Document:

SECURITY AGREEMENT
                               (Florida Property)

DEBTOR:                     ASSET INVESTORS OPERATING PARTNERSHIP, L.P., a
                            Delaware limited partnership
                            3410 South Galena Street, Suite 210
                            Denver, Colorado 80231

                            and

                            COMMUNITY  SAVANNA CLUB JOINT VENTURE,
                            a Delaware  general  partnership  3410
                            South Galena Street, Suite 210
                            Denver, Colorado 80231

SECURED PARTY:              U. S. BANK NATIONAL ASSOCIATION
                            918 17th Street, Fifth Floor
                            Denver, Colorado 80202

DATE:                       April 7, 2000

         1. Grant of Security Interest and Collateral Assignment.  As collateral
security for the due and punctual payment and performance of the Obligations (as
hereinafter  defined),  the Debtor hereby grants to the Secured Party, with full
power and  authority  to  exercise  all rights and powers  granted by the Debtor
hereunder,  a lien upon, and a security  interest  under the Uniform  Commercial
Code in effect in the State of Florida, as from time to time amended (the "UCC")
to the extent  that the same  shall  apply,  in and to, and hereby  collaterally
assigns to the Secured Party, all of the Collateral,  defined below,  located in
Port St.  Lucie,  St. Lucie  County,  Florida,  to be identified as the "Savanna
Club",   and  more   particularly   described  on  Exhibit  A,  attached  hereto
(collectively  the  "Real   Property").   Debtor's  personal  property  is  more
particularly   described  on  Exhibit  B,  attached  hereto   (collectively  the
"Collateral").  The Real Property, together with the Collateral are collectively
referred to herein as the "Property".

         2. Obligations Secured.  "Obligations" shall mean the loan evidenced by
the Revolving  Promissory Note dated the date hereof in the principal  amount of
$15,000,000.00  payable by Debtor, AIOP Lost Dutchman Notes, L.L.C.  ("AIOP") to
the order of Secured Party ("Note"),  including without  limitation,  any future
advances,  and any  and all  interest,  commissions,  obligations,  liabilities,
indebtedness,  charges,  and expenses now or hereafter chargeable against Debtor
by Secured  Party or owing by Debtor to Secured  Party in  connection  with such
loan, whether direct or indirect, joint or several, absolute or contingent,  due
or to become due, now existing or hereafter  arising,  and the  performance  and
fulfillment by Debtor of all of the terms, conditions,  promises, covenants, and

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provisions  contained  in this  Agreement  or in the Note or in any  present  or
future  agreement or instrument  between Debtor and Secured Party  evidencing or
securing  said Note,  including  the  Mortgage,  Security  Agreement,  Financing
Statement  and Absolute  Assignment  of Rents and  Revenues,  executed by Debtor
simultaneously  herewith  (the  "Mortgage")  and the Line of  Credit  Agreement,
executed by and between Debtor,  AIOP, AIOP Florida  Properties I, L.L.C.,  AIOP
Florida  Properties II, l.L.C.  and Bank (the "Line of Credit  Agreement").  Any
capitalized  terms used and not otherwise defined herein have the meanings given
them in the  Line of  Credit  Agreement.  Any  capitalized  terms  used  and not
otherwise  defined  herein or in the Line of Credit  Agreement,  shall  have the
meanings given to them in the UCC.

         3. Warranties and Covenants of the Debtor.

              (a) The Debtor has all power, statutory and otherwise,  to execute
and deliver this Agreement,  to perform its obligations hereunder and to subject
the Collateral to the security  interest  created hereby,  all of which has been
duly  authorized  by all  necessary  action.  The execution and delivery of this
Agreement,  and the  performance  of this  Agreement and the  enforcement of the
security  interest granted hereby,  will not result in any violation of or be in
conflict  with or  constitute  a  default  under  any term of any  agreement  or
instrument,  or,  to the best of the  knowledge  of the  Debtor,  any  judgment,
decree, order, law, statute, rule or governmental  regulation applicable to this
Debtor or the Collateral.

              (b) The  Debtor is the sole  record  and  beneficial  owner of the
Collateral,  and neither the Collateral nor the proceeds  thereof are subject to
any pledge,  lien, security interest,  charge or encumbrance except (i) the lien
created  pursuant  to this  Agreement,  and (ii)  the lien of the UCC  financing
statement delivered by the Debtor to the Secured Party with respect thereto. The
Debtor shall defend the Collateral against all claims and demands of all persons
at any time claiming any interest therein.

              (c) The  Collateral  shall be  located at the  Debtor's  places of
business shown above or at the Property.  Debtor shall not remove the Collateral
from either of said locations  without the prior written  consent of the Secured
Party  except as  contemplated  by  paragraph  3(g) below.  Debtor  shall notify
Secured Party of any change in its place of business prior to making the change.

              (d) Debtor  shall pay all taxes and  assessments  of every  nature
which may be levied or assessed against the Collateral.

