SEPARATION AGREEMENT AND GENERAL RELEASE


         THIS  AGREEMENT  is made and  entered by and  between  Michael D. Cryan
("Employee")  and Homestead  Village  Incorporated  (together with is directors,
officers,   shareholders  and  other   affiliates,   collectively   referred  to
hereinafter as "Employer").
         WHEREAS, Employee has been employed by the Employer; and
         WHEREAS,  the  parties  have  engaged in  discussions  resulting  in an
amicable and mutually satisfactory  separation of Employee's employment with the
Employer.
         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
set forth below, the parties hereby agree as follows:

         1. Employee hereby resigns as an officer and director of Employer.  The
effective date of Employee's separation of employment with Employer shall be the
close of business on May 11, 1999 (the "Separation Date").

         2.  Employer  acknowledges  and agrees that he has  received all unpaid
salary  through and including the Separation  Date.  Employer shall pay Employee
the  aggregate  amount of One  Million  Two Hundred  Forty Five  Thousand  Eight
Hundred Thirty Three Dollars  ($1,245,833.00) (the "Separation  Amount"),  which
shall be paid in twelve equal  amounts of One Hundred and Three  Thousand  Eight
Hundred  Nineteen  Dollars and Forty Two Cents  ($103,819.42) on the last day of
each month  commencing June 30, 1999 and ending May 31, 2000;  provided that the
first payment of the Separation  Agreement  shall be Ninety Three Thousand Fifty
Dollars  and  Nineteen  Cents  ($93,050.19)  to reflect  the receipt of a salary
payment of Ten Thousand  Seven Hundred Sixty Nine Dollars and Twenty Three Cents
($10,769.23) for the period May 12 through May 22, 1999. All payments under this
Agreement shall be subject to applicable deductions for state and federal taxes.

         3. Employee  agrees that payments under this Agreement  shall be deemed
to include any amounts due Employee for accrued and unused vacation  through the
Separation Date.

         4. Employer shall  maintain  Employee's  telephone  voice mailbox until
September 30, 1999.  Employer shall deliver to Employee the equipment  listed on
Exhibit A without additional consideration.

         5.  Upon the date this  Agreement  becomes  binding  upon  Employee  in
accordance  with Paragraphs 23 and 24, the principal and interest on the loan to
Employee,  evidenced by the Secured  Promissory  Note,  dated  October 15, 1996,
shall be reduced to $62,500,  and thereafter the remaining  unpaid principal and
interest on the Secured Promissory Note shall be forgiven, and all 25,000 shares
of Common Stock of Employer purchased by Employee with the proceeds of such note
shall be  released  from the  security  interest of Employer  and  delivered  to
Employee.  It is  intended  that  this  loan  adjustment  from  the  outstanding
principal  and  interest on June 18,  1999,  to $62,500  qualify  under  Section
108(e)(5) of the Internal  Revenue Code. In addition to the foregoing,  Employer
agrees that for the tax year 1999,  Employer shall cause the accounting  firm of
Arthur  Andersen,  LLP to prepare and file  Employee's  income tax return  which
income tax return shall take the position  that Employee has incurred no taxable
income  consequences as a result of the adjustment in the outstanding  principal
<PAGE>

and interest under the Secured  Promissory Note from the  outstanding  principal
and  interest on June 18,  1999,  to $62,500,  and  Employer  shall pay all fees
charged by Arthur  Andersen,  LLP for so  preparing  and filing  such income tax
return of  Employee.  The content of such income tax return  shall be subject to
Employee's review and approval.

         6.  Employee's  continuous  service  under  Employer's  401(k) plan and
Employer's  Non-Qualified  Savings Plan shall cease as of the  Separation  Date.
Within four (4) to six (6) weeks of Employee's  written  request and pursuant to
the terms of the 401(k) plan,  Employee shall be entitled to a  distribution  of
all the  contributions  to  Employee's  401(k)  account made by  Employee,  plus
earnings thereon, plus Employer matching  contributions to the extent vested, or
a  transfer  of  such  amounts  to  another  plan  at  Employee's  request.  All
distributions  will be net of applicable  withholding taxes, if any. Pursuant to
the  terms  of the  Employer's  Non-Qualified  Savings  Plan  and  any  deferral
elections made by Employee under the Non-Qualified  Savings Plan, Employee shall
be entitled  to a  distribution  of all  deferrals  made by  Employee  under the
Non-Qualified  Savings Plan,  plus  earnings  thereon,  plus  Employer  matching
contributions to the extent vested.  All distributions will be net of applicable
withholding  taxes, if any. Any options granted  Employee under Employer's stock
option plan or under any Security Capital Group  Incorporated  Stock Option Plan
shall expire on the ninetieth day after the Separation Date.

