UNDERWRITING AGREEMENT

KIMCO REALTY CORPORATION
(a Maryland corporation)

Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares

UNDERWRITING AGREEMENT


July 21, 1995


MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305


Dear Sirs:


Kimco Realty Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell shares of Common Stock,
$.01 par value (the "Common Stock"), or warrants to purchase a
number of shares of Common Stock (the "Common Stock Warrants"),
or both, or shares of Preferred Stock, $1.00 par value (the
"Preferred Shares"), from time to time, in one or more offerings
on terms to be determined at the time of sale. The Preferred
Shares may be offered in the form of depositary shares (the
"Depositary Shares") represented by depositary receipts (the
"Depositary Receipts"). The Common Stock Warrants will be issued
pursuant to a Common Stock Warrant Agreement (the "Warrant
Agreement") between the Company and a warrant agent (the "Warrant
Agent"). Each series of Preferred Shares may vary as to the
specific number of shares, title, stated value, liquidation
preference, issuance price, ranking, dividend rate or rates (or
method of calculation), dividend payment dates, any redemption or
sinking fund requirements, any conversion provisions and any
other variable terms as set forth in the applicable articles
supplementary (each, the "Articles Supplementary") relating to
such Preferred Shares. As used herein, "Securities" shall mean
the Common Stock, the Common Stock Warrants, the Preferred
Shares, the Depositary Shares and the Depositary Receipts; and
"Warrant Securities" shall mean the Common Stock issuable upon
exercise of Common Stock Warrants. As used herein, "you" and
"your", unless the context otherwise requires, shall mean the
parties to whom this Agreement is addressed together with the
other parties, if any, identified in the applicable Terms


Agreement (as hereinafter defined) as additional co-managers with
respect to Underwritten Securities (as hereinafter defined)
purchased pursuant thereto.

Whenever the Company determines to make an offering of
Securities through you or through an underwriting syndicate
managed by you, the Company will enter into an agreement (the
"Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering
thereof by, you and such other underwriters, if any, selected by
you as have authorized you to enter into such Terms Agreement on
their behalf (the "Underwriters", which term shall include you
whether acting alone in the sale of the Underwritten Securities
or as a member of an underwriting syndicate and any Underwriter
substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify
the number of Underwritten Securities of each class or series to
be initially issued, including the number of Common Stock
Warrants, if any (the "Initial Underwritten Securities"), whether
the Initial Underwritten Securities shall be in the form of
Depositary Shares and the fractional amount of Preferred Shares
represented by each Depositary Share, the names of the
Underwriters participating in such offering (subject to
substitution as provided in Section 10 hereof), the number of
Initial Underwritten Securities which each such Underwriter
severally agrees to purchase, the names of such of you or such
other Underwriters acting as co-managers, if any, in connection
with such offering, the price at which the Initial Underwritten
Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, the time, date and
place of delivery and payment, any delayed delivery arrangements
and any other variable terms of the Initial Underwritten
Securities (including, but not limited to, current ratings (in
the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions,
redemption provisions and sinking fund requirements and the terms
of the Warrant Securities and the terms, prices and dates upon
which such Warrant Securities may be purchased). In addition,
each Terms Agreement shall specify whether the Company has agreed
to grant to the Underwriters an option to purchase additional
Underwritten Securities to cover over-allotments, if any, and the
number of Underwritten Securities subject to such option (the
"Option Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and
all or any portion of the Option Securities agreed to be
purchased by the Underwriters as provided herein, if any. The
Terms Agreement, which shall be substantially in the form of
Exhibit A hereto, may take the form of an exchange of any
standard form of written telecommunication between you and the
Company. Each offering of Underwritten Securities through you or


2


through an underwriting syndicate managed by you will be governed
by this Agreement, as supplemented by the applicable Terms
Agreement.

