, if any, shall be
                         -----------                                      
distributed to the Members quarterly in arrears. The amount of NACC Loan
Interest to be paid for

                                       11
<PAGE>
 
each quarter shall be paid only out of Distributable Cash and shall be
calculated for such quarter as a percentage of the weighted average NACC Loan
Principal outstanding during such quarter, which percentage shall be the
equivalent of a fraction, the numerator of which is the amount of Preferred
Return paid to PAT for such quarter and the denominator of which is the weighted
average of PAT's Preferred Capital Amount outstanding during such quarter. In
other words, NACC Loan Interest paid shall be the same percentage of the
weighted average NACC Loan Principal outstanding as the percentage of the
weighted average of PAT's Preferred Capital Amount outstanding that is
represented by the Preferred Return paid to PAT.

          (b) With respect to distributions attributable to the Acquisition
Period, Distributable Cash, if any, up to the amount of Net Income attributable
to the period in respect to which the distribution is being made, that remains
after payment of NACC Loan Interest for such period shall be distributed as
follows:

              (i) First, to G&L in an amount equal to up to the greater of (A)
its unpaid Preferred Return through the end of such period or (B) 33% of the Net
Income for such period allocated to G&L under Sections 4.2(b)(vi) and (vii); and
                                              -----------------------------     

              (ii) Second, to PAT in an amount equal to up to the greater of (A)
its unpaid Preferred Return through the end of such period or (B) 300% of the
amount distributed to G&L under Section 4.4(b)(i).
                                ----------------- 

          (c) With respect to distributions attributable to periods after the
Acquisition Period, Distributable Cash, if any, shall be distributed as follows:

              (i) First, to G&L in an amount equal to up to 33% of the Net
Income for such period allocated to G&L under Sections 4.2(b)(vi) and (vii); 
                                              ----------------------------- 

              (ii) Second, to PAT and NACC, as the case may be, in an amount
equal to up to the sum of its unpaid Preferred Return plus unpaid NACC Loan
Interest (1/3 of which payment will be deemed Preferred Return and 2/3 as NACC
Loan Interest);

              (iii) Third, to PAT and NACC, as the case may be, in an amount
equal to up to the sum of its Preferred Capital Amount plus the NACC Loan
Principal (1/3 of which payment will be deemed in respect of Preferred Capital
Amount and 2/3 in respect of NACC Loan Principal);

              (iv) Fourth, to G&L in an amount, when added to the Distribution
under Section 4.4(c)(i) above, equals up to the sum of its unpaid Preferred
      -----------------
Return plus its Preferred Capital Amount (to be applied first to Preferred
Return and then Preferred Capital Amount); and

                                       12
<PAGE>
 
              (v) Fifth, between the Members in proportion to their respective
Percentage Interests.

          (d)   Any amount distributed to Members pursuant to Section 4.4(c)(i),
                                                              ------------------
(iii), (iv) or (v) (other than with respect to Preferred Return) and any amounts
------------------
distributed pursuant to Section 4.4(b) in excess of a Member's Preferred Return
                        --------------                                          
shall constitute a return of Capital Contributions and a reduction of their
respective Preferred Capital Amounts.

     4.5  Intentionally Deleted
          ---------------------

     4.6  Special Allocations. The following special allocations shall be made
          -------------------                                                 
in the following order:

          (a)   Notwithstanding any other provision of this Article IV, if there
                                                            ----------          
is a net decrease in Minimum Gain during any Fiscal Year, except as otherwise
permitted by Sections 1.704-2(f)(2),(3),(4) and (5) of the Regulations, items of
income and gain for such Fiscal Year (and subsequent years, if necessary) in the
order provided in Section 1.704-(j)(2)(i) of the Treasury Regulations shall be
allocated among all Members whose shares of Minimum Gain decreased during that
year in proportion to and to the extent of such Member's share of the net
decrease in Minimum Gain during such year. The allocation contained in this
Section 4.6(a) is intended to be a minimum gain chargeback within the meaning of
--------------   
Section 1.704-2 of the Regulations, and shall be interpreted consistently
therewith.

          (b)   Notwithstanding any other provision of this Article IV, if
                                                            ----------     
there is a net decrease in "Partner nonrecourse debt minimum gain", except as
provided in Section 1.704-2(i) of the Regulations, items of Company income and
gain for such fiscal year (and subsequent years, if necessary) in the order
provided in Section 1.704-2(j)(2)(ii) of the Regulations shall be allocated
among all Members whose share of "Partner nonrecourse debt minimum gain"
decreased during that year in proportion to and to the extent of such Member's
share of the net decrease in "Partner nonrecourse debt minimum gain" during such
year. This Section 4.6(b) is intended to comply with the "partner nonrecourse
           --------------                                                      
debt minimum gain" chargeback requirement in Section 1.704-2 of the Regulations
and shall be interpreted consistently therewith.

          (c)   In the event any Member unexpectedly receives any adjustments,
allocations or distributions described in Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6) of the Regulations, items of income and gain shall be specially
allocated to such Member in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, the Adjusted Capital Account Deficit of such
Member as quickly as possible, provided that an allocation pursuant to this
Section 4.6(c) shall be made only if and to the extent that such Member would
--------------                                                                
have an Adjusted Capital Account Deficit after all other allocations

                                       13
<PAGE>
 
provided for in this Article IV have been tentatively made as if this Section
                                                                      -------
4.6(c) were not in this Agreement.
------                             

          (d) In the event any Member has an Adjusted Capital Account Deficit
at the end of any Fiscal Year, each such Member shall be specially allocated
items of Company income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 4.6(d) shall be
                                                       --------------          
made only if and to the extent that, such Member would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Article IV have
                                                                 ----------     
been made as if this Section 4.6(d) were not in this Agreement.
                     --------------                             

          (e) Nonrecourse deductions (as defined in Section 1.704-2(b)(1) of the
Regulations) for any fiscal year or other period shall be specifically allocated
to the Members in accordance with the allocation of Net Loss.