         7.  Employer  shall  extend to Employee  the right to  continue  health
insurance for up to eighteen (18) months,  as may be required by and pursuant to
the terms and conditions of the Consolidated  Omnibus Budget  Reconciliation Act
of 1986. Employer will provide coverage to Employee at Employer's expense to the
extent of any COBRA premium for the first twelve months.  Employee shall pay the
COBRA  premium and other  expenses of such health  insurance  for any  remaining
period of coverage.

         8. At the election of Employee,  Employer  shall provide  Employee with
professional  tax and legal  services,  selected by Employee in Employee's  sole
discretion,  for a  review  of this  agreement  prior  to its  effectiveness  in
accordance with paragraphs 23 and 24, and shall provide outplacement services of
an  experienced  firm  selected by Employer  and  acceptable  to Employee in the
Atlanta,   Georgia  area,  provided  that  the  cost  of  such  tax,  legal  and
outplacement  services shall not exceed in the aggregate  $25,000,  and such tax
and legal services shall not extend beyond the effective date of this Agreement,
and such outplacement services shall not extend beyond May 31, 2000.

         9. In  consideration  of the  promises  contained  in  this  Agreement,
Employee and Employer hereby mutually agree to do the following:

                  a. Except for a claim  based upon a breach of this  Agreement,
         Employee and Employer  hereby  release and forever  discharge the other
         (including,  in the  case  of  Employer,  its  related  and  affiliated
         entities,  and  each  of  their  officers,   directors,   shareholders,
         representatives, agents, employees and insurers (Employee, Employer and
         said related parties are hereinafter collectively and individually "the

<PAGE>

         Releasees")) from any and all rights,  claims,  demands,  debts,  dues,
         sums of  money,  accounts,  attorneys'  fees,  complaints,  judgements,
         executions,  actions  and  causes of action of any  nature  whatsoever,
         cognizable at law or equity, which Employee and Employer have or claim,
         or might  hereafter  have or claim against the Releasees  based upon or
         arising out of any matter or thing  whatsoever,  from the  beginning of
         the world through the date of this Agreement, including but not limited
         to any rights, claims,  complaints or actions or causes of action which
         were or could have been asserted by Employee or Employer arising out of
         or related to  Employee's  employment  by the  Employer  or  Employee's
         resignation  therefrom,  the  purchase  (or  sale to  Employer)  of any
         Employer securities by Employee,  or under any local, state, or federal
         law  dealing  with   employment   discrimination   including,   without
         limitation,  Title  VII of  the  Civil  Rights  Act of  1964,  the  Age
         Discrimination  in Employment Act and the Americans  with  Disabilities
         Act. Notwithstanding the foregoing, no such release shall be applicable
         to any existing  indemnity rights of Employee as an officer or employee
         of  Employer  through  the  Separation  Date,   including  those  under
         Employer's  Amended Articles of Incorporation,  Employer's  Bylaws, the
         Indemnification  Agreement entered into as of October 16, 1996, between
         Employer  and  Employee  or any  insurance  rights in favor of Employee
         including the Directors and Officers Liability Policy of Employer dated
         November 1, 1998, with Reliance National.
                  b.  Employee  shall  promptly  submit to  Employer  an expense
         account report accounting for all business expenses charged by Employee
         to Employer  and all  advances  received,  and repay  Employer  for all
         advances  and all  non-business  related  items  charged by Employee to
         Employer,  if any.  Employee  hereby  agrees  that  such  advances  and
         non-business  related  expenses  may,  at the  option of  Employer,  be
         deducted by Employer  from any of its  payments to Employee  under this
         Agreement.

