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                                                                   Exhibit 10.16



                    AGREEMENT OF SEVERANCE AND MUTUAL RELEASE

         This Agreement of Severance and Mutual Release ("Agreement") is made
effective as of the 1st day of January, 1999 between Annette Hoover ("Hoover")
and Lexford Residential Trust, a Maryland real estate investment trust (together
with its predecessor by merger, Lexford, Inc., formerly known as Cardinal Realty
Services, Inc., "Lexford Trust").

                                   WITNESSETH:

         WHEREAS, Hoover and Lexford each desire to amicably agree to the terms
of Hoover's resignation from all positions including, without limitation, as an
employee or officer with Lexford Trust or any of its subsidiaries, affiliates or
partnerships (collectively with Lexford Trust, "Lexford").

         NOW, THEREFORE, in consideration of the covenants and agreements set
forth in this Agreement, and other good and valuable consideration exchanged by
the parties hereto, the sufficiency of which to support each and every covenant
herein is expressly acknowledged by the parties hereto, the parties agree as
follows:

1.       Resignation.

         Hoover, simultaneous with, and by means of the execution and delivery
hereof, hereby tenders her resignation, effective January 1, 1999, as Senior
Vice President of Property Operations of Lexford Trust and as an employee of
Lexford Properties, Inc. ("LPI") in which status she has heretofore served
pursuant to that certain Employment Agreement between Hoover and LPI dated
August 1, 1996 (the "Employment Agreement"), which resignation Lexford and LPI
have accepted. To the extent not covered by the aforementioned resignation, this
Agreement shall serve as Hoover's resignation from all positions with Lexford.
Accordingly, the term of the Employment Agreement is hereby deemed terminated
and the terms and provisions thereof, solely except those contained in Paragraph
8 which will remain in full force and effect, are of no further force and
effect.

2.       Final Compensation.

         Lexford will pay to Hoover, as severance compensation and in full
consideration of Hoover's release and covenants contained herein:

(a)               the aggregate sum of One Hundred Eighty-seven Thousand Five
                  Hundred Dollars ($187,500), payable in full seven (7) days
                  following the execution and delivery hereof. Hoover
                  acknowledges that such payment to be made to her in accordance
                  with this Paragraph 2 will be made net of applicable employee
                  payroll withholding and other employment taxes. Hoover
                  acknowledges and agrees that the payment to be made to her


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                  pursuant to this Paragraph 2 will be made in full satisfaction
                  of any and all obligations and liabilities which Lexford, LPI
                  or any of their respective affiliates owes, or may owe, to
                  Hoover in respect of the Employment Agreement or any other
                  agreements, documents, instruments or arrangements (whether
                  written or verbal) existing between Hoover and any of them.
                  Such obligations satisfied hereby include, by way of example
                  and not by way of limitation: (i) Lexford's prior obligations
                  under the Employment Agreement to furnish Hoover with any
                  health and dental insurance, life insurance, disability
                  insurance, retirement or other employee benefits of any kind,
                  nature or description, it being understood and agreed that
                  upon the execution and delivery of this Agreement all such
                  obligations shall cease immediately and be of no further force
                  and effect; provided, however, that nothing herein shall
                  impact statutory obligations imposed by the Comprehensive
                  Omnibus Budget Reconciliation Act; and (ii) the obligations of
                  Lexford Trust and LPI (as successor by merger to Rexflor
                  Acquisition Corporation), if any, remaining under that certain
                  Merger Agreement dated August 1, 1996, by and among Lexford
                  Trust, Rexflor Acquisition Corporation, LPI and LPI's former
                  shareholders, including Hoover (the "Merger Agreement").

(b)               Ownership, possession and use of that certain desktop computer
                  terminal which Hoover has used during her employment with
                  Lexford.

(c)               Payment of attorneys' fees and disbursements incurred by
                  Hoover, as well as Peggy Crow Smith, in the negotiation,
                  preparation, review and execution of this Agreement, as well
                  as that certain Severance Agreement and General Release of
                  even date herewith between Lexford Trust and Peggy Crow Smith,
                  in an aggregate amount not to exceed $2,500. Lexford's
                  obligations under this Paragraph 2(c) will be satisfied by
                  direct payment of such attorneys' fees and disbursements in an
                  aggregate amount not to exceed $2,500 to the law firm of
                  Michener, Larimore et. al., of Fort Worth, Texas.

