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                      CHANGE IN CONTROL AGREEMENT                             
     
     
     THIS AGREEMENT made as of June 18, 1997 by and between Evans Withycombe 
Residential, Inc., a Maryland corporation (the "Company"), and George E. 
O'Clair (the "Executive").
                                       
                            WITNESSETH
     
     WHEREAS, the Board of Directors of the Company (the "Board") recognizes 
that the possibility of a Change in Control (as hereinafter defined) exists 
and that the threat or the occurrence of a Change in Control can result in 
significant distractions of its key management personnel because of the 
uncertainties inherent in such a situation;
     
     WHEREAS, the Board has determined that it is essential and in the best 
interest of the Company and its stockholders to retain the services of the 
Executive in the event of a threat or occurrence of a Change in Control and 
to ensure his continued dedication and efforts in such event without undue 
concern for his personal financial and employment security; and
     
     WHEREAS, in order to induce the Executive to remain in the employ of the 
Company, particularly in the event of a threat or the occurrence of a Change 
in Control, the Company desires to enter into this Agreement with the 
Executive to provide the Executive with certain benefits in the event his 
employment is terminated as a result of, or in connection with, a Change in 
Control and to provide the Executive with certain other benefits whether or 
not the Executive's employment is terminated.
                                       
                            AGREEMENT
     
     NOW, THEREFORE, in consideration of the respective agreements of the 
parties contained herein and other good and valuable consideration, the 
receipt and sufficiency of which are hereby acknowledged, it is agreed as 
follows:
     
     1.   TERM OF AGREEMENT.  This Agreement shall commence as of the date 
hereof and shall continue in effect until December 31, 1998; PROVIDED, 
HOWEVER, that on December 31, 1998 and on each anniversary thereof, the term 
of this Agreement shall automatically be extended for one year unless either 
the Company or the Executive shall have given written notice to the other 
prior thereto that the term of this Agreement shall not be so extended; AND 
PROVIDED, FURTHER, HOWEVER, that notwithstanding any such notice by the 
Company not to extend, the term of this Agreement shall not expire prior to 
the expiration of 24 months after the occurrence of a Change in Control.
     
     2.   DEFINITIONS.
          
          2.1. ACCRUED COMPENSATION.  For purposes of this Agreement, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including 

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(i) base salary, (ii) reimbursement for reasonable and necessary expenses 
incurred by the Executive on behalf of the Company during the period ending 
on the Termination Date, (iii) vacation and sick leave pay (to the extent 
provided by Company policy or applicable law) and (iv) bonuses and incentive 
compensation (other than the "Pro Rata Bonus" (as hereinafter defined)).
          
          2.2. BASE AMOUNT.  For purposes of this Agreement, "Base Amount" 
shall mean the greater of (a) the Executive's annual base salary, plus any 
auto allowance, at the rate in effect immediately prior to the Change in 
Control and (b) the Executive's annual base salary, plus any auto allowance, 
at the rate in effect on the Termination Date, and shall include all amounts 
of his base salary that are deferred under any other agreement or arrangement 
with the Company.
          
          2.3. BONUS AMOUNT.  For purposes of this Agreement, "Bonus Amount" 
shall mean the Executive's annual bonus for the fiscal year prior to which a 
Change in Control has occurred.
          
          2.4. CAUSE.
          
          (a)  For purposes of this Agreement, except as set forth in Section 
2.4(b) below, a termination of employment is for "Cause" if the Executive has 
been convicted of a felony involving moral turpitude or the termination is 
evidenced by a resolution adopted in good faith by two-thirds of the Board 
that the Executive (i) intentionally and continually failed substantially to 
perform his reasonably assigned duties with the Company (other than a failure 
resulting from the Executive's incapacity due to physical or mental illness 
or from the Executive's assignment of duties that would constitute "Good 
Reason" as hereinafter defined) which failure continued for a period of at 
least thirty (30) days after a written notice of demand for substantial 
performance has been delivered to the Executive specifying the manner in 
which the Executive has failed substantially to perform or (ii) intentionally 
engaged in conduct which is demonstrably and materially injurious to the 
Company; PROVIDED, HOWEVER, that no termination of the Executive's employment 
shall be for Cause as set forth in clause (ii) above until (x) there shall 
have been delivered to the Executive a copy of a written notice setting forth 
that the Executive was guilty of the conduct set forth in clause (ii) and 
specifying the particulars thereof in detail and (y) the Executive shall have 
been provided an opportunity to be heard in person by the Board (with the 
assistance of the Executive's counsel if the Executive so desires).  Neither 
an act nor a failure to act, on the Executive's part shall be considered 
"intentional" unless the Executive has acted or failed to act with a lack of 
good faith and with a lack of reasonable belief that the Executive's action 
or failure to act was in the best interest of the Company.  Notwithstanding 
anything contained in this Agreement to the contrary, no failure to perform 
by the Executive after a Notice of Termination is given by the Executive 
shall constitute Cause for purposes of this Agreement.
          