              (e) The Debtor  shall  keep the  Collateral  at all times  insured
against risk of loss or damage by fire (including  so-called extended coverage),
theft and such other casualties as the Secured Party may reasonably require, all
in such amounts, under such forms of policies, upon such terms, for such periods
and written by such companies or  underwriters  as the Secured Party may approve
in its reasonable  discretion,  losses in all cases to be payable to the Secured
Party and the Debtor as their  interests  may appear.  All policies of insurance
shall  provide  for  at  least  fifteen  (15)  days'  prior  written  notice  of

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cancellation  to the Secured  Party;  and the Debtor  shall  furnish the Secured
Party with an  appropriate  renewal  policy  certified by Debtor as complete and
accurate to assure compliance with the provisions of this paragraph.

              (f) The  Collateral  is in good  condition.  At Debtor's  expense,
Debtor shall keep the same in good  condition,  ordinary wear and tear excepted,
and from time to time shall replace and repair all such parts of the  Collateral
as may be broken,  worn out, or damaged without  allowing any lien to be created
upon the  Collateral on account of such  replacement  or repairs,  and shall not
waste or destroy the  Collateral.  The Secured Party may examine and inspect the
Collateral at any time, wherever located.

              (g)  Debtor  shall not sell,  lease,  convey,  encumber  or in any
manner  transfer,  without  the prior  written  consent  of Secured  Party,  any
tangible  personal  property now or hereafter owned by Debtor and attached to or
contained in and used in  connection  with the operation of the mobile home park
known as the Savanna Club, or otherwise forming a part of the Collateral (except
such  tangible  personal  property as is discarded as obsolete or damaged and is
replaced by substitute items having equivalent or greater book value).

              (h)  Debtor  shall  not use the  Collateral  in  violation  of any
applicable statutes, regulations or ordinances.

              (i) The Debtor's operating agreement does not prohibit any term or
condition  of this  Agreement,  and when  executed,  this  Agreement  shall be a
binding obligation of the Debtor.

              (j) Debtor shall notify  Secured Party,  in writing,  prior to the
time Debtor changes its name, identity or limited partnership structure.

              (k)  The  Collateral  is  used  or  bought  primarily  for  use in
business.

              (l) Debtor shall: (i) collect its rents and income in the ordinary
course of business; and (ii) furnish Secured Party with financial information as
required by Section 5.1 of the Line of Credit Agreement.

              (m) After an Event of  Default  as  defined  in the Line of Credit
Agreement or the  appointment of a receiver as provided  therein,  Debtor agrees
that Secured Party shall have full power to notify tenants, collect, compromise,
endorse,  sell or otherwise deal with proceeds in its own name or that of Debtor
at any time.  Secured  Party may  apply  cash  proceeds  to the  payment  of any
Obligations, or may release such cash proceeds to Debtor.

         4.  Events  of  Default.  The  occurrence  of any  one or  more  of the
following events shall constitute an Event of Default under this Agreement:

              (a)  Default  in  the  payment  or  performance  of  any  monetary
obligation  contained  or referred  to herein or in the Note or in the  Mortgage
securing the same beyond any applicable grace period specified therein;

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              (b) Uninsured loss, theft,  damage, or destruction of any material
portion of the Collateral;  sale or encumbrance of any of the Collateral; or the
making of any levy, seizure or attachment thereof or thereon;

              (c)  Default in the due  performance  or  observance  of any term,
covenant or agreement on Debtor's  part to be performed or observed  pursuant to
any of the provisions of this  Agreement,  other than payment and performance of
any monetary  obligation,  and such non-monetary default shall continue beyond a
period of thirty (30) days after  written  notice of the  Default  being sent to
Debtor by Secured Party; or

              (d) The occurrence of an Event of Default under the Line of Credit
Agreement or the Mortgage, or under any other document securing the Note.

         5. Rights Upon an Event of Default.  Upon the occurrence of an Event of
Default and at any time  thereafter,  and whether or not the Secured Party shall
declare any or all of the  Obligations to be immediately  due and payable in the
manner and with the effect stated in the Mortgage, then and in such event:

              (a) The Secured  Party may foreclose  upon and take  possession of
the Collateral and may exclude the Debtor,  and all persons claiming by, through
or under the Debtor, from possession thereof, and may assign the Collateral to a
nominee or a third party. In connection  herewith the Secured Party or any third
party assignee or nominee of the Secured Party shall have the right to exercise,
in the name of the Debtor,  the  Debtor's  rights and powers with respect to the
Collateral.

              (b) The  Secured  Party  shall have all rights and  remedies  of a
secured  party  available  under  the UCC  and any  other  rights  and  remedies
available  under this  Agreement and under the Mortgage and any other  documents
securing the Note or at law or in equity.