          10. In consideration of the  promises  contained  in  this  Agreement,
Employee  agrees to each of the  following:

                  a. Except as may be  required  by the lawful  order of a court
          or agency of competent  jurisdiction,  Employee  agrees to keep secret
          and confidential  indefinitely all non-public  information  concerning
          Employer or any  affiliate  thereof which was acquired by or disclosed
          to Employee during the course of Employee's  employment with Employer,
          and not to disclose the same,  either  directly or indirectly,  to any
          other person,  firm or business entity or to use it in any way.

                  b. For a period of one (1) year from the date this   Agreement
          is signed by Employee,  Employee  covenants  and agrees that  Employee
          will not,  whether  for  Employee or for any other  person,  business,
          partnership,  association,  firm,  company  or  corporation,  initiate
          contact  with,  solicit,  divert or take away any of the  employees of
          Employer or any affiliate  thereof who were employees of Employer from
          time  to  time  during  Employee's  employment  with  Employer  or any
          affiliate  thereof and are  employees  of Employer at the time of such
          initiation,   solicitation  or  diversion.


<PAGE>

          11.  Employee  agrees to  immediately turn over to Employer all notes,
offering  materials,  slide shows,  investment  summaries,  memoranda,  records,
documents and all other information,  no matter how produced or reproduced, kept
by Employee or in Employee's possession or control, used in or pertaining to the
business of Employer,  it being hereby  acknowledged  that all of said items are
the sole and exclusive property of the Employer.

         12.  Except as may be required to the  contrary by an order issued by a
court of competent jurisdiction and except for any communication with members of
Employee's  immediate family and any attorney or accountant  rendering advice to
Employee in connection  with this  Agreement,  Employee  shall not,  directly or
indirectly,  discuss or communicate the facts of this  Agreement,  or any of its
terms and provisions with any third party.

         13. Employer agrees not to contest  Employee's  claim for  unemployment
benefits.

         14. From and after the date of presentment of this Agreement,
neither party shall,  directly or indirectly,  take any action which is in fact,
or is intended to be,  contrary to the material  interests of the other party or
any  affiliate  of the other  party,  nor will either  party  disparage  or make
negative, derogatory or defamatory statements about the other party, its related
and affiliated  entities,  its  directors,  officers,  employees,  shareholders,
agents  or  representative,  or any of them,  to any other  person  or  business
entity,  except as may be required by legal process or court order.

         15. Nothing in this  Agreement  shall be deemed an  admission of
wrongdoing  or any kind of liability by either party.

<PAGE>

         16. In the event  Employee  engages in a material  breach of any of the
terms or provisions of this  Agreement,  then Employer shall provide to Employee
written  notice of such  claimed  breach by Employee,  and  Employee  shall have
thirty (30) days from receipt of such written  notice from Employer to cease any
such conduct which Employer claims to be a material breach. If Employee fails to
cure such breach  within such  thirty  (30) day period,  then all of  Employee's
obligations  shall remain and shall be enforceable,  but Employer's  obligations
under this Agreement shall immediately terminate, including, without limitation,
all remaining monetary obligations of Employer to Employee which are outstanding
at the time of said breach. Similarly, Employee shall be relieved of any further
obligation under this Agreement if Employer  materially  breaches its convenants
in this Agreement.

         17. This  Agreement  shall be binding  upon and inure to the benefit of
both parties, their successor and assigns, and any affiliated or related entity,
as well as  Employee's  heirs,  assigns,  administrators,  executors  and  legal
representatives.

         18.  This  instrument  constitutes  the entire  Agreement  between  the
parties,  and may not be modified or amended in any way except by a  subsequent,
written agreement between the parties.

         19. If any term or provision of this  Agreement  shall be determined by
any court of competent  jurisdiction to be invalid,  illegal or unenforceable in
whole or in part,  and such  determination  shall  become  final,  such  term or
provision  shall be deemed to be  severed  or  limited,  but only to the  extent
required  to  render  the  remaining  terms  and  provisions  of this  Agreement
enforceable.  This  Agreement  as thus  amended  shall be enforced so as to give
effect to the intention of the parties insofar as this is possible. In addition,
the parties hereby expressly empower a court of competent jurisdiction to modify
any term or provision of this  Agreement to the extent  necessary to comply with
existing law and to enforce this Agreement as modified.

         20. This  Agreement  shall be construed in accordance  with the laws of
the State of Georgia.

         21. The language used in this Agreement  shall  be  deemed  to  be  the
language  chosen by the parties  hereto to express their mutual  intent,  and no
rule of strict construction shall be applied against any person.