          (b)  In the event an employment agreement is in place between the 
Executive and the Company, the definition of "Cause" set forth in such 
employment agreement shall apply for purposes of this Agreement.

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          2.5. CHANGE IN CONTROL.  For purposes of this Agreement, a "Change 
in Control" shall mean any of the following events:
               
               (a)  An acquisition (other than directly from the Company) of
          any voting securities of the Company (the "Voting Securities") by any
          "Person" (as the term person is used for purposes of Section 13(d) or
          14(d) of the Securities Exchange Act of 1934, as amended (the "1934
          Act")), immediately after which such Person has "Beneficial
          Ownership" (within the meaning of Rule 13d-3 promulgated under the
          1934 Act) of twenty percent (20%) or more of the combined voting
          power of the Company's then outstanding Voting Securities; PROVIDED,
          HOWEVER, that in determining whether a Change in Control has
          occurred, Voting Securities which are acquired in a "Non-Control
          Acquisition" (as hereinafter defined) shall not constitute an
          acquisition which would cause a Change in Control.  A "Non-Control
          Acquisition" shall mean an acquisition by (ii) an employee benefit
          plan (or a trust forming a part thereof) maintained by (x) the
          Company or (y) any corporation or other Person of which a majority of
          its voting power or its equity securities or equity interest is owned
          directly or indirectly by the Company (a "Subsidiary"), (ii) the
          Company or any Subsidiary or (iii) any Person in connection with a
          "Non-Control Transaction" (as hereinafter defined).
               
               (b)  The individuals who, as of the date hereof, are members of
          the Board (the "Incumbent Board"), cease for any reason to constitute
          at least a majority of the Board; PROVIDED, HOWEVER, that if the
          election, or nomination for election by the Company's stockholders,
          of any new director was approved by a vote of at least two-thirds
          (2/3) of the then Incumbent Board, such new director shall, for
          purposes of this Agreement, be considered as a member of the
          Incumbent Board; PROVIDED, FURTHER, HOWEVER, that no individual shall
          be considered a member of the Incumbent Board if such individual
          initially assumed office as a result of either an actual or
          threatened "Election Contest" (as described in Rule 14a-11
          promulgated under the 1934 Act) or other actual or threatened
          solicitation of proxies or consents by or on behalf of a Person other
          than the Board (a "Proxy Contest") including by reason of any
          agreement intended to avoid or settle any Election Contest or Proxy
          Contest; or
               
               (c)  Approval by stockholders of the Company of:
                    
                    (i)  A merger, consolidation or reorganization involving
               the Company, unless:
                         
                         (A)  the stockholders of the Company, immediately
                    before such merger, consolidation or reorganization, own,
                    directly or indirectly, immediately following such merger,
                    consolidation or reorganization, at least fifty percent
                    (50%) of the combined voting power of the outstanding
                    Voting Securities of the corporation 

                                       3

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                    resulting from such merger or consolidation or 
                    reorganization (the "Surviving Corporation") in 
                    substantially the same proportion as their ownership of the 
                    Voting Securities immediately before such merger, 
                    consolidation or reorganization;
                         
                         (B)  the individuals who were members of the Incumbent
                    Board immediately prior to the execution of the agreement
                    providing for such merger, consolidation or reorganization
                    constitute at least a majority of the members of the board
                    of directors of the Surviving Corporation or a corporation
                    beneficially owning, directly or indirectly, a majority of
                    the Voting Securities of the Surviving Corporation;
                         
                         (C)  no Person (other than the Company, any
                    Subsidiary, any employee benefit plan (or any trust forming
                    a part thereof) maintained by the Company, the Surviving
                    Corporation or any Subsidiary, or any Person who,
                    immediately prior to such merger, consolidation or
                    reorganization had Beneficial Ownership of fifteen percent
                    (15%) or more of the then outstanding Voting Securities)
                    owns, directly or indirectly, fifteen percent (15%) or more
                    of the combined voting power of the Surviving Corporation's
                    then outstanding voting securities; and
                         