              (c) The  Debtor  hereby  agrees  that if  notice  of sale or other
disposition  of the  Collateral  is given in the  manner  and to the  address or
addresses then required pursuant to the Mortgage at least five (5) business days
before the time of the sale or other  disposition,  such notice  shall be deemed
reasonable  and shall  fully  satisfy  any  requirement  for the  giving of said
notice,  whether  required by the UCC, any other law or  otherwise.  Any sale or
disposition may occur by private  proceedings at Secured Party's  election,  and
Debtor  acknowledges that, due to the nature of the Collateral and its essential
relationship to the operation of the facility, Secured Party may buy at any such
private sale.

              (d) Secured  Party shall have the right,  power and  authority  to
sell the Collateral or any part thereof at public or private sale for cash, upon
credit, or for future delivery, and at such price or prices as Secured Party may
deem  best,  and  Secured  Party  may be the  purchaser  of any  and  all of the
Collateral  so sold,  in such manner and order as Secured  Party may in its sole
discretion  elect.  Upon any such sale,  Secured  Party  shall have the right to
deliver,  assign and transfer to the purchaser  thereof the  Collateral so sold.
Any such  public  sale  shall be held at such  time or  times,  within  ordinary

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business  hours,  and at such place or places,  as Secured  Party may fix in the
notice of such  sale.  At any sale the  Collateral  may be sold in one lot as an
entirety or in separate  parcels as Secured Party may  determine.  Secured Party
shall not be  obligated to make any sale  pursuant to any such  notice.  Secured
Party may, without notice or publication,  adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at any time and
place  fixed  for the  sale,  and such  sale may be made at any time or place to
which  the same may be so  adjourned.  In case of any sale of all or any part of
the Collateral on credit or for future  delivery,  the Collateral so sold may be
retained  by Secured  Party  until the  selling  price is paid by the  purchaser
thereof,  but Secured  Party shall incur no  liability in case of the failure of
such purchaser to take up and pay for the Collateral so sold, and in case of any
such failure, such Collateral may again be sold upon like notice. Each and every
method of disposition  described in this paragraph shall constitute  disposition
in a commercially reasonable manner.

              (e) In conjunction  therewith,  in addition to or in  substitution
for those rights and remedies and the rights and remedies provided for herein:

                 (i) It shall not be necessary  that the  Collateral or any part
thereof be present at the location of such sale.

                 (ii) The sale by  Secured  Party of less  than the whole of the
Collateral  shall not  exhaust  the rights of Secured  Party  hereunder  or with
respect to the Collateral,  and Secured Party is specifically  empowered to make
successive sale or sales  hereunder  until the whole of the Collateral  shall be
sold; and, if the proceeds of such sale of less than the whole of the Collateral
shall be less  than the  aggregate  of the  indebtedness  secured  hereby,  this
Agreement and the security  interest  created  hereby shall remain in full force
and effect as to the unsold portion of the Collateral just as though no sale had
been made.

                 (iii) In the event any sale  hereunder  is not  completed or is
defective  in the  opinion of Secured  Party,  such sale shall not  exhaust  the
rights of Secured  Party  hereunder  and  Secured  Party shall have the right to
cause a subsequent sale or sales to be made hereunder.

                 (iv) Any and all  statements of fact or other  recitals made in
any bill of sale or assignment or other instrument evidencing any sale hereunder
as to nonpayment of the indebtedness or as to the occurrence of a Default, or as
to Secured Party having declared all of such indebtedness to be due and payable,
or as to notice of time,  place and terms of sale and the  properties to be sold
having  been duly given,  as to any other act or thing  having been duly done by
Secured  Party shall be taken as prima facie  evidence of the truth of the facts
so stated and recited.

                 (v)  Secured  Party may  appoint  or  delegate  any one or more
persons as agent to perform  any act or acts  necessary  or incident to any such
sale held by Secured Party,  including the sending of notices and the conduct of
sale, but in the name and on behalf of Secured Party.

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<PAGE>

              (f) The proceeds of any sale or other disposition or collection of
or other  realization upon all or any part of the Collateral shall be applied in
the  following  order of  priority:  first,  to pay the  costs and  expenses  of
collection,  custody, sale or other disposition or delivery (including,  without
limitation, reasonable legal costs and reasonable attorneys' fees) and all other
charges incurred by the Secured Party with respect to the Collateral; second, to
the payment of the  Obligations  in such order as the Secured  Party may, in its
sole  discretion,  determine;  and third, to pay any surplus to the Debtor or to
any  person  or party  lawfully  entitled  thereto,  or as a court of  competent
jurisdiction may direct.

              (g)  Secured  Party  may use or  operate  the  Collateral  for the
purpose of  preserving  it or its value.  Secured  Party may  require  Debtor to
assemble the  Collateral and make it available to Secured Party at a place to be
designated  by Secured  Party which is  reasonably  convenient  to both parties.
Expenses  of  retaking,  holding,  preparing  for  sale,  selling,  or costs and
expenses in enforcing this Agreement,  or the like shall include Secured Party's
reasonable  attorneys' fees and legal expenses,  and the same, together with all
advances  made by Secured  Party on behalf of the  Debtor,  shall be part of the
Obligations  secured  hereby.  Debtor  shall be liable to Secured  Party for any
deficiency.