          (f) Any "partner nonrecourse deductions" (as defined in Section
1.704-(i)(1) of the Regulations) for any fiscal year or other period shall be
allocated to the Member who bears the economic risk of loss with respect to the
"partner nonrecourse debt" to which such member nonrecourse deductions are
attributable.

          (g) Solely for tax purposes, in determining each Member's allocable
taxable income or loss of the Company, depreciation, depletions, amortization
and gain or loss with respect to any contributed property, or with respect to
revalued property where the Company's property is revalued pursuant to paragraph
(b)(2)(iv)(f) of Section 1.704-1 of the Regulations, shall be allocated to the
Members in the manner (as to revaluation, in the same manner as) provided in
Section 704(c) of the Code and Regulation Section 1.704-3(b) or (c), as
determined by the Managing Member. The allocation shall take into account, to
the full extent required or permitted by the Code, the difference between the
adjusted basis of the property to the Member contributing it (or, with respect
to property which has been revalued, the adjusted basis of the property to the
Company) and the fair market value of the property determined by the Managing
Member at the time of its contribution or revaluation, as the case may be.

                                   ARTICLE V
                                   MANAGEMENT
                                   ----------

     5.1  Management Power and Authority. Subject to the provisions of Sections
          ------------------------------                               --------

5.3 and 5.4, the Members shall have exclusive right, power and authority to
-----------                                                                
manage and control the business and affairs of the Company, provided, however,
                                                            --------  ------- 
that subject to the restrictions contained herein, the Managing Member shall
have the right to manage the day to day affairs of the Company. Without limiting
the generality of the foregoing, except as otherwise expressly provided in this
Agreement, the Managing Member shall have the right, power and authority on
behalf of the Company to:

                                       14
<PAGE>
 
          (a) negotiate or renegotiate all or any portion of any agreements to
which the Company is a party or to which it may become a party;

          (b) spend the capital and revenues of the Company in the exercise of
the right, power and authority possessed by the Managing Member hereunder;

          (c) manage the Company's business, including but not limited to, the
supervision and direction of all Company employees and the hiring and
termination of the services of any Company employee;

          (d) enter into and execute any agreements and all other instruments
deemed by the Managing Member to be necessary or appropriate to the proper
operation of the Company or to effectively and properly perform its duties or
exercise its powers hereunder;

          (e) borrow any money or otherwise obtain credit from banks and other
lending institutions and in that connection to pledge, hypothecate and grant
security interests in Company assets, provided that any third-party borrowings
shall be superior to the NACC Loan;

          (f) enter into such agreements and contracts with parties and to give
receipts, releases and discharges with respect to all of the foregoing and any
matters relating thereto as the Managing Member may deem advisable or
appropriate;

          (g) sell, trade, exchange or otherwise dispose of the whole or any
part of Company assets, upon such term and conditions and for such consideration
as the Managing Member may determine;

          (h) make such decisions and elections (including without limitation an
election pursuant to Section 754) under the Code on behalf of the Company as it
deems best in its sole and absolute discretion and without liability to any
Members therefor;

          (i) employ officers and employees of the Company and engage or
retain agents, accountants and attorneys as the Managing Member deems
appropriate and to pay them reasonable compensation from Company assets for
their services rendered to the Company and to delegate to such Persons rights,
power and authority of the Managing Member hereunder as it sees fit;

          (j) intentionally deleted;

          (k) purchase such policies of liability, casualty or other insurance,
including, without limitation, insurance against errors and omissions of the
Managing

                                       15
<PAGE>
 
Member, which it deem necessary or appropriate for the protection or furtherance
of the business, operations or affairs of the Company;

          (1) incur or assume obligations for and on behalf of the Company, to
protect and preserve the business and assets of the Company, and to discharge
obligations of the Company;

          (m) pay taxes, licenses or assessments of whatever kind or nature
imposed upon or against the Company or the Company's business, and for these
purposes to make such returns and do all such other acts and things as it may
deem necessary or appropriate;

          (n) deposit and maintain all monies and other funds of the Company
as provided in Section 10.4 and to withdraw funds from the Company's accounts
               ------------                                                  
for the purpose of making expenditures, or otherwise defraying costs and
expenses of the Company, or for any other proper Company purpose as agreed to by
the Members;

          (o) distribute Distributable Cash and other funds of the Company as
provided in this Agreement;

          (p) provide or cause to be provided all such management,
administrative, and personnel services, office space, furniture, equipment and
supplies as it deems necessary or appropriate in connection with its management
of the Company or the conduct of the Company's business, operations or affairs;

          (q) institute, prosecute, defend, settle, compromise and dismiss
lawsuits or other judicial or administrative proceedings brought on behalf of,
or against, the Company and to engage counsel and others in connection
therewith;

          (r) apply for and execute all such applications for permits and
licenses of the Company as it deems necessary or appropriate;

          (s) make any expenditure, including, without limitation, all
reimbursements to the Members as provided in this Agreement;

          (t) plan, manage and evaluate the day-to-day financial and fiscal
affairs and needs of the Company;

          (u) cause the Company to comply with all laws, rules, regulations
and court and administrative orders applicable to the conduct of the business
and operations or affairs of the Company;

                                       16
<PAGE>
 
          (v)  keep all books of account and other records of the Company in the
manner provided in this Agreement;

          (w)  otherwise conduct the day-to-day management, business, operations
and affairs of the Company solely to further and promote the business and
purpose of all the Company in the interests of all the Members and, in
connection therewith, to perform, or cause the Company to perform, all other
actions related or incidental thereto which it deems necessary or appropriate;

          (x)  borrow or raise monies, from time to time, to facilitate or 
enable the Company to conduct its business or affairs;

          (y)  engage in any transaction or transactions with the Managing
Member or its officers, directors, shareholders or Affiliates, provided, that in
causing the Company to engage in such transaction or transactions, (i) the
Managing Member acts in good faith and in the best interests of the Company and
(ii) such transaction or transactions are on terms which are no less favorable
to the Company than would be obtained in a comparable arm's-length transaction
with an unrelated third party;

          (z)  make all elections and exercise all options granted the Company 
in this Agreement; and

          (aa)  prepare the Annual Budget and submit to PAT for its approval.