The Company has filed with the Securities and Exchange Com-
mission (the "Commission") a registration statement on Form S-3
(No. 33-83102) (which also constitutes post-effective amendment
No. 1 to registration statement No. 33-67552) for the
registration of the Securities and Warrant Securities and certain
of the Company's debt securities, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from
time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such amendments thereto
as may have been required prior to the execution of the
applicable Terms Agreement. Such registration statement (as
amended, if applicable) has been declared effective by the
Commission. Such registration statement and the prospectus
constituting a part thereof, and each prospectus supplement
relating to the offering of Underwritten Securities (the
"Prospectus Supplement"), including all documents incorporated
therein by reference and the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) or Rule 434 of the 1933 Act
Regulations, as from time to time amended or supplemented
pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, are collectively referred
to herein as the "Registration Statement" and the "Prospectus",
respectively; provided, however, that a Prospectus Supplement
shall be deemed to have supplemented the Prospectus only with
respect to the offering of Underwritten Securities to which it
relates. All references in this Agreement to financial
statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement
or the Prospectus (and all other references of like import) shall
be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is
deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all
references to the Prospectus shall be deemed to include, without
limitation, the form of prospectus and the abbreviated term
sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement to
register a portion of the Securities and Warrant Securities and


3



relies on Rule 462(b) for such registration statement to become
effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 33-83102) and the Rule 462
Registration Statement, as each such registration statement may
be amended pursuant to the 1933 Act.

Section 1. Representations and Warranties.

(a) The Company represents and warrants to you, as of the
date hereof, and to you and each other Underwriter named in the
applicable Terms Agreement, as of the date thereof (in each case,
a "Representation Date"), as follows:

(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective and at
each time thereafter on which the Company filed an Annual
Report on Form 10-K with the Commission, complied, and as of
each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and 1933 Act
Regulations; the Registration Statement, at the time the
Registration Statement became effective and at each time
thereafter on which the Company filed an Annual Report on
Form 10-K with the Commission, did not, and at each time
thereafter on which any amendment to the Registration
Statement becomes effective or the Company files an Annual
Report on Form 10-K with the Commission and as of each
Representation Date will not, contain an untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading; and the Prospectus, as of the date
hereof, does not, and as of each Representation Date will
not, include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this subsection
shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon
and in conformity with information furnished to the Company
in writing by any Underwriter through you expressly for use
in the Registration Statement or Prospectus.

(ii) The accountants who certified the financial
statements, financial statement schedules and historical
summaries of revenue and certain operating expenses for the
properties related thereto included or incorporated by
reference in the Registration Statement and the Prospectus


4


are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.

(iii) The historical financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the
periods specified; except as may otherwise be stated in the
Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent
basis; and the financial statement schedules and other
financial information and data included or incorporated by
reference in the Registration Statement and the Prospectus
present fairly the information required to be stated
therein.

(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in
the Registration Statement and the Prospectus present fairly
the revenue and those operating expenses included in such
summaries for the periods specified in conformity with
generally accepted accounting principles; the pro forma
condensed consolidated financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus, if any, present fairly the pro forma
financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the pro forma
results of their operations for the periods specified; and
the pro forma condensed consolidated financial statements
have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, the
assumptions on which such pro forma financial statements
have been prepared are reasonable and are set forth in the
notes thereto, such pro forma financial statements have been
prepared, and the pro forma adjustments set forth therein
have been applied, in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations, and such pro forma adjustments have been
properly applied to the historical amounts in the
compilation of such statements.

(v) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
except as may otherwise be stated therein or contemplated
thereby, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or


5



not arising in the ordinary course of business, (B) there
have been no transactions or acquisitions entered into by
the Company or any of its subsidiaries other than those
arising in the ordinary course of business, which are
material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock, or
dividends declared, paid or made in accordance with the
terms of any series of the Company's preferred stock, there
has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital
stock.

(vi) The Company has been duly incorporated and is
validly existing as a corporation under the laws of Maryland
and is in good standing with the State Department of
Assessments and Taxation of Maryland with corporate power
and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; and
the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; and the
Articles Supplementary relating to the Preferred Shares or
Depositary Shares, if applicable, will be in full force and
effect as of each Representation Date.

(vii)Each significant subsidiary (as defined in Rule
1-02 of Regulation S-X promulgated under the 1933 Act) of
the Company (each, a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise;
and all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly



6


issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except for security interests granted in
respect of indebtedness of the Company or any of its
subsidiaries and referred to in the Prospectus.