         6.  Release  of  Collateral.  If the  Obligations  are  fully  paid and
discharged, all Collateral held hereunder shall be returned to the Debtor by the
Secured Party promptly upon demand, all requisite  termination  statements under
the UCC shall be executed and delivered to the Debtor by the Secured Party,  and
the Secured Party shall take such other action in connection with such discharge
as the Debtor may reasonably request.

         7. Further Agreements. The Debtor has previously executed and delivered
to the Secured  Party  financing  statements  pursuant to the UCC covering  that
portion of the  Collateral  for which a security  interest  may be  perfected by
filing.  The Debtor shall,  upon request of the Secured  Party,  promptly  make,
execute and deliver to the Secured  Party,  from time to time,  a listing of the
specific Collateral, including personal property, goods, equipment, furnishings,
furniture acquired and/or owned in connection with the hotel, and such other and
further  financing  statements,  instruments,  documents and  certificates,  and
perform such other and further  acts and  assurances,  as the Secured  Party may
request to perfect, to maintain the priority of, or from time to time, to renew,
such security  interests,  to confirm or more fully  perfect the rights  granted
hereby,  or in any way to assure the Secured Party all of its rights  hereunder.
The Debtor shall pay the costs of all filings and  recordings in public  offices
of record,  and shall,  upon  request of the Secured  Party,  make,  execute and
deliver  such other and  further  instruments,  and take such other and  further
actions,  as the Secured Party may deem necessary or appropriate to enable it to
realize upon the  Collateral,  to exercise  fully its rights  hereunder,  and to
ratify and confirm any sale hereunder.

         8.  Indemnification;  Waivers.  The  Debtor  shall  indemnify  and hold
harmless  the  Secured  Party  from any and all  liability  or damage  which the
Secured Party may incur in the exercise and  performance,  in good faith, of any
of its  powers  and  duties  specifically  set  forth  herein,  but  not for any
liability  or damage  incurred  on  account of the gross  negligence  or willful

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misconduct  of the Secured  Party;  provided,  however,  that  Debtor  shall not
indemnify  Secured Party from and against claims  asserted by third parties as a
consequence  of the  Secured  Party's  negligence  or  misconduct.  No  delay or
omission  on the part of the Secured  Party in  exercising  any right  hereunder
shall  operate as a waiver of such right or of any other  right  hereunder.  Any
waiver of any such right on any one occasion  shall not be construed as a bar to
or waiver of any such right on any such  future  occasion.  No course of dealing
between the Debtor and the Secured  Party nor any failure to  exercise,  nor any
delay in  exercising,  on the part of the  Secured  Party,  any right,  power or
privilege  hereunder or under any of the Obligations,  shall operate as a waiver
thereof;  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or in the exercise of any other right,  power or  privilege.  The Secured  party
shall be under no duty or liability with respect to the Collateral other than to
use reasonable care in the custody of any Collateral while in its possession and
shall not be liable for any failure to take action  necessary to preserve rights
against prior or other parties on any instrument constituting the Collateral.

         9. Further Transfers  Prohibited.  The Debtor covenants and agrees that
it  will  not,  at any  time  during  the  term  of this  Agreement,  except  as
contemplated by paragraph 3(g) hereof, further convey or encumber the Collateral
in any  manner  whatsoever;  and the  Debtor  agrees  that it will do all things
necessary to maintain  the  enforceability  and priority of the Secured  Party's
security interest in the Collateral.

         10.  Notices.  Any  and  all  notices,  demands,  consents,  and  other
communications  required  or  permitted  under  this  Agreement  shall be deemed
adequately  given only if given in the manner and to the  addresses  provided in
the Mortgage.

         11. General Provisions.

              (a) No waiver by Secured  Party of any default  shall operate as a
waiver of any other  default or of the same  default on a future  occasion.  The
taking of this Security  Agreement  shall not waive or impair any other security
said Secured  Party may have or  hereafter  acquire for the payment of the above
indebtedness,  nor shall the  taking of any such  additional  security  waive or
impair  this  Security  Agreement;  but said  Secured  Party  may  resort to any
security it may have in the order it may deem proper,  and  notwithstanding  any
collateral  security,  Secured  Party shall retain its rights of setoff  against
Debtor.

              (b) At its option,  but  without  obligation  to the  Debtor,  the
Secured  Party may  discharge  taxes,  liens,  or  security  interests  or other
encumbrances at any time levied or placed on the  Collateral,  may place and pay
for  insurance  thereon,  may  order  and pay for the  repair,  maintenance  and
preservation  thereof and may pay any necessary  filing or recording  fees.  The
Debtor  agrees to reimburse  the Secured Party on demand for payment made or any
expense incurred by the Secured Party pursuant to the foregoing authorization.