(d)               Any vested benefits, pursuant to the provisions of the
                  Company's 401(k) Savings Plan.

3.       Return of Equipment.

         As provided in Paragraph 2(b) above, Hoover may keep the desktop
personal computer terminal she used during her employment with Lexford; however,
she must return all other equipment owned by Lexford, including, but not limited
to, dictation equipment, and will remove such retained computer terminal as well
as all personal effects from the office space she has occupied at Lexford's
offices in San Antonio, Texas.




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4.      Release by Employee. 

         (a)      Hoover, for herself and her dependents, successors, assigns,
                  heirs, representatives, attorneys, executors and
                  administrators (and her and their legal representatives of
                  every kind), hereby completely and irrevocably discharges and
                  releases Lexford and LPI, their respective officers, trustees,
                  directors, employees, agents, shareholders, affiliates,
                  subsidiaries, related entities, successors and assigns from
                  any and all claims, demands, actions, causes of action and/or
                  liability whatsoever involving any matter arising out of or in
                  any way related, directly or indirectly, to (i) Hoover's
                  employment with Lexford and LPI, including any positions with
                  subsidiary or affiliate entities, compensation therefor, or
                  the termination thereof, including, but not limited to, any
                  claim for employment discrimination in violation of Title VII
                  of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e, et
                  seq., the Americans with Disabilities Act, 42 U.S.C. Section
                  12101, et seq., Ohio Revised Code Section 4112, Ohio Revised
                  Code Section 4101 and any other federal, state or municipal
                  fair employment practice or discrimination laws, statutes or
                  ordinances, (ii) the Merger Agreement; and (iii) any and all
                  other matters, rights, claims, actions, suits, liens, debts,
                  dues, damages or demands of every kind, whether or not
                  referred to in this Agreement, arising, occurring, accruing or
                  in existence on, or prior to, the date hereof. Hoover agrees
                  that she will not seek reinstatement or reemployment with
                  Lexford or any affiliate thereof at any time in the future.

         (b)      Hoover further agrees and acknowledges that she (i) has been
                  advised by Lexford to consult with legal counsel prior to
                  executing this Agreement and the release provided for in this
                  Paragraph 4; (ii) has had an opportunity to consult with and
                  has been advised by legal counsel of her choice; (iii) fully
                  understands the terms of this Agreement; and (iv) enters into
                  this Agreement freely and voluntarily and intending to be
                  bound.

5.       Release by Lexford.

         Except as provided in the immediately succeeding sentence Lexford
Trust, on behalf of itself and its affiliated, related and subsidiary entities,
successors and assigns (herein the "Lexford Releasors"), hereby completely and
irrevocably releases and forever discharges Hoover, her successors, assigns,
heirs, representatives, attorneys, executors and administrators from any and all
claims, demands, damages, actions and/or causes of action of any kind and every
description, which the Lexford Releasors now have or may have had for, upon, or
by reasons of any cause whatsoever, against Hoover. This release shall not,
however, apply to the obligations of Hoover, arising under or evidenced by this
Agreement or under Paragraph 8 of the Employment Agreement.



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6.      Continued Availability and Cooperation.

        (a)       Hoover shall cooperate fully with Lexford and with Lexford's
                  counsel in connection with any future actual or threatened
                  litigation or administrative proceeding involving Lexford, its
                  affiliated, related or subsidiary entities, its officers,
                  directors, shareholders, employees, agents and
                  representatives, and its successors or assigns that relates to
                  events, occurrences or conduct occurring (or claimed to have
                  occurred) during the period of Hoover's employment by Lexford
                  and LPI (or any of its predecessors-in-interest).

        (b)       Hoover shall be reimbursed by Lexford for reasonable travel,
                  lodging, telephone and similar expenses incurred in connection
                  with any such cooperation required under Paragraph 6(a) above,
                  which Lexford shall reasonably endeavor to schedule at times
                  not conflicting with the reasonable requirements of any third
                  party with whom Hoover has a business relationship that
                  provides remuneration to Hoover. Hoover shall not unreasonably
                  withhold her availability for such cooperation.