(viii)The authorized, issued and outstanding stock of
the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, employee benefit
plans, dividend reinvestment plans, employee and director
stock option plans or the exercise of convertible securities
referred to in the Prospectus); and such shares of stock
have been duly authorized and validly issued and are fully
paid and non-assessable and are not subject to preemptive or
other similar rights.

(ix) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement
(each, a "Deposit Agreement"), among the Company, the
financial institution named in the Deposit Agreement
(the "Depositary") and the holders of the Depositary
Receipts issued thereunder, have, as of each
Representation Date, been duly authorized by the
Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this
Agreement and such Underwritten Securities, when issued
and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth in the
applicable Terms Agreement or any Delayed Delivery
Contract (as hereinafter defined), will be validly
issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights; the
Preferred Shares, if applicable, conform to the
provisions of the Articles Supplementary; and the
Underwritten Securities being sold pursuant to the
applicable Terms Agreement conform in all material
respects to all statements relating thereto contained
in the Prospectus.

(x) If applicable, the Common Stock Warrants have been
duly authorized and, when issued and delivered pursuant to
this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant



7


Agreement under which they are to be issued; the issuance of
the Warrant Securities upon exercise of the Common Stock
Warrants will not be subject to preemptive or other similar
rights; and the Common Stock Warrants conform in all
material respects to all statements relating thereto
contained in the Prospectus.

(xi) If applicable, the shares of Common Stock issuable
upon conversion of any of the Preferred Shares or the
Depositary Shares, or the Warrant Securities, will have been
duly and validly authorized and reserved for issuance upon
such conversion or exercise by all necessary corporate
action and such shares, when issued upon such conversion or
exercise, will be duly and validly issued and will be fully
paid and non-assessable, and the issuance of such shares
upon such conversion or exercise will not be subject to
preemptive or other similar rights; the shares of Common
Stock issuable upon conversion of any of the Preferred
Shares or the Depositary Shares, or the Warrant Securities,
conform in all material respects to the descriptions thereof
in the Prospectus.

(xii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly
authorized, executed and delivered by the Company prior to
the issuance of any applicable Underwritten Securities, and
each constitutes a valid and legally binding agreement of
the Company enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a
proceeding in equity or at law); and the Warrant Agreement,
if any, and the Deposit Agreement, if any, each conforms in
all material respects to all statements relating thereto
contained in the Prospectus.

(xiii) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary
Receipts are registered will be entitled to the rights
specified therein and in the Deposit Agreement, except as
enforcement of such rights may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a
proceeding in equity or at law).

(xiv) Neither the Company nor any of its subsidiaries is
in violation of its charter or by-laws or in default in the



8


performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, except for any such violation
or default that would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; and the
execution, delivery and performance of this Agreement, the
applicable Terms Agreement, the applicable Warrant
Agreement, if any, or the applicable Deposit Agreement, if
any, and the consummation of the transactions contemplated
herein and therein and compliance by the Company with its
obligations hereunder and thereunder have been duly
authorized by all necessary corporate action, and will not
conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the charter or by-laws of the Company or any
applicable law, administrative regulation or administrative
or court order or decree.

(xv) The Company has operated and intends to continue
to operate in such a manner as to qualify to be taxed as a
"real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), for the taxable year
in which sales of the Underwritten Securities are to occur.

(xvi) Neither the Company nor any of its subsidiaries is
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").

(xvii) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein), or which might
result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs

or business prospects of the Company and its subsidiaries


9


considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which
might materially and adversely affect the consummation of
this Agreement, the applicable Terms Agreement, the
applicable Warrant Agreement, if any, or the applicable
Deposit Agreement, if any, or the transactions contemplated
herein or therein; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries
is a party or of which any of its property or assets is the
subject which are not described in the Prospectus, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material; and there are no
contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to
the Registration Statement by the 1933 Act or by the 1933
Act Regulations which have not been so filed.

(xviii) Neither the Company nor any of its subsidiaries is
required to own or possess any trademarks, service marks,
trade names or copyrights in order to conduct the business
now operated by it, other than those the failure to possess
or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.