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<PAGE>

              (c) Until the occurrence of a Default,  Debtor may have possession
of the  Collateral  and use it in any lawful manner not  inconsistent  with this
Agreement  or any policy of  insurance  thereon,  and upon the  occurrence  of a
Default,  Secured  Party  shall  have  immediate  right  to  possession  of  the
Collateral,  provided,  however,  that Secured Party may perfect its interest in
the Collateral by possession.

              (d) All rights of the Secured Party  hereunder  shall inure to the
benefit of its  successors  and  assigns;  and all promises and duties of Debtor
shall bind its legal representatives, successors or assigns.

              (e)  Except  as may be  otherwise  provided  by  the  UCC,  Debtor
releases  Secured  Party from all claims for loss or damage caused by any act or
omission  on the part of Secured  Party,  its  officers,  agents and  employees,
except gross negligence or willful misconduct.

              (f)  This  Agreement  shall  be  governed  by and  interpreted  in
accordance  with the laws of the State of Colorado except to the extent that the
laws of the State of Florida regarding the creation,  perfection and realization
upon the security  interests and liens hereunder  require the application of the
State in which the Property is located.  Further, the place where this Agreement
is entered into and the place of performance  and  transaction of business shall
be deemed to be the State of Colorado.

              (g) Unless the context otherwise  requires,  all terms used herein
which are defined in the Florida Uniform Commercial Code, shall have the meaning
therein stated.

         DATED effective the 7 day of April, 2000.

                                    DEBTOR:

                                    ASSET INVESTORS OPERATING PARTNERSHIP, L.P.,
                                    a  Delaware limited partnership

                                    By:  ASSET INVESTORS CORPORATION, a Delaware
                                         corporation, General Partner

                                         By:   /s/David M. Becker
                                              ----------------------------
                                              David M. Becker
                                              Chief Financial Officer

                                       8
<PAGE>

                                    COMMUNITY SAVANNA CLUB JOINT VENTURE, a
                                    Delaware general partnership

                                         By:  AIOP FLORIDA PROPERTIES I, L.L.C.,
                                              a Delaware limited liability
                                              company, Managing General Partner

                                              By:  ASSET INVESTORS OPERATING
                                                   PARTNERSHIP, L.P., a Delaware
                                                   limited partnership, Sole
                                                   Member and Manager

                                                   By:  ASSET INVESTORS
                                                        CORPORATION, a  Delaware
                                                        corporation, General
                                                        Partner

                                                        By:  /s/David M. Becker
                                                            --------------------
                                                             David M. Becker
                                                             Chief Financial
                                                             Officer

                                    SECURED PARTY:

                                    U. S. BANK NATIONAL ASSOCIATION

                                    By:   /s/Cyd Petre
                                        ---------------------
                                        Cyd Petre, Vice President

                                       9
<PAGE>

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership, L.P., a Delaware limited partnership.

         Witness my hand and official seal.

         My commission expires:  12/7/2000

                                                            /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public
( S E A L )

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Florida  Properties I, L.L.C.,  as Managing  General  Partner of
Community Savanna Club Joint Venture, a Delaware general partnership.

         Witness my hand and official seal.

         My commission expires:     12/7/2000

                                                             /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public
( S E A L )

                                       10
<PAGE>

STATE OF COLORADO                                    )
                                                     )    ss.
COUNTY OF DENVER                                     )

     The foregoing  instrument was  acknowledged  before me this 7 day of April,
2000, by Cyd Petre as Vice President of U. S. Bank National Association.

         Witness my hand and official seal.

         My commission expires:    12/7/2000

                                                            /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public
( S E A L )

                                       11[GRAPHIC OMITTED]

                            EQUITY COMPENSATION PLAN

                             2000 AWARD CERTIFICATE

This award is made by Edison International to [name]("Employee") as of
[date], pursuant to the Equity Compensation Plan. Edison International hereby
grants to Employee, as a matter of separate agreement and not in lieu of salary
or any other compensation for services the following:

               --------------------------------------------
               The right and option to purchase [   ]
               shares of authorized Edison International
               Common Stock at an exercise price of $[   ]
               per share.
               --------------------------------------------

               --------------------------------------------
               A target grant of [ ] Performance
               Shares at an initial value of [ ] per
               share, the final number and value of
               which will be contingent upon Edison's
               relative Total Shareholder return and
               stock price.
               --------------------------------------------

This award is made subject to the conditions contained in the 2000 Long-Term
Incentives Terms and Conditions statement which is incorporated herein by
reference.

Edison International

By:    Theodore F. Craver, Jr.
     --------------------------
       Theodore F. Craver, Jr.