                         (D)  a transaction described in clauses (A) through
                    (C) shall herein be referred to as a "Non-Control
                    Transaction;"
                    
                    (ii) A complete liquidation or dissolution of the Company;
               or
                    
                    (iii) An agreement for the sale or other disposition of all 
               or substantially all of the assets of the Company to any Person 
               (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to 
occur solely because any Person (the "Subject Person") acquired Beneficial 
Ownership of more than the permitted amount of the outstanding Voting 
Securities as a result of the acquisition of Voting Securities by the Company 
which, by reducing the number of Voting Securities outstanding, increases the 
proportional number of shares Beneficially Owned by the Subject Person, 
provided that if a Change in Control would occur (but for the operation of 
this sentence) as a result of the acquisition of Voting Securities by the 
Company, and after such share acquisition by the Company, the Subject Person 
becomes the Beneficial Owner of any additional Voting Securities which 
increases the percentage of the then outstanding Voting Securities 
Beneficially Owned by the Subject Person, then a Change in Control shall 
occur.
               
               (d)  Notwithstanding anything contained in this Agreement to the
          contrary, if the Executive's employment is terminated prior to a
          Change in Control and the Executive reasonably demonstrates that such
          termination (i) was at the 

                                       4

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          request of a third party who has indicated an intention or taken steps
          reasonably calculated to effect a Change in Control and who 
          effectuates a Change in Control (a "Third Party") or (ii) otherwise 
          occurred in connection with, or in anticipation of, a Change in 
          Control which actually occurs, then for all purposes of this 
          Agreement, the date of a Change in Control with respect to the 
          Executive shall mean the date immediately prior to the date of such
          termination of the Executive's employment.
          
          2.6. COMPANY.  For purposes of this Agreement, the "Company" shall
include the Company's "Successors and Assigns" (as hereinafter defined).
          
          2.7. DISABILITY.
          
          (a)  For purposes of this Agreement, except as set forth in Section 
2.7(b) below, "Disability" shall mean a physical or mental infirmity which 
impairs the Executive's ability to substantially perform his duties with the 
Company for a period of one hundred eighty consecutive days and the Executive 
has not returned to his full time employment prior to the Termination Date as 
stated in the "Notice of Termination" (as hereinafter defined).
          
          (b)  In the event an employment agreement is in place between the
Executive and the Company, the definition of "Disability" set forth in such
employment agreement shall apply for purposes of this Agreement.
          
          2.8. GOOD REASON.
          
          (a) For purposes of this Agreement, "Good Reason" shall mean the
occurrence after a Change in Control of any of the events or conditions
described in subsections (i) through (viii) hereof:
                    
                    (i)  a change in the Executive's status, position or
               responsibilities (including reporting responsibilities) which,
               in the Executive's reasonable judgment, represents a substantial
               adverse change from his status, position or responsibilities as
               in effect at any time within ninety (90) days preceding the date
               of a Change in Control or at any time thereafter; the assignment
               to the Executive of any duties or responsibilities which, in the
               Executive's reasonable judgment, are inconsistent with his
               status, title, position or responsibilities as in effect at any
               time within ninety days preceding the date of a Change in
               Control or at any time thereafter; or any removal of the
               Executive from or failure to reappoint or reelect him to any of
               such offices or positions held prior to the Change of Control,
               except in connection with the termination of his employment for
               Disability, Cause, as a result of his death or by the Executive
               other than for Good Reason;
                    
                                       5

<PAGE>

                    (ii) a reduction in the Executive's base salary or any
               failure to pay the Executive any compensation or benefits to
               which he is entitled within five days of notice thereof;
                    
                    (iii) the Company's requiring the Executive to be based at 
               any place outside a 30-mile radius from Scottsdale, Arizona,
               except for reasonably required travel on the Company's business
               which is not materially greater than such travel requirements
               prior to the Change in Control;
                    
                    (iv) the failure by the Company to provide the Executive
               with compensation and benefits, in the aggregate, at least equal
               (in terms of benefit levels and/or reward opportunities) to
               those provided for under each other employee benefit plan,
               program and practice in which the Executive was participating at
               any time within ninety (90) days preceding the date of a Change
               in Control or at any time thereafter;
                    
                    (v) the insolvency or the filing (by any party, including
               the Company) of a petition for bankruptcy of the Company, which
               petition is not dismissed within sixty (60) days;
                    
                    (vi) any material breach by the Company of any provision of
               this Agreement;
                    
                    (vii) any purported termination of the Executive's
               employment for Cause by the Company which does not comply with
               the terms of Section 2.4; or
                    
                    (viii) the failure of the Company to obtain an agreement, 
               satisfactory to the Executive, from any Successors and Assigns to
               assume and agree to perform this Agreement, as contemplated in 
               Section 7 hereof.
               