     5.2  Valuations. The Managing Member shall cause a valuation of the
          ----------                                                    
Company's assets at least once a quarter or more frequently if requested by
either Member. Either Member may cause a third party firm to value the Company's
assets at any time at the Company's expense provided the firm is approved by
both Members.

     5.3  Removal of Managing Member.
          -------------------------- 

          (a)  To the extent that the Net Asset Value is less than 102% of the
total of (i) outstanding third party indebtedness (including all accrued
interest and fees) of the Company, plus (ii) the then PAT Preferred Capital
Amount and the then outstanding balance of NACC Loan Principal plus accrued and
unpaid Preferred Return and the then outstanding balance of NACC Loan Interest
(the foregoing collectively, the "Trigger Amount"), PAT shall have the right,
exercisable upon thirty (30) days' notice (the "Removal Notice") to G&L, to
remove G&L as the Managing Member and appoint a manager for the Company. In the
event that within five (5) business days after the Removal Notice, G&L
contributed additional Capital Contributions to the Company in sufficient
amounts to cause the Net Asset Value to be greater than 103% of the Trigger
Amount, it shall remain as Managing Member. Any such additional Capital

                                       17
<PAGE>
 
Contributions shall increase G&L's Preferred Capital Amount but shall not
increase its Percentage Interest;

          (b)   In the event that the cash on cash leveraged return on the
assets of the Company falls below 8% on an annualized basis (the "Return
Calculation"), PAT shall have the right, upon written notice to G&L, to remove
G&L as the Managing Member and appoint a manager for the Company. The Return
Calculations shall not include any funds which have not been invested by the
Company or individual assets (Facilities and Loans) until the closing of the
Loan. The Members shall agree as to timing of the inclusion of a new acquisition
or loan closing in the Return Calculation when they approve a new loan or an
acquisition of a Facility; and

          (c)   Any manager designated by PAT pursuant to Sections 5.3(a) or (b)
                                                          ----------------------
shall succeed to and assume the duties of the Managing Member in Section 5.1.
                                                                 ----------- 
The manager shall not be a Member but may be an Affiliate of a Member. The cost
of the manager shall be a Company expense. Notwithstanding its removal as
Managing Member, G&L shall continue to be a Member and have its obligations to
fund Committed Capital and shall receive its allocations and distributions
pursuant to Article IV.

     5.4  Consent of Members. Notwithstanding anything to the contrary contained
          ------------------                                                    
herein, the Managing Member shall not take any of the following actions without
the prior written consent of the Members:

          (a) Enter into an agreement to acquire or develop any Facilities;

          (b) Enter into any agreements or commitments to make any Loans;

          (c) Sell, convey or transfer any Loans or Facilities;

          (d) Incur any indebtedness or enter into any contracts or agreements;

          (e) Admit any Members;

          (f) Enter into any agreements with loan servicer pursuant to Section
                                                                       -------
5.14;
----

          (g) Enter into any agreements with a special loan servicer to manage
trouble loans;             

          (h) Terminate or dissolve the Company;

                                       18
<PAGE>
 
          (i) Amend or modify any documents or agreements relating to servicing
or evidencing loans to the Company;

          (j) Cause the Company to enter into any business activity not
described in Section 2.2;
             -----------

          (k) Merge or consolidate the Company with any Person; and

          (l) Modify or amend or terminate this Agreement or the Certificate.

     5.5  Time and Attention of the Members, Other Business Activities. The
          ------------------------------------------------------------     
Members and their respective officers, directors and employees shall devote to
the management of the Company and the accomplishment of the Company's purposes,
only so much of their time and attention as the Members and its officers,
directors and employees deem necessary or appropriate in their discretion. The
Members' officers, directors, shareholders and affiliates may engage in any
other business activity without offering the opportunity to any other Member or
to the Company.

     5.6  Good Faith. Each Member shall perform its obligations under this
          ----------                                                      
Agreement to the best of its ability and shall use its best efforts to carry out
the purposes of the Company for the benefit of all of the Members.

     5.7   Exculpation and Indemnification of the Members.
           ---------------------------------------------- 

          (a) Neither the Members nor any officer, director, employee, 
Affiliate, associate or agent of the Members shall be liable to the Company or
to the other Members for any action or failure to act based upon errors in
judgment, negligence or other fault in connection with the business or affairs
of the Company, so long as such officer, director, employee, Affiliate,
associate or agent determined reasonably and in good faith that such action or
failure to act was in the best interest of the Company and such action or
failure to act did not constitute fraud, bad faith, criminal conduct or gross
negligence.

          (b) The Company, its receiver or trustee on behalf of the Company
shall indemnify the Members and their respective officers, directors, employees,
Affiliates, associates, and agents to the fullest extent permitted by law and
shall hold them harmless from and with respect to all (i) fees, costs and
expenses including, without limitation, attorneys' fees (which shall be paid as
incurred) incurred in connection with or resulting from any claim, action or
demand against the Members or against any of their respective officers,
directors, employees, Affiliates, associates or agents that arise out of or in
any way relate to the Company, its assets, business or affairs; and (ii) any
resulting losses or damages from any such claim, action or demand, including
amounts paid in settlement or compromise of the claim action or demand. This
indemnification shall apply, however,

                                       19
<PAGE>
 
only so long as the Members or their respective officers, directors, employees,
Affiliates, associates or agents determined reasonably and in good faith that
such action or failure to act was in the best interest of the Company and such
action or inaction did not constitute fraud, bad faith, criminal conduct or
gross negligence. The termination of any action, suit or proceeding by judgment,
order or settlement, or upon a plea of nolo contendere or its equivalent, shall
not of itself create a presumption that any person acted fraudulently, in bad
faith or criminally or was grossly negligent.

          (c) For purposes of this Section 5.6, acts or failures to act
                                   -----------                         
undertaken upon the informed advice of counsel shall be deemed to be actions
undertaken in good faith, within the scope of authority, and in the best
interests of the Company.

     5.8  Interested Party Transactions. The Members agree that the Company may
          -----------------------------                                        
engage in any other transaction not specifically referred to herein with the
Members or their respective officers, directors, employees, Affiliates,
associates and agents.