(xix) No authorization, approval or consent of any court
or governmental authority or agency is required that has not
been obtained in connection with the consummation by the
Company of the transactions contemplated by this Agreement,
the applicable Terms Agreement, any Warrant Agreement or any
Deposit Agreement, except such as may be required under the
1933 Act or the 1933 Act Regulations, state securities laws
or real estate syndication laws.

(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by
them, other than those the failure to possess or own would
not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise, and neither the Company nor
any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision,

ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business


10


affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.

(xxi) The Company has full corporate power and authority
to enter into this Agreement, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, and this
Agreement has been, and as of each Representation Date, the
applicable Terms Agreement and the Delayed Delivery
Contracts, if any, will have been, duly authorized, executed
and delivered by the Company.

(xxii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations
of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other
information in the Prospectus, at the time the Registration
Statement became effective and as of the applicable
Representation Date or Closing Time (as defined herein) or
during the period specified in Section 3(f), did not and
will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.

(xxiii) Except as otherwise disclosed in the Prospectus
and except as would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise: (i) all
properties and assets described in the Prospectus are owned
with good and marketable title by the Company, KC Holdings,
Inc., a Delaware corporation ("KC Holdings"), their
respective subsidiaries and/or a joint venture or
partnership in which any such party is a participant (a
"Related Entity"); (ii) all of the leases under which any of
the Company, KC Holdings, their respective subsidiaries or,
to the knowledge of the Company, Related Entities holds or
uses real properties or assets as a lessee are in full force
and effect, and neither the Company, KC Holdings nor any of
their respective subsidiaries or, to the knowledge of the
Company, Related Entities is in material default in respect
of any of the terms or provisions of any of such leases and
no claim has been asserted by anyone adverse to any such

party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the
continued possession or use of the leased property or assets


11


under any such leases; (iii) all liens, charges,
encumbrances, claims or restrictions on or affecting the
properties and assets of any of the Company, KC Holdings or
their respective subsidiaries or Related Entities which are
required to be disclosed in the Prospectus are disclosed
therein; (iv) neither the Company, KC Holdings nor any of
their respective subsidiaries or, to the knowledge of the
Company, Related Entities nor any lessee of any portion of
any such party's properties is in default under any of the
leases pursuant to which any of the Company, KC Holdings or
their respective subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties and neither
the Company, KC Holdings nor any of their respective
subsidiaries or Related Entities knows of any event which,
but for the passage of time or the giving of notice, or
both, would constitute a default under any of such leases;
(v) no tenant under any of the leases pursuant to which any
of the Company, KC Holdings or their respective subsidiaries
or, to the knowledge of the Company, Related Entities leases
its properties has an option or right of first refusal to
purchase the premises demised under such lease; (vi) each of
the properties of any of the Company, KC Holdings or, to the
knowledge of the Company, their respective subsidiaries or
Related Entities complies with all applicable codes and
zoning laws and regulations; and (vii) neither the Company
nor KC Holdings nor any of their respective subsidiaries has
knowledge of any pending or threatened condemnation, zoning
change or other proceeding or action that will in any manner
affect the size of, use of, improvements on, construction
on, or access to the properties of any of the Company, KC
Holdings or their respective subsidiaries or Related
Entities.

(xxiv) Title insurance in favor of the mortgagee or the
Company, KC Holdings, their respective subsidiaries and/or
their Related Entities is maintained with respect to each
shopping center property owned by any such entity in an
amount at least equal to (a) the cost of acquisition of such
property or (b) the cost of construction of such property
(measured at the time of such construction), except, in each
case, where the failure to maintain such title insurance
would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise.


(xxv) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not
convertible nor does any of the Company, KC Holdings or


12


their respective subsidiaries hold a participating interest
therein, and said mortgages and deeds of trust with respect
to property owned by the Company and its subsidiaries are
not cross-defaulted or cross-collateralized to any property
owned by KC Holdings and its subsidiaries.

(xxvi) Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries
is a party, and which relates to real property described in
the Prospectus, has been duly authorized, executed and
delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms,
except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to or affecting the
rights or remedies of creditors or (b) the effect of general
principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought,
and the execution, delivery and performance of any of such
agreements did not, at the time of execution and delivery,
and does not constitute a breach of, or default under, the
charter or by-laws of such party or any material contract,
lease or other instrument to which such party is a party or
by which its properties may be bound or any law,
administrative regulation or administrative or court order
or decree.