               (b)  Any event or condition described in Section 2.8(a)(i) 
          through (viii) which occurs prior to a Change in Control but which the
          Executive reasonably demonstrates (i) was at the request of a Third 
          Party or (ii) otherwise arose in connection with, or in anticipation 
          of, a Change in Control which actually occurs, shall constitute Good 
          Reason for purposes of this Agreement notwithstanding that it occurred
          prior to the Change in Control.
               
               (c)  The Executive's right to terminate his employment pursuant
          to this Section 2.8 shall not be affected by his incapacity due to a
          Disability.
          
          2.9. NOTICE OF TERMINATION.  For purposes of this Agreement,
following a Change in Control, "Notice of Termination" shall mean a written
notice of termination from the Company of the Executive's employment which
indicates the specific termination provision in this Agreement relied upon and
which sets forth in reasonable detail the facts and circumstances 

                                       6

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claimed to provide a basis for termination of the Executive's employment 
under the provision so indicated.
          
          2.10. PRO RATA BONUS.  For purposes of this Agreement, "Pro Rata 
Bonus" shall mean an amount equal to the Bonus Amount multiplied by a 
fraction, the numerator of which is the number of days in the Company's 
fiscal year in which the Executive's employment terminates through the 
Termination Date and the denominator of which is 365.
          
          2.11. SUCCESSORS AND ASSIGNS.  For purposes of this Agreement, 
"Successors and Assigns" shall mean a corporation or other entity acquiring 
all or substantially all the assets and business of the Company whether by 
operation of law or otherwise, and any affiliate of such Successors and 
Assigns.
          
          2.12. TERMINATION DATE.  For purposes of this Agreement, 
"Termination Date" shall mean (a) in the case of the Executive's death, his 
date of death, (b) in the case of Good Reason, the last day of his employment 
and (c) in all other cases, the date specified in the Notice of Termination; 
PROVIDED, HOWEVER, that if the Executive's employment is terminated by the 
Company due to Disability, the date specified in the Notice of Termination 
shall be the 30th day after receipt of the Notice of Termination by the 
Executive, provided that the Executive shall not have returned to the 
full-time performance of his duties within 30 days after such receipt.
     
     3.   TERMINATION OF EMPLOYMENT.  If, during the term of this Agreement, 
the Executive's employment with the Company shall be terminated within 
twenty-four months (24) following a Change in Control, the Executive shall be 
entitled to the following compensation and benefits:
          
          (a)  If the Executive's employment with the Company shall be
     terminated (i) by the Company for Cause or Disability, (ii) by reason of
     the Executive's death or (iii) by the Executive other than for Good
     Reason, the Company shall pay to the Executive the Accrued Compensation
     and, if such termination is other than by the Company for Cause, the Pro
     Rata Bonus; PROVIDED, HOWEVER, if an employment agreement is in existence
     between the Company and/or any of its affiliates and the Executive on the
     Termination Date, the Company and/or its affiliates, as the case may be,
     shall pay to the Executive any amounts owed to the Executive pursuant to
     such employment agreement.
          
          (b)  If the Executive's employment with the Company shall be
     terminated for any reason other than as specified in Section 3(a), the
     Executive shall be entitled to the following:
               
               (i)  the Company shall pay the Executive all Accrued
          Compensation and a Pro-Rata Bonus;
               
               (ii) the Company shall pay the Executive as severance pay and in
          lieu of any further compensation for periods subsequent to the
          Termination Date, in a 

                                       7

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          single payment an amount in cash equal to two times the sum of (A) the
          Base Amount and (B) the Bonus Amount;
               