        (c)       To the extent that Hoover executes and delivers this Agreement
                  on, or before, December 31, 1998, Hoover will continue to
                  perform such duties as are incidental to her continued
                  employment in accordance with the terms of the Employment
                  Agreement through the close of business on December 31, 1998
                  (subject to her use of earned "paid time off" pursuant to
                  Lexford Trust's "PTO" program). Such duties will include, by
                  way of illustration and not by way of limitation, Hoover's
                  cooperation with LPI and LPI's efforts to terminate the
                  leasehold for its San Antonio office space at the lowest
                  obtainable termination costs.

7.      Successors and Binding Agreement.

        (a)       This Agreement shall be binding upon and inure to the benefit
                  of Lexford and any successor of or to Lexford, including,
                  without limitation, any persons acquiring directly or
                  indirectly all or substantially all of the business and/or
                  assets of Lexford whether by purchase, merger, consolidation,
                  reorganization or otherwise be assignable or delegable by
                  Lexford.

        (b)       This Agreement shall inure to the benefit of and be
                  enforceable by Hoover, her personal or legal representatives,
                  executors, administrators, successors, heirs, distributees
                  and/or legatees.

        (c)       This Agreement is personal in nature and none of the parties
                  hereto shall, without the consent of the other parties,
                  assign, transfer or delegate this Agreement or any rights or
                  obligations hereunder except as expressly provided in
                  Paragraphs 7(a) and 7(b) of this Agreement.




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         (d)      This Agreement is intended to be for the exclusive benefit of
                  the parties hereto, and except as provided in Paragraph 7(a)
                  of this Agreement, no third party shall have any rights
                  hereunder.

8.       Confidentiality and Statements to Third Parties.

         (a)      Except as otherwise required by law and except to the extent,
                  and only to the extent, that Lexford has, publicly disclosed,
                  or will publicly disclose the terms of this Agreement due to
                  its status as a reporting company under the Securities
                  Exchange Act of 1934 and Hoover's prior affiliate status,
                  Hoover will not disclose the terms of this Agreement to anyone
                  other than members of her immediate family, her accountants,
                  or her legal advisors, as necessary, and Hoover will require
                  that they and their agents take all reasonable steps to
                  maintain the confidentiality hereof, except as otherwise
                  required by law, and Lexford will further disclose the terms
                  of this Agreement only to those persons (including employees
                  of Lexford) with a genuine business interest in learning such
                  information.

         (b)      Neither Hoover nor Lexford shall, directly or indirectly, make
                  or cause to be made any statements to any third parties
                  criticizing or disparaging the other or commenting adversely
                  on the character or business reputation of the other, but this
                  provision shall not limit the ability or responsibility of
                  either party to respond to the best of its knowledge to
                  administrative or regulatory inquiries or to testify to the
                  best of its knowledge in legal proceedings.

         (c)      Hoover agrees not to disclose, divulge, discuss, copy or
                  otherwise use or suffer to be used in any manner, in
                  competition with, or contrary to the interests of, Lexford or
                  any of Lexford's subsidiaries, affiliates or related entities,
                  customer lists, product research, pricing information,
                  Lexford's trade secrets or any other information that would
                  provide Lexford's competitors with information about Lexford's
                  methods, goals, or customers, it being acknowledged by Hoover
                  that all such information regarding Lexford's business and
                  Lexford's subsidiaries, affiliates and related entities
                  compiled or obtained by, or furnished to, Hoover while Hoover
                  was employed by or associated with Lexford is confidential
                  information and Lexford's exclusive property.

9.       Notices.

         For all purposes of this Agreement, all communications provided for
herein shall be in writing and shall be deemed to have been duly given when
delivered, addressed (a) to Lexford (to the attention of its General Counsel) at
its principal executive offices located at The Huntington Center, 41 South High
Street, Suite 2410, Columbus, Ohio 43215, and (b) to Hoover at her principal
residence, or to such other address as either 



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party may have furnished to the other in writing and in accordance herewith.
Notices of change of address shall be effective only upon receipt.

10.      Governing Law.

         The validity, interpretation, construction and performance of this
Agreement (and every other issue arising hereunder) shall be governed by the
laws of the State of Ohio, without giving effect to the principles of conflict
of laws of such state.