(xxvii) None of the Company, KC Holdings or any of their
respective subsidiaries has any knowledge of (a) the
unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials
(collectively, "Hazardous Materials") on any of the
properties owned by it or the Related Entities, or (b) any
unlawful spills, releases, discharges or disposal of
Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any
construction on or operation and use of such properties
which presence or occurrence would have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or
of KC Holdings and its subsidiaries considered as one
enterprise; and in connection with the construction on or
operation and use of the properties owned by the Company, KC

Holdings, their respective subsidiaries and Related
Entities, each of the Company, KC Holdings and their
respective subsidiaries represents that, as of each
Representation Date, it has no knowledge of any material
failure to comply with all applicable local, state and


13


federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.

(b) Any certificate signed by any officer of the Company
and delivered to you or to counsel for the Underwriters in
connection with the offering of the Underwritten Securities shall
be deemed a representation and warranty by the Company to each
Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date
subsequent thereto.

Section 2. Purchase and Sale.

(a) The several commitments of the Underwriters to purchase
the Underwritten Securities pursuant to the applicable Terms
Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth.

(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company may grant, if so
provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters
named in such Terms Agreement, severally and not jointly, to
purchase up to the number of Option Securities set forth therein
at the same price per Option Security as is applicable to the
Initial Underwritten Securities. Such option, if granted, will
expire 30 days or such lesser number of days as may be specified
in the applicable Terms Agreement after the Representation Date
relating to the Initial Underwritten Securities, and may be
exercised in whole or in part from time to time only for the
purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial
Underwritten Securities upon notice by you to the Company setting
forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time, date
and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall
be determined by you, but shall not be later than three full
business days and not be earlier than two full business days

after the exercise of said option, unless otherwise agreed upon
by you and the Company. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion
of the total number of Option Securities then being purchased
which the number of Initial Underwritten Securities each such


14


Underwriter has severally agreed to purchase as set forth in the
applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the
applicable Terms Agreement), subject to such adjustments as you
in your discretion shall make to eliminate any sales or purchases
of fractional Initial Underwritten Securities.

(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall
be made at the office of Brown & Wood, 58th Floor, One World
Trade Center, New York, New York 10048-0557, or at such other
place as shall be agreed upon by you and the Company, at 10:00
A.M., New York City time, on the third business day (unless
postponed in accordance with the provisions of Section 10)
following the date of the applicable Terms Agreement or, if
pricing takes place after 4:30 p.m., New York City time, on the
date of the applicable Terms Agreement, on the fourth business
day (unless postponed in accordance with the provisions of
Section 10) following the date of the applicable Terms Agreement
or at such other time as shall be agreed upon by you and the
Company (each such time and date being referred to as a "Closing
Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the
purchase price for, and delivery of certificates representing,
such Option Securities, shall be made at the above-mentioned
offices of Brown & Wood, or at such other place as shall be
agreed upon by you and the Company on each Date of Delivery as
specified in the notice from you to the Company. Unless
otherwise specified in the applicable Terms Agreement, payment
shall be made to the Company by certified or official bank check
or checks in New York Clearing House or similar next-day funds
payable to the order of the Company against delivery to you for
the respective accounts of the Underwriters for the Underwritten
Securities to be purchased by them. The Underwritten Securities
or, if applicable, Depositary Receipts evidencing the Depositary
Shares, shall be in such authorized denominations and registered
in such names as you may request in writing at least one business
day prior to the applicable Closing Time or Date of Delivery, as
the case may be. The Underwritten Securities, which may be in
temporary form, will be made available for examination and
packaging by you on or before the first business day prior to the
Closing Time or Date of Delivery, as the case may be.