                                       1
<PAGE>

                              EDISON INTERNATIONAL
                            2000 Long-Term Incentives
                              Terms and Conditions

Long-term incentives (LTI) for the year 2000 for eligible persons (Holders) at
Edison International (EIX) or its participating affiliates (the Companies, or
individually, the Company) include EIX nonqualified stock options to purchase
EIX common stock (EIX Options) to be awarded under the Equity Compensation Plan
(Plan) and contingent EIX Performance Shares, 50% of which will be payable as
Stock Grants under the Plan and 50% of which will be payable in cash outside of
the Plan. The LTI are subject to the following terms and conditions:

1.  PRICE

The exercise price of an EIX Option stated in the award certificate is the
average of the high and low sales prices of EIX Common Stock as reported in the
Western Edition of The Wall Street Journal for the New York Stock Exchange
Composite Transactions for the date of the award.

2. VESTING

(a) Subject to the provisions of Section 3, EIX Options may only be exercised or
paid to the extent vested. The initial vesting date will be January 2nd of the
year following the date of the grant, or six months after the date of the grant,
whichever date is later. The EIX Options will vest as follows:

o    On the initial vesting date, one-fourth of the EIX Options will vest.

o    On January 2nd of the following year, an additional one-fourth of the EIX
     Options will vest.

o    On January 2nd of the following year, an additional one-fourth of the EIX
     Options will vest

o    On January 2nd of the fourth year following the date of grant, the balance
     of the EIX Options will vest.

(b) The vested portions of the EIX Options will accumulate to the extent not
exercised, and be exercisable by the Holder subject to the provisions of Section
3, in whole or in part, in any subsequent period but not later than the first
business day of the 10th calendar year following the date of the award.

(c) One-half of the Performance Shares will vest and become payable to the
extent earned at the end of the second year of the Performance Period (defined
in Section 4) (first payment date). The remaining one-half of the Performance
Shares will vest and become payable to the extent earned at the end of the full
three-year Performance Period (second payment date).

(d) If, during the vesting period or a Performance Period, the Holder retires,
terminates employment while on leave with a permanent and total disability, or
dies, then the vesting and exercise provisions of this Section 2(d) will apply.
The EIX Options will vest to the extent necessary to cause the aggregate amount
of vested EIX Options (including any previously exercised) to equal the product
of 1/48th of the number of shares granted times the number of full months of
service the Holder has completed during the vesting period, and such vested
options will be exercisable for the full original term. The Performance Shares
will vest on a pro rata basis based on each full month of service the Holder
completes during the first two years of the Performance Period for the first
payment date, and during the full three-year Performance Period for the second
payment date. Performance Shares will be payable to the Holder on such pro rata
basis on the applicable payment date to the extent of the EIX total shareholder
return (TSR) ranking achieved as specified in Section 4. Notwithstanding the
foregoing, the LTI of a Holder who served as a member of the Southern California
Edison Company Management Committee (which was dissolved in 1993) will fully
vest upon his or her retirement or death, or upon employment termination while
on leave of absence with a permanent and total disability.

(e) Upon termination of employment during the EIX Option term for any reason
other than those specified in Section 2(d), only those EIX Options that have
vested as of the prior vesting date may be exercised, and they will be forfeited
unless they are exercised within 180 days following the date of termination or
by the end of the applicable EIX Option term, if that date is earlier. If such
termination occurs (i) during the first two years of the Performance Period, all
Performance Shares will be forfeited, or (iii) during the third year of the
Performance Period, those Performance Shares subject to payment at the end of
the three-year Performance Period will be forfeited.

                                       2
<PAGE>

(f) Notwithstanding the foregoing, LTI may vest in accordance with Section 3.4
of the Plan as a result of certain events, including liquidation of EIX or
merger, reorganization or consolidation of EIX as a result of which EIX is not
the surviving corporation. Upon a change of control of EIX following the
occurrence of a Distribution Date, as that term is defined in the Rights
Agreement approved by the EIX Board of Directors on November 20, 1996, as
amended, the LTI will vest and EIX Options will remain exercisable for at least
two years following the Distribution Date. During that period, (i) the Plan may
not be terminated, (ii) individual awards may not be cashed out, terminated, or
modified without the Holder's consent, and (iii) valuation procedures and
exercise periods will occur on a basis consistent with past practice.

3. EIX OPTION EXERCISE

(a) The Holder may exercise an EIX Option by providing written notice to EIX on
the form prescribed by EIX for this purpose accompanied by full payment of the
applicable exercise price. Payment must be in cash, or its equivalent, including
EIX Common Stock valued on the exercise date at a per share price equal to the
average of the high and low sales prices of EIX Common Stock as reported in the
Western Edition of The Wall Street Journal for the New York Stock Exchange
Composite Transactions acceptable to EIX. A "cashless" exercise may be
accommodated for EIX Options at the discretion of EIX. Until payment is
accepted, the Holder will have no rights in the optioned stock. EIX Options may
be exercised at any time after they have vested through the first business day
of the 10th calendar year following the date of the award except as otherwise
provided in Sections 2(e) and 8.