11.      Miscellaneous.

         Lexford and Hoover hereby acknowledge and understand that:

         (a)      Each has been afforded the opportunity to review and consider
                  the terms of this Agreement for a period of forty-five (45)
                  days and any waiver of such opportunity has been effected
                  knowingly and voluntarily with the benefit of legal counsel;

         (b)      Each has availed herself or itself of the opportunity to
                  receive counsel regarding their respective rights, obligations
                  and liabilities;

         (c)      Nothing in this Agreement is or shall be construed as an
                  admission by Lexford of any breach of any agreement or any
                  intentional or unintentional wrongdoing of any nature;

         (d)      Neither Hoover nor Lexford have made any representations
                  concerning the terms or effects of this Agreement other than
                  those contained in this Agreement and this Agreement may not
                  be modified or terminated orally;

         (e)      The terms of this Agreement are not effective or enforceable
                  until seven (7) days after its execution, during which period
                  Hoover may revoke this Agreement;

         (f)      The benefits provided Hoover herein are in excess of the
                  benefits as to which she would otherwise be entitled;

         (g)      The death or disability of Hoover following the execution of
                  this Agreement shall not affect or revoke this Agreement or
                  any of the obligations of the parties hereto. No provision of
                  this Agreement may be modified, waived or discharged unless
                  such waiver, modification or discharge is agreed to in writing
                  signed by Hoover and Lexford. No waiver by either party hereto
                  at any time of any breach by the other party hereto or
                  compliance with any condition or provision of this Agreement
                  to be performed by such other party shall deemed a waiver of
                  similar or dissimilar provisions or conditions at the same or
                  at any prior or subsequent time. No agreements or
                  representations, oral or otherwise, expressed or implied, with
                  respect to the subject matter hereof have been 




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                  made by any of the parties that are not set forth expressly in
                  this Agreement and every one of them (if, in fact, there have
                  been any) is hereby terminated without liability or any other
                  legal effect whatsoever; and

         (h)      Except as provided for in this Agreement, all compensation and
                  other payments due Hoover as a result of her employment with
                  Lexford have been paid in full and Hoover is not entitled to
                  any additional salary, bonus or other payments whatsoever.

         (i)      Hoover hereby represents and warrants to Lexford that she is
                  an unmarried individual.

12.      Entire Agreement.

         This Agreement (together with the other documents and supporting
information delivered simultaneously herewith) shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
shall supercede all prior verbal or written agreements, covenants,
communications, understandings, commitments, representations or warranties,
whether oral or written, by any party hereto or any of its representatives
pertaining to such subject matter.

13.      Validity.

         The validity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement which shall nevertheless remain in full force and effect.

14.      Counterparts.

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Agreement.

15.      Captions and Sections Headings.

         Captions and section headings used herein are for convenience and are
not part of this Agreement and shall not be used in construing it.

16.      Further Assurances.

         Each party hereto shall execute such additional documents and do such
additional things, as may reasonably be requested by the other party to
effectuate the purposes and provisions of the Agreement.




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         IN WITNESS WHEREOF, the undersigned parties have hereunto executed this
Severance Agreement and Mutual Release as of the day and date first above
written.


WITNESSES:                                  LEXFORD RESIDENTIAL TRUST

/s/ Cynthia A. Wolfe                        By: /s/ Bradley A. Van Auken  
-------------------------                      ---------------------------
                                                Bradley A. Van Auken
/s/ Christine Gallion                           Senior Vice President
-------------------------

/s/ Susan D. Krumlauf                           /s/ Annette Hoover
-------------------------                      ---------------------------
                                                ANNETTE HOOVER






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STATE OF OHIO              )
                           )       SS:
COUNTY OF FRANKLIN         )

         BEFORE ME, a Notary Public in and for said County and State, personally
appeared Bradley A. Van Auken, known to me to be the Senior Vice President of
Lexford Residential Trust; he did acknowledge that he executed the foregoing
Agreement of said Maryland real estate investment trust and that the same was
his free act and deed and the free act and deed of said Maryland real estate
investment trust.


                                            /s/ Mark D. Thompson
                                            ----------------------------
                                            Notary Public


STATE OF TEXAS             )
                           )       SS:
COUNTY OF BEXAR            )

         BEFORE ME, a Notary Public in and for said County and State, personally
appeared Annette Hoover, and she did acknowledge that she executed the foregoing
Agreement and that the same was her free act and deed.


                                            /s/ Allison Hockersmith    
                                            ----------------------------
                                            Notary Public




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