If authorized by the applicable Terms Agreement, the
Underwriters named therein may solicit offers to purchase
Underwritten Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts") substantially
in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed
Delivery Contracts, the Company will pay to you at Closing Time,


15


for the respective accounts of the Underwriters, a fee specified
in the applicable Terms Agreement for each of the Underwritten
Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement.
Any Delayed Delivery Contracts are to be with institutional
investors of the types described in the Prospectus. At the
Closing Time, the Company will enter into Delayed Delivery
Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the
applicable Terms Agreement) with all purchasers proposed by the
Underwriters and previously approved by the Company as provided
below, but not for an aggregate number of Underwritten Securities
in excess of that specified in the applicable Terms Agreement.
The Underwriters will not have any responsibility for the
validity or performance of Delayed Delivery Contracts.

You shall submit to the Company, at least two business days
prior to the Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter
into Delayed Delivery Contracts and the number of Underwritten
Securities to be purchased by each of them, and the Company will
advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the number of
Underwritten Securities to be covered by each such Delayed
Delivery Contract.

The number of Underwritten Securities agreed to be purchased
by the several Underwriters pursuant to the applicable Terms
Agreement shall be reduced by the number of Underwritten
Securities covered by Delayed Delivery Contracts, as to each
Underwriter as set forth in a written notice delivered by you to
the Company; provided, however, that the total number of
Underwritten Securities to be purchased by all Underwriters shall
be the total number of Underwritten Securities covered by the
applicable Terms Agreement, less the number of Underwritten
Securities covered by Delayed Delivery Contracts.

SECTION 3. Covenants of the Company. The Company covenants
with you, and with each Underwriter participating in the offering
of Underwritten Securities, as follows:


(a) If the Company does not elect to rely on Rule 434 under
the 1933 Act Regulations, immediately following the execution of
the applicable Terms Agreement, the Company will prepare a
Prospectus Supplement setting forth the number of Underwritten
Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten
Securities are being issued, the names of the Underwriters
participating in the offering and the number of Underwritten


16


Securities which each severally has agreed to purchase, the names
of the Underwriters acting as co-managers in connection with the
offering, the price at which the Underwritten Securities are to
be purchased by the Underwriters from the Company, the initial
public offering price, if any, the selling concession and
reallowance, if any, any delayed delivery arrangements, and such
other information as you and the Company deem appropriate in
connection with the offering of the Underwritten Securities; and
the Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424(b)
of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such
Prospectus Supplement) as you shall reasonably request. If the
Company elects to rely on Rule 434 under the 1933 Act
Regulations, immediately following the execution of the
applicable Terms Agreement, the Company will prepare an
abbreviated term sheet that complies with the requirements of
Rule 434 under the 1933 Act Regulations and will provide the
Underwriters with copies of the form of Rule 434 Prospectus, in
such number as you shall reasonably request, and promptly file or
transmit for filing with the Commission the form of Prospectus
complying with Rule 434(c)(2) of the 1933 Act Regulations in
accordance with Rule 424(b) of the 1933 Act Regulations.

(b) The Company will notify you immediately, and confirm
such notice in writing, of (i) the effectiveness of any amendment
to the Registration Statement, (ii) the transmittal to the
Commission for filing of any Prospectus Supplement or other
supplement or amendment to the Prospectus or any document to be
filed pursuant to the 1934 Act, (iii) the receipt of any comments
from the Commission, (iv) any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and
(v) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose; and the Company will make
every reasonable effort to prevent the issuance of any such stop
order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.

(c) At any time when the Prospectus is required to be

delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities, the Company will give you
notice of its intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the 1933 Act, 1934 Act or
otherwise (including any revised prospectus which the Company
proposes for use by the Underwriters in connection with an
offering of Underwritten Securities which differs from the
Prospectus on file at the Commission at the time the Registration

17


Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the
1933 Act Regulations, or any abbreviated term sheet prepared in
reliance on Rule 434 of the 1933 Act Regulations), and will
furnish you with copies of any such amendment or supplement or
other documents proposed to be filed or used a reasonable amount
of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or other
documents in a form to which you or counsel for the Underwriters
shall reasonably object.

(d) The Company will deliver to each Underwriter as many
signed and conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) as such Underwriter reasonably requests.

(e) The Company will furnish to each Underwriter, from time
to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations.

(f) If at any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with
sales of the Underwritten Securities any event shall occur or
condition exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of either
such counsel, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations,

then the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing
documents pursuant to the 1933 Act, the 1934 Act or otherwise, as
may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with
such requirements.