(b) The Holder agrees that any securities acquired by him or her hereunder are
being acquired for his or her own account for investment and not with a view to
or for sale in connection with any distribution thereof and that he or she
understands that such securities may not be sold, transferred, pledged,
hypothecated, alienated, or otherwise assigned or disposed of without either
registration under the Securities Act of 1933 or compliance with the exemption
provided by Rule 144 or another applicable exemption under such act.

(c) The Holder will have no right or claim to any specific funds, property or
assets of EIX as a result of the award.

4. PERFORMANCE SHARES

(a) Performance Shares are EIX stock-based units subject to a performance
measure based on the percentile ranking of EIX total shareholder return (TSR)
compared to the TSR for each stock in the Dow Jones Electric Utilities Group
Index over all or part of a three-calendar-year period commencing on January 1st
of the year the Performance Shares are granted ("Performance Period"). TSR is
calculated using a 20-day trading average on the measurement dates. A target
number of contingent Performance Shares will be awarded during the first two
months of the Performance Period. The actual amount of Performance Shares to be
paid will depend on the EIX TSR percentile ranking. The target number of
Performance Shares will be paid if the EIX TSR rank is at the 60th percentile.
Payment may range from nothing if the EIX TSR is below the 40th percentile to
three times the target number of Performance Shares if the EIX TSR percentile
ranking is at the 90th percentile or higher. The payment multiples for the
various EIX TSR rankings are as follows:

<TABLE>
<CAPTION>
                 Performance Share Payment
-------------------------------------------------------------
         EIX TSR Rank               Payment Multiple(1)
------------------------------- -----------------------------
<S>       <C>                             <C>
    Above 90th Percentile                 3 times
------------------------------- -----------------------------
   75th to 89th Percentile         Between 2 and 3 times
------------------------------- -----------------------------
   60th to 74th Percentile         Between 1 and 2 times
------------------------------- -----------------------------
   40th to 59th Percentile        Between 0.25 and 1 times
------------------------------- -----------------------------
    Below 40th Percentile                 0 times
------------------------------- -----------------------------
   (1) The multiple is interpolated for performance between
       the points indicated.
</TABLE>

                                       3
<PAGE>

(b) There will be two performance measurement dates and payment dates during the
three-year Performance Period for the initial grant of Performance Shares in the
year 2000, each covering one-half of the contingent target Performance Shares
awarded. The first measurement and payment date covering the first two years of
performance will be the last business day of the second year of the Performance
Period, the second measurement and payment date will be the last business day of
the Performance Period covering all three years of performance. The applicable
target multiple earned as provided in the table above for one-half of the
Performance Shares will be paid for each Performance Period to the extent of the
EIX TSR percentile ranking achieved on the date of measurement.

(c) Each Performance Share earned will be worth one share of EIX Common Stock.
One-half of the earned Performance Shares will be paid in EIX Common Stock as a
Stock Payment under the Plan. The remaining one-half of the earned Performance
Shares will be paid in cash and the value of each Performance Share will be
equal to the average of the high and low sales prices per share of EIX Common
Stock as reported in the Western Edition of The Wall Street Journal for the New
York Stock Exchange Composite Transactions for the measurement date. The shares
of EIX Common Stock and the cash payable for the earned Performance Shares will
be delivered within 30 days following the end of the Performance Periods
described in Section 4(b).

5. DELAYED PAYMENT OR DELIVERY OF LTI GAINS

Notwithstanding the terms of any LTI, Holders who are eligible to defer salary
under the EIX Executive Deferred Compensation Plan (EDCP) may irrevocably elect
to alternatively exercise all or part of any vested EIX Option pursuant to the
terms of the Option Gain Deferral Program (OGDP), and/or may irrevocably elect
to defer receipt of all or a part of the cash portion of any Performance Shares
pursuant to the terms of the EDCP. To make such an election, the Holder must
submit a signed agreement in the form approved by the Administrator at least six
months prior to the expiration date of the EIX Option, or the payment date of a
Performance Share. An EIX Option may not be exercised for six months thereafter
except under the limited circumstances specified in the OGDP. Any subsequent
exercises or payments will be subject to the terms, conditions and restrictions
of the OGDP or the EDCP, as applicable.

6. TRANSFER AND BENEFICIARY

(a) The LTI will not be transferable by the Holder. During the lifetime of the
Holder, the LTI will be exercisable only by him or her. The Holder may designate
a beneficiary who, upon the death of the Holder, will be entitled to exercise
the then vested portion of the LTI during the remaining term subject to the
provisions of the Plan and these terms and conditions.

(b) Notwithstanding the foregoing, EIX Options of the CEOs of EIX, Edison
Mission Energy, Edison Capital and Edison Enterprises, the COO of Southern
California Edison and the EVPs of EIX are transferable to a spouse, children or
grandchildren, or trusts or other vehicles established exclusively for their
benefit. Any transfer request must specifically be authorized by EIX in writing
and shall be subject to any conditions, restrictions or requirements as the
administrator may determine.