               (iii) for a number of months equal to 24 (the "Continuation
          Period"), the Company shall at its expense continue on behalf of the
          Executive and his dependents and beneficiaries the medical, dental
          and hospitalization benefits provided (A) to the Executive at any
          time during the 90-day period prior to the Change in Control or at
          any time thereafter or (B) to other similarly situated executives who
          continue in the employ of the Company during the Continuation Period.
          The coverage and benefits (including deductibles and costs) provided
          in this Section 3(b)(iii) during the Continuation Period shall be no
          less favorable to the Executive and his dependents and beneficiaries,
          than the most favorable of such coverages and benefits during any of
          the periods referred to in clauses (A) and (B) above.  The Company's
          obligation hereunder with respect to the foregoing benefits shall be
          limited to the extent that the Executive obtains any such benefits
          pursuant to a subsequent employer's benefit plans, in which case the
          Company may reduce the coverage of any benefits it is required to
          provide the Executive hereunder as long as the aggregate coverages
          and benefits of the combined benefit plans is no less favorable to
          the Executive than the coverages and benefits required to be provided
          hereunder.  This subsection (iii) shall not be interpreted so as to
          limit any benefits to which the Executive, his dependents or
          beneficiaries may be entitled under any of the Company's employee
          benefit plans, programs or practices following the Executive's
          termination of employment, including without limitation, retiree
          medical and life insurance benefits;
               
               (iv) all theretofore unvested stock options, restricted options,
          restricted stock and other awards issued to the Executive pursuant to
          the Company's Stock Incentive Plan shall immediately vest; and
               
               (v)  all theretofore unvested employer contributions in the
          Executive's account pursuant to the Company's 401(k) plan shall
          immediately vest.
          
          (c)  The amounts provided for in Sections 3(a) and 3(b)(i) and (ii)
     shall be paid in a single lump sum cash payment within five (5) days after
     the Executive's Termination Date (or earlier, if required by applicable
     law).
          
          (d)  The Executive shall not be required to mitigate the amount of
     any payment provided for in this Agreement by seeking other employment or
     otherwise and no such payment shall be offset or reduced by the amount of
     any compensation or benefits provided to the Executive in any subsequent
     employment except as provided in Section 3(b)(iii).
          
          (e)  The severance pay and benefits provided for in this Section 3
     shall be reduced by the amount of any other severance or termination pay
     to which the Executive may be entitled under any agreement with the
     Company or any of its affiliates.
          
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          (f)  The Executive's entitlement to any other compensation or
     benefits or any indemnification shall be determined in accordance with the
     Company's employee benefit plans and other applicable programs, policies
     and practices or any indemnification agreement then in effect.
     
     4.   NOTICE OF TERMINATION.  Following a Change in Control, any 
purported termination of the Executive's employment by the Company shall be 
communicated by Notice of Termination to the Executive.  For purposes of this 
Agreement, no such purported termination shall be effective without such 
Notice of Termination.
     
     5.   EXCISE TAX GROSS-UP.
          
          (a)  Notwithstanding anything contained in this Agreement to the
     contrary, in the event it is determined (pursuant to (b) below) or finally
     determined (as defined in (c)(iii) below) that any payment, distribution,
     transfer, benefit or other event with respect to the Company or its
     predecessors, successors, direct or indirect subsidiaries or affiliates
     (or any predecessor, successor of affiliate of any of them, and including
     any benefit plan of any of them), to or for the benefit of Executive or
     Executive's dependents, heirs or beneficiaries (whether such payment,
     distribution, transfer, benefit or other event occurs pursuant to the
     terms of this Agreement or otherwise, but determined without regard to any
     additional payments required under this Section 5) (each a "Payment" and
     collectively the "Payments") is or was subject to the excise tax imposed
     by Section 4999 of the Internal Revenue Code of 1986, as amended, and any
     successor provision or any comparable provision of state or local income
     tax law (collectively, "Section 4999"), or any interest, penalty or
     addition to tax is or was incurred by Executive with respect to such
     excise tax (such excise tax, together with any such interest, penalty or
     addition to tax, hereinafter collectively referred to as the
     "Excise Tax"), then, within 10 days after such determination or final
     determination, as the case may be, the Company shall pay to Executive an
     additional cash payment (hereinafter referred to as the "Gross-Up
     Payment") in an amount such that after payment by Executive of all taxes,
     interest, penalties and additions to tax imposed with respect to the Gross-
     Up Payment (including, without limitation, any income and excise taxes
     imposed upon the Gross-Up Payment), Executive retains an amount of the
     Gross-Up Payment equal to the Excise Tax imposed upon such Payment or
     Payments.  This provision is intended to put Executive in the same
     position as Executive would have been had no Excise Tax been imposed upon
     or incurred as a result of any Payment.
          