(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant


18


Securities, if any, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if
any, for offering and sale under the applicable securities laws
and real estate syndication laws of such states and other
jurisdictions of the United States as you may designate. In each
jurisdiction in which the Underwritten Securities, the Warrant
Securities, if any, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if
any, have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long
as may be required for the distribution of the Underwritten
Securities and the Warrant Securities, if any; provided, however,
that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction where it is not so qualified.

(h) With respect to each sale of Underwritten Securities,
the Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later
than the first day of the Company's fiscal quarter next following
the "effective date" (as defined in such Rule 158) of the Regis-
tration Statement.

(i) The Company will use its best efforts to meet the
requirements to qualify as a "real estate investment trust" under
the Code for the taxable year in which sales of the Underwritten
Securities are to occur.

(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of the Underwritten Securities, will file
all documents required to be filed with the Commission pursuant
to Section 13, 14 or 15 of the 1934 Act within the time periods
prescribed by the 1934 Act and the 1934 Act Regulations.

(k) The Company will not, during a period of 90 days from
the date of the applicable Terms Agreement, with respect to the

Underwritten Securities covered thereby, without your prior
written consent, offer or sell, grant any option for the sale of,
or enter into any agreement to sell, any Securities of the same
class or series or ranking on a parity with such Underwritten
Securities (other than the Underwritten Securities which are to
be sold pursuant to such Terms Agreement) or, if such Terms
Agreement relates to Underwritten Securities that are convertible
into Common Stock, any Common Stock or any security convertible
into Common Stock (except for Common Stock issued pursuant to
reservations, agreements, employee benefit plans, dividend

19


reinvestment plans, employee and director stock option plans or
as partial or full payment for properties to be acquired by the
Company), except as may be otherwise provided in the applicable
Terms Agreement.

(l) If the Preferred Shares or Depositary Shares are
convertible into shares of Common Stock or if Common Stock
Warrants are issued, the Company will reserve and keep available
at all times, free of preemptive or other similar rights, a
sufficient number of shares of Common Stock or Preferred Shares,
as the case may be, for the purpose of enabling the Company to
satisfy any obligations to issue such shares upon conversion of
the Preferred Shares or the Depositary Shares, as the case may
be, or upon exercise of the Common Stock Warrants.

(m) If the Preferred Shares or Depository Shares are
convertible into shares of Common Stock, the Company will use its
best efforts to list the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares on the
New York Stock Exchange or such other national exchange on which
the Company's shares of Common Stock are then listed.

(n) The Company has complied and will comply with the
provisions of Florida H.B. 1771, codified as Section 517.075 of
the Florida Statutes, 1987, as amended, and all regulations
thereunder relating to issuers doing business with Cuba.


Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under
this Agreement or the applicable Terms Agreement, including (i)
the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the printing
and filing of this Agreement and the applicable Terms Agreement,
(iii) the preparation, issuance and delivery of the Underwritten
Securities to the Underwriters and the Warrant Securities, if
any, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Underwritten
Securities, the Warrant Securities, if any, and the shares of
Common Stock issuable upon conversion of the Preferred Shares or

the Depositary Shares, if any, under securities laws and real
estate syndication laws in accordance with the provisions of
Section 3(g), including filing fees and the fees and
disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of
each amendment thereto, and of the Prospectus and any amendments
or supplements thereto, including each abbreviated term sheet
delivered by the Company pursuant to Rule 434 of the 1933 Act


20


Regulations, (vii) the printing and delivery to the Underwriters
of copies of the applicable Deposit Agreement, if any, and the
applicable Warrant Agreement, if any, (viii) any fees charged by
nationally recognized statistical rating organizations for the
rating of the Securities, (ix) the fees and expenses, if any,
incurred with respect to the listing of the Underwritten
Securities, the Warrant Securities, if any, or the shares of
Common Stock issuable upon conversion of the Preferred Shares or
the Depositary Shares, if any, on any national securities
exchange, and (x) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities
Dealers, Inc.

If the applicable Terms Agreement is terminated by you in
accordance with the provisions of Section 5 or Section 9(b)(i),
the Company shall reimburse the Underwriters named in such Terms
Agreement for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the
Underwriters.