8.  TERMINATION OF LONG TERM INCENTIVES

As set forth in Section 2(e), in the event of termination of the employment of
the Holder for any reason other than retirement, permanent and total disability
or death of the Holder, EIX Options will terminate 180 days from the date on
which such employment terminated, and Performance Shares will be forfeited. In
addition, the LTI may be terminated if EIX elects to substitute cash awards as
provided under Section 12.

9. TAXES

EIX will have the right to retain and withhold the amount of taxes required by
any government to be withheld or otherwise deducted and remitted with respect to
the exercise of any LTI. In its discretion, EIX may require the Holder to
reimburse EIX for any such taxes required to be withheld by EIX and may withhold
any distribution in whole or in part until EIX is so reimbursed. In lieu
thereof, EIX will have the right to withhold from any other cash amounts due
from EIX to the Holder an amount equal to such taxes required to be withheld by
EIX, or to retain and withhold a number of shares of EIX Common Stock having a
market value equal to such taxes and cancel (in whole or in part) the shares, or
to repurchase such shares from the Holder within six months after the shares of
Common Stock were acquired by the Holder. Shares withheld or repurchased to
reimburse EIX for federal and state income and payroll taxes shall be limited to
the number of shares which have a Fair Market Value on the date of withholding

                                       4
<PAGE>

or repurchase equal to the aggregate amount of such tax liabilities based on the
minimum statutory withholding rates that are applicable to such supplemental
taxable income.

Each recipient of an EIX Option must attach a statement to his or her federal
and state tax returns for the year in which the EIX Option was granted
containing certain information specified in tax regulations. A sample statement
is attached.

10. CONTINUED EMPLOYMENT

Nothing in the award certificate or this Statement of Terms and Conditions will
be deemed to confer on the Holder any right to continue in the employ of EIX or
an EIX affiliate or interfere in any way with the right of the employer to
terminate his or her employment at any time.

11. NOTICE OF DISPOSITION OF SHARES AND SECTION 16

(a) Holder agrees that if he or she should dispose of any shares of stock
acquired on the exercise of EIX Options, including a disposition by sale,
exchange, gift or transfer of legal title within six months from the date such
shares are transferred to the Holder, the Holder will notify EIX promptly of
such disposition.

(b) If an LTI is granted to a person who later becomes subject to the provisions
of Section 16 of the Securities Exchange Act of 1934, as amended ("Section 16"),
the LTI will immediately and automatically become subject to the requirements of
Rule 16b-3(d)(3) ("Rule") and may not be exercised, paid or transferred until
the Rule has been satisfied. In its sole discretion, the Administrator may take
any action to assure compliance with the requirements of the Rule, including
withholding delivery to Holder (or any other person) of any security or of any
other payment in any form until the requirements of the Rule have been
satisfied. The Secretary of Edison International may waive compliance with the
requirements of the Rule if he or she determines the transaction to be exempt
from the provisions of paragraph (b) of Section 16.

12. AMENDMENT

The LTI are subject to the terms of the Plan as amended from time to time. EIX
reserves the right to substitute cash awards substantially equivalent in value
to the LTI. The LTI may not otherwise be restricted or limited by any Plan
amendment or termination approved after the date of the award without the
Holder's consent.

13. FORCE AND EFFECT

The various provisions herein are severable in their entirety. Any determination
of invalidity or unenforceability of any one provision will have no effect on
the continuing force and effect of the remaining provisions.

14. GOVERNING LAW

The terms and conditions of the LTI will be construed under the laws of the
State of California.

15. NOTICE

Unless waived by EIX, any notice required under or relating to the LTI must
be in writing, with postage prepaid, addressed to: Edison International,
Attn: Corporate Secretary, P.O. Box 800, Rosemead, CA 91770.

EDISON INTERNATIONAL

     Theodore F. Craver, Jr
----------------------------------
     Theodore F. Craver, Jr.

                                       5
<PAGE>

                        STATEMENT PURSUANT TO INCOME TAX
                          REGULATION SECTION 1.61-15(c)

         This statement is attached to my income tax return in compliance with
the requirements of Income Tax Regulation ss.1.61-15(c) relative to a
nonqualified stock option I received on ------------------.

(1) Name and address of the taxpayer:

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

(2) Description of Securities subject to the option:

     On  ------------------,  I was granted a nonqualified stock option covering
-------- shares of Edison International common stock.

(3) Period during which the option is exercisable:

     The option vests and becomes exercisable as to one-fourth of the
covered shares on January 2nd of the first year after the date of grant (or six
months after the date of grant if later) and as to an additional one-fourth on
January 2nd of each of the three years thereafter. To the extent vested, the
option may be exercised at any time through the first business day of the 10th
calendar year following the date of the award.

(4) Whether the option had an ascertainable market value:

    The option did not have a readily ascertainable fair market value on the
date of the grant.

(5) Whether the option was granted as compensation:

    The option was granted as compensation and is subject to Reg.ss.1.61-15(a).

Respectfully Submitted,

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