          (b)  Except as provided in subsection (c) below, the determination
     that a Payment is subject to an Excise Tax shall be made in writing by a
     certified public accounting firm selected by Executive ("Executive's
     Accountant").  Such determination shall include the amount of the Gross-Up
     Payment and detailed computations thereof, including any assumptions used
     in such computations (the written determination of the Executive's
     Accountant, hereinafter, the "Executive's Determination").  The
     Executive's Determination shall be reviewed on behalf of the Company by a
     certified public accounting firm selected by the Company (the "Company's
     Accountant").  The Company 

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     shall notify Executive within 10 business days after receipt of the 
     Executive's Determination of any disagreement or dispute therewith, and 
     failure to so notify within that period shall be considered an agreement by
     the Company with the Executive's Determination, obligating the Company to 
     make payment as provided in subsection (a) above within 10 days from the 
     expiration of such 10 business-day period.  In the event of an objection by
     the Company to the Executive's Determination, any amount not in dispute 
     shall be paid within 10 days following the 10 business-day period referred 
     to herein, and with respect to the amount in dispute the Executive's 
     Accountant and the Company's Accountant shall jointly select a third 
     nationally recognized certified public accounting firm to resolve the 
     dispute and the decision of such third firm shall be final, binding and 
     conclusive upon the Executive and the Company.  In such a case, the third 
     accounting firm's findings shall be deemed the binding determination with 
     respect to the amount in dispute, obligating the Company to make any 
     payment as a result thereof within 10 days following the receipt of such 
     third accounting firm's determination.  All fees and expenses of each of
     the accounting firms referred to in this Section 5 shall be borne solely by
     the Company.
          
          (c)  (i)  Executive shall notify the Company in writing of any claim
     by the Internal Revenue Service (or any successor thereof) or any state or
     local taxing authority (individually or collectively, the "Taxing
     Authority") that, if successful, would require the payment by the Company
     of a Gross-Up Payment.  Such notification shall be given as soon as
     practicable but no later than 30 days after Executive receives written
     notice of such claim and shall apprise the Company of the nature of such
     claim and the date on which such claim is requested to be paid; provided,
     however, that failure by Executive to give such notice within such 30-day
     period shall not result in a waiver or forfeiture of any of Executive's
     rights under this Section 5 except to the extent of actual damages
     suffered by the Company as a result of such failure.  Executive shall not
     pay such claim prior to the expiration of the 15-day period following the
     date on which Executive gives such notice to the Company (or such shorter
     period ending on the date that any payment of taxes, interest, penalties
     or additions to tax with respect to such claim is due).  If the Company
     notifies Executive in writing prior to the expiration of such 15-day
     period that it desires to contest such claim (and demonstrates to the
     reasonable satisfaction of Executive its ability to make the payments to
     Executive which may ultimately be required under this section before
     assuming responsibility for the claim), Executive shall:
               
               (A)  give the Company any information reasonably requested by
          the Company relating to such claim;
               
               (B)  take such action in connection with contesting such claim
          as the Company shall reasonably request in writing from time to time,
          including, without limitation, accepting legal representation with
          respect to such claim by an attorney selected by the Company that is
          reasonably acceptable to Executive;
               
               (C)  cooperate with the Company in good faith in order
          effectively to contest such claim; and

                                      10

<PAGE>
               
               (D)  permit the Company to participate in any proceedings
          relating to such claim; provided, however, that the Company shall
          bear and pay directly all attorneys fees, costs and expenses
          (including additional interest, penalties and additions to tax)
          incurred in connection with such contest and shall indemnify and hold
          Executive harmless, on an after-tax basis, for all taxes (including,
          without limitation, income and excise taxes), interest, penalties and
          additions to tax imposed in relation to such claim and in relation to
          the payment of such costs and expenses or indemnification.  Without
          limitation on the foregoing provisions of this Section 5, and to the
          extent its actions do not unreasonably interfere with or prejudice
          Executive's disputes with the Taxing Authority as to other issues,
          the Company shall control all proceedings taken in connection with
          such contest and, at its sole option, may pursue or forego any and
          all administrative appeals, proceedings, hearings and conferences
          with the taxing authority in respect of such claim and may, at its
          sole option, either direct Executive to pay the tax, interest or
          penalties claimed and sue for a refund or contest the claim in any
          permissible manner, and Executive agrees to prosecute such contest to
          a determination before any administrative tribunal, in a court of
          initial jurisdiction and in one or more appellate courts, as the
          Company shall determine; provided, however, that if the Company
          directs Executive to pay such claim and sue for a refund, the Company
          shall advance an amount equal to such payment to Executive, on an
          interest-free basis, and shall indemnify and hold Executive harmless,
          on an after-tax basis, from all taxes (including, without limitation,
          income and excise taxes), interest, penalties and additions to tax
          imposed with respect to such advance or with respect to any imputed
          income with respect to such advance; and, further, provided, that any
          extension of the statute of limitations relating to payment of taxes,
          interest, penalties or additions to tax for the taxable year of
          Executive with respect to which such contested amount is claimed to
          be due is limited solely to such contested amount; and, provided,
          further, that any settlement of any claim shall be reasonably
          acceptable to Executive and the Company's control of the contest
          shall be limited to issues with respect to which a Gross-Up Payment
          would be payable hereunder, and Executive shall be entitled to settle
          or contest, as the case may be, any other issue.
          