     5.9  Proscriptions. Notwithstanding any provision of this Agreement to the
          -------------                                                        
contrary, the Managing Member shall have no authority to:

          (a) act in contravention of this Agreement;

          (b) assign the assets of the Company in trust for the benefit of
creditors or on the assignees promise to pay the debts of the Company; or

          (c) do any act that would make it impossible to carry on the ordinary
business of the Company.

     5.10  Contracts and Documents. All contracts, instruments, and documents
           -----------------------                                           
requiring the signature of the Company shall be executed solely by the Managing
Member in the name of the Company only. The Managing Member may, by appropriate
resolution of its board of directors, designate and authorize one or more
specified directors, officers or employees of the Managing Member or the Company
to execute documents on its behalf in its capacity as the Managing Member. Any
document executed in the manner set forth in this Section 5.10, as to persons
                                                  ------------               
dealing with the Company, shall be conclusively deemed to be binding upon the
Company. The Members acknowledge and agree that any person doing business with
the Company may rely solely on the authority of the Managing Member, and that no
consent of any other Members will be required to effect any transaction by the
Company within the scope of the Managing Member's authority as provided in this
Agreement.

                                       20
<PAGE>
 
     5.11  Tax Matters.
           ----------- 

          (a) The Managing Member shall serve as the "Tax Matters Partner" of
the Company as defined by Section 6231(a)(7) of the Code. In that capacity, the
Managing Member is authorized and empowered to act and represent the Company and
each of the Members before the Internal Revenue Service in any audit or
examination of any Company tax return and before any court selected by the
Managing Member for judicial review of any adjustments assessed by the Internal
Revenue Service. By the execution of this Agreement, the Members consent and
acknowledge that the Managing Member shall be the Tax Matters Partner, and that
the Members agree to be bound by, and agree not to take any action inconsistent
with, the actions or inaction of the Tax Matters Partner, including, but not
limited to, the extension of the statute of limitations or any contest,
settlement or other action or position that the Tax Matters Partner deems proper
under the circumstances. Each Member agrees to notify the Tax Matters Partner of
any such action to be taken by the Member, in violation of this Agreement or
otherwise, at least ten days prior to the date the Member takes the action. The
Tax Matters Partner shall notify each Member in writing of all administrative
and judicial proceedings for the adjustment of Company items and shall include
in the periodic reports to the Members information it deems appropriate in its
discretion to keep the Members informed of the status of the proceedings. The
Tax Matters Partner shall have the authority to take all actions necessary or
desirable in its discretion to accomplish the matters set forth in this Section
                                                                        -------
5.11.
---- 

          (b) The Company shall bear all expenses, including legal and
accounting fees, claims, liabilities, losses, and damages incurred by the Tax
Matters Partner in connection with any administrative or judicial proceeding
with respect to the tax liability of the Members. The Members shall have no
obligation to provide funds for such purpose. The taking of any action and the
incurring of any expense by the Tax Matters Partner in its discretion and the
provisions of limitations of liability of Managing Member and indemnification
set forth in Section 5.7 shall be fairly applicable to the Tax Matters Partner
             -----------                                                      
in its capacity as such.

     5.12  Payment of Costs and Expenses. Except as set forth in Section 5.13,
           -----------------------------                         ------------ 
the Company shall be responsible for all costs and expenses of the Company
relating to Company activities including, without limitation, all legal fees,
accounting fees and other costs and expenses relating to the formation of the
Company. The Company shall reimburse the Members for expenses incurred in
connection with the startup of the Company as approved by the Members.

     5.13  Credit Enhancement. If the Company desires to obtain tax exempt
           ------------------                                             
financing (the "Tax Exempt Financing") and if deemed appropriate by the Members
for a Facility, the Managing Member shall, at the cost and expense of the
Company (the "Financing Costs"), apply for government backed credit enhancement
(FHA or FNMA)

                                       21
<PAGE>
 
for Tax-Exempt Financing. In the event G&L obtains the Credit Enhancement, G&L
shall be entitled to a fee equal to one percent (1%) of the loan amount (less
the Financing Costs) and payable out of the proceeds from the Tax-Exempt
Financing.

     5.14  Loan Servicing. The Company shall engage a Loan Servicer, acceptable
           --------------                                                      
to both Members, for an annual fee not to exceed twelve and one-half (12.5)
basis points. In the event the Company has trouble loans, the Company shall
engage a Special Servicer as determined by the Members.

     5.15  Exclusivity. During the Acquisition Period, neither Member will enter
           -----------                                                          
into any arrangements with another Person for the purpose of providing short-
term loans for or secured by health care facilities, provided that PAT shall not
be prohibited from making short-term loans or other financing of health care
facilities in the normal course of its business. In the event the Company elects
not to make a Loan, any Member voting to make the Loan may make the Loan for its
own account on such terms and conditions as it elects.

                                  ARTICLE VI
               TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS
               ------------------------------------------------

     6.1  Transfers. Except as set forth in this Article VI, without the prior
          ---------                              ----------                  
written consent of all the Members ("Consent"), which Consent may be withheld in
the sole discretion of each such Member, no Member may, directly or indirectly,
transfer, sell, convey, assign, pledge, hypothecate, license, donate or
otherwise dispose of ("Transfer") all, or any portion of, or any interest or
rights in, the Membership Interest owned by the Member, and no interest holder
may Transfer all, or any portion of, or any interest or rights in, any Interest.
Each Member hereby acknowledges the reasonableness of this prohibition in view
of the purposes of the Company and the relationship of the Members. The Transfer
of any Membership Interest in violation of the prohibition contained in this
Section 6.1 shall be deemed invalid, null and void, and of no force or effect.
-----------                                                                   
Any Person to whom Membership Interest is attempted to be transferred in
violation of this Section 6.1 shall not be entitled to vote on matters coming
                  -----------                                                
before the Members, participate in the management of the Company, act as an
agent of the Company, receive distributions from the Company or have any other
rights in or with respect to the Membership Interest. Notwithstanding anything
to the contrary, a Consent with respect to any such Transfer shall not be deemed
a Consent to or obviate the need for a Consent to any subsequent Transfer. As
part of any Transfer, each of the Managing Member and PAT acknowledge and agree
that (i) the terms, provisions and conditions of this Agreement will require
amendment or modification to reflect changes in the Members, Interest Holders
and Percentages as a result of such Transfer, and (ii) that each Consent shall
specifically be subject to satisfactory negotiation and execution of such
amendment or modification.