         22.      This Agreement may be signed in multiple counterparts, each of
which shall be deemed to be an  original  for all  purposes.

         23.  Employee  may revoke  this  Agreement  within  twenty-one  days of
Employee's signing it. If Employee revokes this Agreement, Employee shall return
any benefits  Employee has received and all other  provisions of this  Agreement
shall not be effective or enforceable.  Revocation, along with a cashier's check
for any benefits  Employee may have received  hereunder,  should be delivered to
Employer's  offices at 2100 RiverEdge  Parkway,  Atlanta,  Georgia 30328,  Attn:
Chief Executive Officer. For such revocation to be effective, the notice and the
cashier's  check must be received  no later than 5:00 p.m.  on the  twenty-first
calendar day after  Employee signs this  Agreement.


<PAGE>

          24.  EMPLOYEE  AFFIRMS  THAT  EMPLOYEE  HAS BEEN GIVEN A PERIOD OF AT
LEAST  TWENTY-EIGHT  DAYS WITHIN  WHICH TO  CONSIDER  THIS  AGREEMENT,  AND THAT
EMPLOYEE HAS CAREFULLY READ AND REVIEWED ALL THE TERMS AND CONDITIONS  CONTAINED
IN THIS  AGREEMENT AND FULLY  UNDERSTANDS  THIS AGREEMENT TO BE A RELEASE OF ALL
CLAIMS,  KNOWN OR  UNKNOWN,  PRESENT OR FUTURE,  THAT  EMPLOYEE  HAS OR MAY HAVE
AGAINST  EMPLOYER  ARISING  OUT OF  EMPLOYEE'S  EMPLOYMENT  BY  EMPLOYER  OR ITS
TERMINATION.  EMPLOYEE  ALSO AFFIRMS  THAT  EMPLOYEE HAS BEEN ADVISED TO CONSULT
WITH AN ATTORNEY  PRIOR TO EXECUTING  THIS  AGREEMENT  AND THAT EMPLOYEE HAS, IN
FACT,  BEEN GIVEN FULL  OPPORTUNITY TO REVIEW THIS  AGREEMENT WITH COUNSEL,  AND
THAT  EMPLOYEE  SIGNS IT  VOLUNTARILY  OF HIS OWN  VOLITION,  WITHOUT  DURESS OR
COERCION. EMPLOYEE REPRESENTS THAT EMPLOYEE IS SIGNING THIS AGREEMENT BECAUSE OF
THE  COMPENSATION  TO BE PAID BY EMPLOYER  UNDER THIS  AGREEMENT  WHICH  EXCEEDS
SEPARATION COMPENSATION GENERALLY AVAILABLE UNDER EMPLOYER'S POLICIES.


<PAGE>


         IN WITNESS  THEREOF,  the parties have executed  this  Agreement on the
date(s) set forth below.

                                                  HOMESTEAD VILLAGE INCORPORATED


                                                  By


                                                  Title


                                                  Date




                                                  MICHAEL D. CRYAN




                                                  (Signature)


                                                  Date




<PAGE>


                                    EXHIBIT A
                                       to
                    Separation Agreement and General Release
                                       of
                                Michael D. Cryan


Equipment

          1.   Compaq computer presently in Employee's office.
          2.   Telephone presently in in Employee's possession.


<PAGE>


State of                                             )
                                      ) ss
County of                                            )

     On ____________________, 1999, ____________________    personally  appeared
before me,

           _____    who is personally known to me
           _____    whose identity I proved on the basis of ____________________
           _____    whose identity I proved on the oath/affirmation of
           ____________________, a credible witness

to be the signer of the above instrument, and  he/she acknowledged  that  he/she
signed it.



                                        Notary Public

                                        My Commission expires





State of                                             )
                                      ) ss
County of                                            )

     On ____________________, 1999, ____________________   personally   appeared
before me,

           _____    who is personally known to me
           _____    who is personally known to me
           _____    whose identity I proved on the basis of ____________________
           _____    whose identity I proved on the oath/affirmation of
           ____________________, a credible witness

to be the signer of the above instrument, and  he/she acknowledged  that  he/she
signed it.



                                         Notary Public

                                         My Commission expires