          (ii) If, after receipt by Executive of an amount advanced by the
     Company pursuant to Section 5(c)(i), Executive receives any refund with
     respect to such claim, Executive shall (subject to the Company's complying
     with the requirements of Section 5) promptly pay to the Company an amount
     equal to such refund (together with any interest paid or credited thereon
     after taxes applicable thereto), net of any taxes (including without
     limitation any income or excise taxes), interest, penalties or additions
     to tax and any other costs incurred by Executive in connection with such
     advance, after giving effect to such repayment.  If, after the receipt by
     Executive of an amount advanced by the Company pursuant to Section
     5(c)(i), it is finally determined that Executive is not entitled to any
     refund with respect to such claim, then such advance shall be forgiven and
     shall not be required to be repaid and the amount of such advance shall be
     treated as a Gross-

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<PAGE>

     Up Payment and shall offset, to the extent thereof, the amount of any 
     Gross-Up Payment otherwise required to be paid.
          
          (iii) For purposes of this Section 5, whether the Excise Tax is
     applicable to a Payment shall be deemed to be "finally determined" upon
     the earliest of: (A) the expiration of the 15-day period referred to in
     paragraph (c)(i) above if the Company has not notified Executive that it
     intends to contest the underlying claim, (B) the expiration of any period
     following which no right of appeal exists, (C) the date upon which a
     closing agreement or similar agreement with respect to the claim is
     executed by Executive and the Taxing Authority (which agreement may be
     executed only in compliance with this Section 5), (D) the receipt by
     Executive of notice from the Company that it no longer seeks to pursue a
     contest (which notice shall be deemed received if the Company does not,
     within 15 days following receipt of a written inquiry from Executive,
     affirmatively indicate in writing to Executive that the Company intends to
     continue to pursue such contest).
          
          (d)  As a result of uncertainty in the application of Section 4999
     that may exist at the time of any determination that a Gross-Up Payment is
     due, it may be possible that in making the calculations required to be
     made hereunder, the parties or their accountants shall determine that a
     Gross-Up Payment need not be made (or shall make no determination with
     respect to a Gross-Up Payment) that properly should be made
     ("Underpayment"), or that a Gross-Up Payment not properly needed to be
     made should be made ("Overpayment").  The determination of any
     Underpayment shall be made using the procedures set forth in paragraph (b)
     above and shall be paid to Executive as an additional Gross-Up Payment.
     The Company shall be entitled to use procedures similar to those available
     to Executive in paragraph (b) to determine the amount of any Overpayment
     (provided that the Company shall bear all costs of the accountants as
     provided paragraph (b)) .  In the event of a determination that an
     Overpayment was made, any such Overpayment shall be treated for all
     purposes as a loan to Executive with interest at the applicable Federal
     rate provided for in Section 1274(d) of the Code; provided, however, that
     the amount to be repaid by Executive to the Company shall be subject to
     reduction to the extent necessary to put Executive in the same after-tax
     position as if such Overpayment were never made.
          
          6.   SUCCESSORS; BINDING AGREEMENT.  This Agreement shall be 
binding upon and shall inure to the benefit of the Company, its Successors 
and Assigns, and the Company shall require any Successors and Assigns to 
expressly assume and agree to perform this Agreement in the same manner and 
to the same extent that the Company would be required to perform it if no 
such succession or assignment had taken place.  Neither this Agreement nor 
any right or interest hereunder shall be assignable or transferable by the 
Executive, his beneficiaries or legal representatives, except by will or by 
the laws of descent and distribution.  This Agreement shall inure to the 
benefit of and be enforceable by the Executive's legal personal 
representative.
     
     7.   FEES AND EXPENSES.  The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Executive as they become 

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<PAGE>

due as a result of (a) the Executive seeking to obtain or enforce any right 
or benefit provided by this Agreement (including, but not limited to, any 
such fees and expenses incurred in connection with the Dispute and (b) the 
Executive's hearing before the Board as contemplated in Section 2.4 of this 
Agreement; PROVIDED, HOWEVER, that the circumstances set forth in clause (a) 
(other than as a result of the Executive's termination of employment under 
circumstances described in Section 2.5(d)) occurred on or after a Change in 
Control.
     