                                       22
<PAGE>
 
     6.2  Involuntary Withdrawal. Immediately upon the occurrence of an
          ----------------------                                       
Involuntary Withdrawal, the successor of the withdrawn Member shall thereupon
become an Interest Holder but shall not become a Member. If the Company is
continued as provided in Section 11.1(a), the successor Interest Holder shall
                         ---------------                                     
have all the rights of an Interest Holder but shall not be entitled to receive
in liquidation of the Interest the fair market value of the Member's Interest as
of the date the Member involuntarily withdrew from the Company.

     6.3  No Withdrawal. No Member shall voluntarily withdraw from the Company.
          -------------                                                        

     6.4  PAT Transfer. Notwithstanding Sections 6.1 and 6.3, PAT shall be
          ------------                  ------------     ---                 
permitted to freely Transfer its Membership Interest to any Person. Any such
transferee or assignee shall be admitted to the Company as a Member within
twenty (20) days of the written request of PAT to transfer its Membership
Interest (the "Transfer Request") and shall hold its Membership Interest subject
to all the terms and conditions and be entitled to all the benefits and rights
of this Agreement, including, without limitation, the Transfer restrictions
contained in Sections 6.1 and 6.3. Notwithstanding the foregoing, in the event
             ------------     ---                                             
PAT attempts a Transfer to a Person who is not an Affiliate of PAT, G&L may, at
its option, elect to trigger the Buy-Sell pursuant to Section 9.1 within ten
                                                      -----------           
(10) days of receipt of the Transfer Notice, in which event the Transfer by PAT
shall be suspended pending the conclusion of the Buy-Sell.

                                  ARTICLE VII
                                    BUDGET
                                    ------

     The Managing Member shall submit to PAT, for PAT's written approval, an
annual budget, on such form as approved by the Member (an "Annual Operating
Budget") for the Company not later than November 1st of each calendar year,
setting forth in reasonable detail budgeted monthly operating income and monthly
operating capital and other expenses for the Company, including all Facilities
owned by the Company and any Loans to be funded subject to binding commitments
or Loan agreements. PAT shall have the right to approve such Annual Operating
Budget and, in the event that PAT objects to the proposed Annual Operating
Budget submitted by the Managing Member, PAT shall advise the Managing Member of
such objections within ten (10) days after receipt thereof (and deliver to the
Managing Member a reasonably detailed description of such objection) and the
Managing Member shall promptly revise such Annual Operating Budget and resubmit
the same to PAT. PAT shall advise the Managing Member of any objections to such
revised Annual Operating Budget within ten (10) days after receipt thereof (and
deliver to the Managing Member a reasonably detailed description of such
objection) and the Managing Member shall promptly revise the same in accordance
with the process described in this sentence until PAT approves an Annual
Operating Budget; provided that if the proposed Annual Operating Budget is not
finalized on or prior to the date on which such budget is required to be
submitted to

                                       23
<PAGE>
 
any lender to the Company pursuant to the terms of the loan agreement from such
lender (and the Managing Member and PAT have acted in good faith to resolve any
disputes they have with respect to such budget), then the Company shall submit
its original budget to the lender for approval and after the lender approves
such budget, such budget shall be deemed to be the "Approved Annual Operating
Budget" hereunder. Each such Annual Operating Budget approved by PAT in
accordance with terms hereof shall hereinafter be referred to as an "Approved
Annual Operating Budget". The Annual Operating Budget shall be the budget which
is submitted to the any lender for approval pursuant to the loan agreement or
other similar document with such lender. Until such time that PAT approves a
proposed Annual Operating Budget, the most recently Approved Annual Operating
Budget shall apply; provided that, such Approved Annual Operating Budget shall
                    --------                                                  
be adjusted to reflect actual increases in real estate taxes, insurance premiums
and utilities expenses, forward loan commitments and increases in revenues.

                                  ARTICLE VIII
                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

     8.1  Representations and Warranties of the Members. Each Member makes the
          ---------------------------------------------                       
following representations and warranties to the other Member:

          (a) Organization. It (i) is a duly organized and validly existing
              ------------                                                 
corporation or limited partnership, as the case may be, in good standing under
the laws of the state of its formation, (ii) has the requisite corporate or
partnership power and authority to carry on its business as now being conducted
and (iii) has the requisite corporate or partnership power to execute and
deliver, and perform its obligations under, this Agreement;

          (b) Authorization. The execution, delivery and performance by the
              -------------                                                
Member of this Agreement and the performance of its obligations hereunder (i)
have been duly authorized by all requisite corporate or partnership action on
the part of such Member, (ii) will not violate any provision of any applicable
laws, rules or regulations, any order of any court or other governmental
authority, organizational documents of the Member or any indenture or agreement
or other instrument to which any of them is a party or by which any of them is
bound and (iii) will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, or result
in the creation or imposition of any lien of any nature whatsoever upon any of
the property or assets of the Member pursuant to any such indenture or agreement
or instrument. The Member is not required to obtain any consent, approval or
authorization from, or to file any declaration or statement with, any laws,
rules or regulations, governmental authority or other agency in connection with
or as a condition to the execution, delivery or performance of this Agreement
hereunder;

                                       24
<PAGE>
 
          (c) Litigation. There are no actions, suits or proceedings at law or
              ----------                                                      
in equity by or before any governmental authority or other agency now pending
and served or, to the knowledge of the Member, threatened against the Member;
and

          (d) Agreements. The Member is not in default in any respect in the
              ----------                                                    
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which it is bound.