     8.   NOTICE.  For the purposes of this Agreement, notices and all other 
communications provided for in the Agreement (including the Notice of 
Termination) shall be in writing and shall be deemed to have been duly given 
when personally delivered or sent by certified mail, return receipt 
requested, postage prepaid, by overnight courier or by facsimile, addressed 
to the respective addresses and facsimile numbers last given by each party to 
the other, provided that all notices to the Company shall be directed to the 
attention of the Board with a copy to the Secretary of the Company.  All 
notices and communications shall be deemed to have been received on the date 
of delivery thereof or on the third business day after the mailing thereof, 
except that notice of change of address shall be effective only upon receipt.
     
     9.   NON-EXCLUSIVITY OF RIGHTS.  Nothing in this Agreement shall prevent 
or limit the Executive's continuing or future participation in any benefit, 
bonus, incentive or other plan or program provided by the Company (except for 
any severance or termination policies, plans, programs or practices) and for 
which the Executive may qualify, nor shall anything herein limit or reduce 
such rights as the Executive may have under any other agreements with the 
Company (except for any severance or termination agreement).  Amounts which 
are vested benefits or which the Executive is otherwise entitled to receive 
under any plan or program of the Company shall be payable in accordance with 
such plan or program, except as explicitly modified by this Agreement.
     
     10.  NO GUARANTEED EMPLOYMENT.  The Executive and the Company 
acknowledge that, except as may otherwise be provided under any other written 
agreement between the Executive and the Company, the employment of the 
Executive by the Company is "at will" and may be terminated by either the 
Executive or the Company at any time.
     
     11.  SETTLEMENT OF CLAIMS.  The Company's obligation to make the 
payments provided for in this Agreement and otherwise to perform its 
obligations hereunder shall not be affected by any circumstances, including, 
without limitation, any set-off, counterclaim, recoupment, defense or other 
right which the Company may have against the Executive or others.
     
     12.  MUTUAL NON-DISPARAGEMENT.  The Company, its affiliates and 
subsidiaries agree and the Company shall use its best efforts to cause their 
respective executive officers and directors to agree, that they will not make 
or publish any statement critical of the Executive, or in any way adversely 
affecting or otherwise maligning the Executive's reputation.  The Executive 
agrees that he will not make or publish any statement critical of the 
Company, its affiliates and their respective executive officers and 
directors, or in any way adversely affecting or otherwise maligning the 
business or reputation of any member of the Company, its affiliates and 
subsidiaries and their respective officers, directors and employees.
      
                                      13
   
<PAGE>

     13.  MISCELLANEOUS.  No provision of this Agreement may be modified, 
waived or discharged unless such waiver, modification or discharge is agreed 
to in writing and signed by the Executive and the Company.  No waiver by 
either party hereto at any time of any breach by the other party hereto of, 
or compliance with, any condition or provision of this Agreement to be 
performed by such other party shall be deemed a waiver of similar or 
dissimilar provisions or conditions at the same or at any prior or subsequent 
time.  No agreement or representations, oral or otherwise, express or 
implied, with respect to the subject matter hereof have been made by either 
party which are not expressly set forth in this Agreement.
     
     14.  GOVERNING LAW.  This Agreement shall be governed by and construed 
and enforced in accordance with the laws of the State of Arizona without 
giving effect to the conflict of laws principles thereof.  Any action brought 
by any party to this Agreement shall be brought and maintained in a court of 
competent jurisdiction in Maricopa County in the State of Arizona.
     
     15.  SEVERABILITY.  The provisions of this Agreement shall be deemed 
severable and the invalidity or unenforceability of any provision shall not 
affect the validity or enforceability of the other provisions hereof.
     
     16.  ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement 
between the parties hereto and supersedes all prior agreements, if any, 
understandings and arrangements, oral or written, between the parties hereto 
with respect to the subject matter hereof.
     
     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed 
by its duly authorized officer and the Executive has executed this Agreement 
as of the day and year first above written.
                              
                              
                              EVANS WITHYCOMBE RESIDENTIAL, INC.
                              
                              
                              By:/s/ Stephen O. Evans
                                 --------------------------------
                                 Name: STEPHEN O. EVANS
                                 Title: CHAIRMAN
                              
                              
                              By:/s/ S. Edward O'Clair
                                 --------------------------------
                                 Executive







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