                                   ARTICLE IX
                                    BUY-SELL
                                    --------

     9.1  Buy-Sell of All of Assets. At any time, upon the occurrence of a Major
          -------------------------                                             
Deadlock (as defined below) or after the first twelve (12) months of the
Acquisition Period, either Member may deliver a written notice (the "Buy-Sell
Notice") to the other (the party delivering such notice being the "Offeror" and
the other party being the "Offeree") pursuant to which the Offeror offers to
either, at the Offeree's election, buy the Offeree's Membership Interest or sell
to the Offeree the Offeror's Interest. Notwithstanding anything in this
Agreement to the contrary, no Member shall have the right to initiate this
provision (i.e., be the "Offeror") if it is in default of any material provision
           ----                                                                
of this Agreement. The Buy-Sell Notice shall specify a dollar amount for all of
the assets of the Company to be used as the basis of the purchase price (the
"Buy-Sell Valuation") at which the Offeror will either (i) buy all of the
Offeree's Membership Interest or (ii) sell to the Offeree an of the Offeror's
Membership Interest. Only one Buy-Sell Valuation shall be identified in the Buy-
Sell Notice and the Buy-Sell Valuation need not be the fair market value of the
Company's assets. The Offeree may accept either (x) the offer to sell or (y) the
offer to buy, in either case by delivering written notice (the "Acceptance
Notice") to the Offeror, within sixty (60) days (the "Acceptance Period") after
receipt of the Buy-Sell Notice, indicating that the Offeree accepts such offer
either to buy or to sell. If the Offeree does not so accept within the
Acceptance Period, then the Offeree shall be deemed, without need of any further
action by any party, to have accepted the offer to sell its Membership Interest
to the Offeror, and have the Offeror purchase Membership Interest, at the Buy-
Sell Valuation. The purchase and sale of Membership Interest resulting from the
foregoing shall occur, and payment of the purchase price for such Interest(s)
shall be made, on or before the sixtieth (60th) day after the earlier of the
date of delivery of the Acceptance Notice to the Offeror and the expiration of
the Acceptance Period. The purchase price for the Membership Interest shall be
the total amount (not less than zero) that would be distributed to the Selling
Member if the Company sold its assets for the Buy-Sell Valuation in an all cash
transaction (net of capital contribution required of the Selling Member but not
yet funded) and net of expenses of sale. "Major Deadlock" means (a) failure of
the Members to agree on any of the items set forth in Section 5.4, (b) the
                                                      -----------         
failure of G&L to agree to the transfer of PAT's Membership Interest pursuant to
                                                                                
Section 6.4, (c) the
-----------         

                                       25
<PAGE>
 
removal of the Managing Member, or (d) the inability or refusal of one of the
Members to make a Capital Contribution when required.

     9.2  Deadlock on Sale of an Asset. If a Member (the "Proposing Member")
          ----------------------------                                      
desires to sell any Loan or Facility (the "Sale Property"), the Member shall
give written notice (the "Sale Notice") thereof to the other Member (the "Other
Member"). The Other Member shall communicate its decision whether or not it
consents to the sale of the Sale Property within ten (10) business days of its
receipt of the Sale Notice. If the Other Member fails to communicate its
decision within such period, the Member shall be deemed to have agreed to sell
the Sale Property. If the Other Member elects not to sell the Sale Property, it
shall give written notice (the "Rejection Notice") thereof to the Proposing
Member, which notice shall specify the dollar amount for the Sale Property to be
used as the basis of the purchase price (the "Sale Property Purchase Price") at
which the Other Member will either (i) buy the Sale Property or (ii) consent to
the sale of the Sale Property to the Proposing Member or its designee. Only one
Sale Property Purchase Price shall be identified in the Rejection Notice and the
Sale Property Purchase Price need not be the fair market value of the Sale
Property. The Proposing Member may accept either (x) the offer to sell or (y)
the offer to buy, in either case by delivering written notice (the "Sale
Property Acceptance Notice") to the Other Member, within sixty (60) days (the
"Sale Property Acceptance Period") after receipt of the Rejection Notice,
indicating that the Proposing Member accepts such offer either to buy or to
sell. If the Proposing Member does not so accept within the Sale Property
Acceptance Period, then the Proposing Member shall be deemed, without need of
any further action by any party, to accept the offer to sell the Sale Property
to the Other Member, and have the Other Member purchase the Sale Property from
the Company at the Sale Property Purchase Price. The purchase and sale of the
Sale Property resulting from the foregoing shall occur, and payment of the
purchase price for the Sale Property shall be made, on or before the sixtieth
(6Oth) day after the earlier of the date of the delivery of the Sale Property
Acceptance Notice to the Other Member and the expiration of the Sale Property
Acceptance Period. The purchasing Member shall pay the Purchase Price to the
Company and the proceeds thereof shall be distributed, reserved or paid to third
parties in the same manner as if the Company sold the Property to a third party.

                                   ARTICLE X
                       RECORDS, ACCOUNTING AND REPORTS,
                               AND COMPANY FUNDS
                               -----------------

     10.1  Records and Accounting.
           ---------------------- 

          (a) The Managing Member shall keep or cause to be kept proper and
complete records and books of account of the Company's business. The books and
records shall be maintained at the Company's principal place of business; and
each Member, or its duly authorized representative, shall have access to such
records, upon

                                       26
<PAGE>
 
reasonable notice and for a proper Company purpose, at all reasonable times
during the Company's business hours. Such books and records shall include,
without limitation: (i) a current list of the full name and last known business,
residence or mailing address of each Member, together with the Capital
Contribution of each Member and the Percentage Interest of each Member; (ii) a
copy of the Certificate of Formation and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which any such certificate
was executed; (iii) a copy of the Company's federal, state and local tax and
information returns and reports, if any, for the six most recent taxable years
of the Company (or such shorter period as the Company shall have been in
business); (iv) a copy of this Agreement, as originally executed and as amended
from time to time; (v) financial statements of the Company as provided in
Section 10.2 for the six most recent Fiscal Years of the Company (or such
------------                                                             
shorter period as the Company shall have been in business); and (vi) other books
and records of the Company for at least the last four Fiscal Years of the
Company (or such shorter period as the Company shall have been in business).
Each Member agrees to keep confidential all information obtained from the
Company other than information already in the public realm, and not to use any
such information for other than a Company purpose, except as may be required to
be disclosed in the reasonable judgment of the disclosing Member by state or
federal law or regulation including, without limitation, securities laws.

          (b) Books and records of the Company shall be kept pursuant to the
accrual method of accounting which shall be the method of accounting followed by
the Company for U.S. federal income tax purposes.

     10.2  Tax Information. The Managing Member shall cause all necessary or
           ---------------                                                  
appropriate tax and information returns for the Company to be prepared and
timely filed with the appropriate authorities. Within 9O days after the end of
each Fiscal Year, the Managing Member shall cause to be mailed to each person
who was a Member at any time during that Fiscal Year all information reasonably
necessary, in the discretion of the Managing Member, for the preparation of the
Member's federal income tax returns, including a Schedule K-1 (Form 1065)
statement showing the Member's share of Net Income or Loss, deductions, and
credits for the Fiscal Year for U.S. federal income tax purposes and the amount
of any distributions made to or for the account of the Member pursuant to this
Agreement.

     10.3  Annual Reports: Monthly Reports.
           ------------------------------- 

          (a) The Managing Member will furnish to each Member annually, (i)
within ninety (90) days following the end of the Company's fiscal year, a
preliminary unaudited financial statement and (ii) within 120 days following the
end of the Company's fiscal year, a complete copy of the Company's annual
financial statement audited by an independent certified public accountant
reasonably acceptable to PAT in accordance with GAAP, or such other accounting
basis reasonably acceptable to PAT,

                                       27
<PAGE>
 
containing statements of profit and loss and the balance sheet for the Company.
The Members agree that the initial auditors shall be Deloitte & Touche. Such
statements shall set forth the financial condition and income and expenses for
the Company for the immediately preceding fiscal year, including, without
limitation, statements of annual net operating income.

          (b) The Managing Member will furnish to each Member, within thirty
(30) days after the end of each month, an unaudited monthly financial statement
for such month.

          (c) The Managing Member shall furnish or cause to be furnished to PAT,
not less than twenty (20) business days prior to the date of filing, a copy of
the Company's "annual federal partnership information return" for PAT's review.

     10.4  Company Funds. The funds of the Company shall be deposited with such
           -------------                                                       
banks and with such withdrawal arrangements as approved by PAT and G&L. The
Managing Member shall deposit Company funds with such servicer as designated by
and pursuant to an agreement approved by PAT. The Company's funds shall not be
commingled with funds of any other person.

                                   ARTICLE XI
                           DISSOLUTION AND WINDING UP
                           --------------------------

     11.1  Events Causing Dissolution. The Company shall dissolve upon the
           --------------------------                                     
happening of any of the following events:

          (a) the Involuntary Withdrawal of a Member, unless the remaining
Members, in the ninety (90) days after the occurrence, unanimously elect to
continue the business of the Company;

          (b) the sale or other disposition, whether in a single transaction or
a series of transactions, of all of the business and assets of the Company after
the Acquisition Period;

          (c) the election by the Members to dissolve the Company;

          (d) the expiration of the term of the Company as provided in Section
                                                                       -------
2.7.
--- 

Dissolution of the Company shall be effective on the day on which the event
occurs giving rise to the dissolution, but the Company shall not terminate until
the Certificate of Limited Company is cancelled in accordance with the laws of
the State of Delaware and the assets of the Company are distributed as provided
in Section 11.2. Notwithstanding
   ------------                 

                                       28
<PAGE>
 
the dissolution of the Company, prior to the termination of the Company as
aforesaid its business and the affairs of the Members, as such, shall continue
to be covered by this Agreement.

     11.2  Liquidation. Upon the dissolution of the Company, the Company's
           -----------                                                    
business shall be wound up and all of the Company's assets, if any, shall be
liquidated expeditiously but in an orderly and businesslike manner. The Managing
Member (or if there is no remaining Managing Member, one or more Persons
selected by a majority in interest of the Members) shall supervise and be solely
responsible for the liquidation of the Company. Before the end of the Fiscal
Year during which the liquidation of the Company occurs (or, if later, within so
days after the date of such liquidation, as determined under Regulations Section
1.704-1(b)(2)(ii)(g)), the Company shall apply and distribute the net proceeds
from its liquidation in the following order of priority:

          (a) first, to pay Company indebtedness owed to creditors other than
Members (including, without limitation, any indebtedness outstanding under the
Financing Documents) and, second, to fund Reserves for contingent liabilities
relating to Company assets sold in liquidation to third parties in such amount
and for such period of time as the Managing Member shall determine;

          (b) next, to pay any Company indebtedness, including without
limitation any accrued and unpaid management fees owed to the Members or any of
them, in proportion to the respective amounts owed to each Member; and

          (c) next, to the Members, in accordance with their positive Capital
Account balances after giving effect to all allocations for such Fiscal Year
pursuant to Article IV and distributions of Distributable Cash and other
distributions previously made.

                                  ARTICLE XII
                                  AMENDMENTS
                                  ----------

     Except as otherwise provided herein, this Agreement may be amended, in
whole or in part, by the unanimous written consent of the Members.

                                  ARTICLE XIII
                            VOTING RIGHTS: MEETINGS
                            -----------------------

     13.1  Meetings. Each Member shall be entitled to vote in accordance with
           --------                                                          
its Percentage Interest as to each matter submitted to a vote of the Members.
Meetings of the Members may be called by either Member, for any matter on which
the Members may vote as set forth in this Agreement. The call, notice, holding
and conduct of

                                       29
<PAGE>
 
meetings of the Members shall otherwise be as set forth in the Act, as the same
may be amended from time to time.

     13.2  Proxies. The use of proxies in connection with any meeting of the
           -------                                                          
Members shall be governed by provisions of Delaware law governing proxies in a
corporate context.

     13.3  Conduct of Meetings. Each meeting of the Members shall be conducted
           -------------------                                                
by an authorized representative of the Managing Member, or such other person as
it shall appoint, pursuant to such rules for the conduct of the meeting as it
shall deem appropriate.

                                  ARTICLE XIV
                                 MISCELLANEOUS
                                 -------------

     14.1  Notices. All notices, consents, approvals and requests required or
           -------                                                           
permitted hereunder shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) hand delivery, with proof of attempted
delivery, (b) certified or registered United States mail, postage prepaid, (c)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, or (d) by telecopier (with answerback
acknowledged) provided that such telecopied notice must also be delivered by one
of the means set forth in (a), (b) or (c) above, addressed if to PAT at c/o
Nomura Asset Capital Corporation, Two World Financial Center, Building B, New
York, NY 10281-1198, Attn: Gregory Anderson, Telefax Number (212) 667-1522 and
if to the Company or Managing Member at G&L Realty Partnership, 439 North
Bedford, Beverly Hills, CA 90210, Attn: Mark Hamermesh, Telefax Number (310)
859-9032, or at such other address as shall be designated from time to time by
any party hereto, as the case may be, in a written notice to the other parties
hereto in the manner provided for in this Section. A copy of all notices,
consents, approvals and requests directed to PAT shall be delivered concurrently
to each of the following: (i) Jay L. Zagoren, Esquire, Dechert Price & Rhoads,
Princeton Pike Corporate Center, 997 Lenox Drive, Building Three, Suite 210,
Lawrenceville, NJ 08648, Telefax Number (609) 520-3259; (ii) Two World Financial
Center, Building B, New York, NY 10281-1198, Attn: Sheryl McAfee, Telefax Number
(212) 667-1022; and (iii) Two World Financial Center, Building B, New York, NY
10281-1198, Attn: Legal Counsel, Telefax Number (212) 667-1022. A copy of all
notices, consents, approvals and requests to G&L shall be delivered concurrently
to Martin H. Blank, Jr., Esq., Suite 1400, 11755 Wilshire Blvd., Los Angeles, CA
90025, Telefax Number (310) 444-9203. A notice shall be deemed to have been
given: (a) in the case of hand delivery, at the time of delivery; (b) in the
case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; (c) in the case of expedited prepaid delivery upon
the first attempted delivery on a Business Day; or (d) in the case of
telecopier, upon receipt of answerback confirmation, provided that such
telecopied notice was also

                                       30
<PAGE>
 
delivered as required in this Section. A party receiving a notice which does not
comply with the technical requirements for notice under this Section may elect
to waive any deficiencies and treat the notice as having been properly given.

     14.2  Governing Law. This Agreement, and the rights of the Members under it
           -------------                                                        
shall be governed by and in accordance with the laws of the State of Delaware
without giving effect to principles of conflicts of laws.

     14.3  Successors and Assigns. This Agreement shall inure to the benefit of,
           ----------------------                                               
and shall be binding upon, the heirs, executors, administrators or other
representatives, successors, and assigns of the Members.

     14.4  Entire Agreement. This Agreement constitutes the entire understanding
           ----------------                                                     
and agreement of the Members and supersedes all other prior understandings and
agreements, written or oral, among the Members.

     14.5  Counterparts. This Agreement may be executed in several counterparts,
           ------------                                                         
each of which shall be deemed an original but all of which shall constitute one
and the same instrument. Facsimile signatures shall be binding upon the
signatories.

     14.6  Members Not Agents. Nothing contained in this Agreement shall be
           ------------------                                              
construed to constitute any Member the agent of another Member, except as
specifically provided in this Agreement.

     14.7  Specific Performance. The parties recognize that irreparable injury
           --------------------                                               
will result from a breach of any provision of this Agreement and that money
damages will be inadequate to fully remedy the injury. Accordingly, in the event
of a breach or threatened breach of one or more of the provisions of this
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act which would constitute a
breach or (ii) compelling the performance of any obligation which, if not
performed, would constitute a breach.

     14.8  Attorneys Fees. In any dispute arising in connection with this
           --------------                                                
Agreement, the prevailing party shall be entitled to reasonable attorneys fees.

                                       31
<PAGE>
 
          IN WITNESS WHEREOF, the Members have executed this Agreement on the
date set forth above.


                              G&L REALTY PARTNERSHIP, L.P.

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

                              By:  /s/ Mark Hamermesh
                                  --------------------
                                Name: Mark Hamermesh
                                Title: Sr. Vice-President


                              PROPERTY ACQUISITION TRUST I


                              By:  /s/ Sheryl McAfee
                                  -------------------
                                Name: Sheryl McAfee
                                Title: Designated Officer



                                    JOINDER
                                    -------


          Nomura Asset Capital Corporation hereby joins in this Limited

Liability Company Agreement of GLN Capita1 Co., LLC solely to agree to advance

the NACC Loan as set forth in Article III and Schedule 1.1 hereof and to agree

to repayment of the NACC Loan as set forth in Article IV hereof.


                                    NOMURA ASSET CAPITAL 
                                    CORPORATION



                                    By: /s/ Gregory Anderson
                                       ----------------------
                                      Name: Gregory Anderson
                                      Title: Vice President

                                       32
<PAGE>
 
                                                                      SCHEDULE 1

            Members, Percentage Interests, Capital Contributions, 
                    Committed Capital and NACC Loan Amounts
                    ---------------------------------------


<TABLE>
<CAPTION>
                                                    Initial       Aggregate
                                    Percentage      Capital       Committed 
Member                               Interest     Contribution     Capital
------                              ----------    ------------    ---------
<S>                                 <C>           <C>             <C>
G&L Realty Partnership, L.P.           49.9%       $125,000       $10,000,000
                                 
Property Acquisition Trust I           50.1%       $125,000/1/    $10,000,000/2/
</TABLE>


-------------------
1.   In addition, NACC has funded $250,000 on the NACC Loan.

2.   NACC shall advance up to $20,000,000 on NACC Loan.

                                       33
<PAGE>
 
                                                                      SCHEDULE 2


MEMBER                                   ADDRESS
------                                   -------
G&L REALTY PARTNERSHIP, L.P.             439 North Bedford
                                         Beverly Hills, California 90210

Property Acquisition Trust I             2 World Financial Center
                                         Building B
                                         New York, New York 10281-1198

                                       34