Section 5. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase Underwritten
Securities pursuant to the applicable Terms Agreement are subject
to the accuracy of the representations and warranties of the
Company herein contained, to the accuracy of the statements of
the Company's officers made in any certificate pursuant to the
provisions hereof, to the performance by the Company of all of
its covenants and other obligations hereunder, and to the
following further conditions:

(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, (ii) if Preferred Shares or
Depositary Shares are being offered, the rating assigned by any
nationally recognized statistical rating organization to any
preferred stock of the Company as of the date of the applicable
Terms Agreement shall not have been lowered since such date nor
shall any such rating organization have publicly announced that

it has placed any preferred stock of the Company on what is
commonly termed a "watch list" for possible downgrading, and
(iii) there shall not have come to your attention any facts that
would cause you to believe that the Prospectus, together with the
applicable Prospectus Supplement, at the time it was required to
be delivered to purchasers of the Underwritten Securities,
included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not
misleading.


21


(b) At Closing Time, you shall have received:

(1) The favorable opinion, dated as of Closing Time,
of Latham & Watkins, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to
the effect that:

(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the
State of Maryland and is in good standing with the
State Department of Assessments and Taxation of
Maryland.

(ii) The Company has corporate power and authority
to own, lease and operate its properties and to conduct
its business as described in the Prospectus.

(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in each jurisdiction in which it owns or
leases real property, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.

(iv) The authorized, issued and outstanding stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee
benefit plans, dividend reinvestment plans or employee
and director stock option plans referred to in the
Prospectus); and such shares of stock are duly
authorized, validly issued, fully paid and non-
assessable and are not subject to preemptive or other
similar rights arising by operation of law or, to the
best of such counsel's knowledge and information,
otherwise.


(v) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement,
have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have
been duly authorized for issuance and sale pursuant to
this Agreement and such Underwritten Securities, when
issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set
forth in the applicable Terms Agreement or any Delayed


22


Delivery Contract, will be validly issued, fully paid
and non-assessable and will not be subject to
preemptive or other similar rights; and the Preferred
Shares, if applicable, conform to the provisions of the
Articles Supplementary.

(vi) If applicable, the Common Stock Warrants have
been duly authorized and, when issued and delivered
pursuant to this Agreement and countersigned by the
Warrant Agent as provided in the Warrant Agreement,
will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits
provided by the Warrant Agreement under which they are
to be issued.

(vii) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares
or Depositary Shares, or the exercise of Warrant
Securities, have been duly and validly authorized and
reserved for issuance upon such conversion or exercise
by all necessary corporate action on the part of the
Company and such shares, when issued upon such
conversion or exercise in accordance with the charter
of the Company, the Deposit Agreement, the Terms
Agreement, the Delayed Delivery Contract or the Warrant
Agreement, as the case may be, will be duly and validly
issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other
similar rights arising by operation of law or, to the
best of such counsel's knowledge, otherwise.

(viii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, have been
duly authorized, executed and delivered by the Company,
and (assuming due authorization, execution and delivery
by the Warrant Agent in the case of the Warrant

Agreement, and the Depositary, in the case of the
Deposit Agreement) each constitutes a valid and legally
binding agreement of the Company enforceable in
accordance with its terms; and the Warrant Agreement,
if any, and the Deposit Agreement, if any, each
conforms in all material respects to all statements
relating thereto contained in the Prospectus.

(ix) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the
Deposit Agreement, the persons in whose names such
Depositary Receipts are registered will be entitled to


23


the rights specified therein and in the Deposit
Agreement.

(x) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any,
has been duly authorized, executed and delivered by the
Company.

(xi) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's
knowledge and information, no stop order suspending the
effectiveness of the Registration Statement has been
issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.

(xii) The Registration Statement and the
Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or
issue dates, comply as to form in all material respects
with the requirements for registration statements on
Form S-3 under the 1933 Act and the 1933 Act
Regulations; it being understood, however, that no
opinion need be rendered with respect to the financial
statements, schedules and other financial and
statistical data included or incorporated by reference
in the Registration Statement or the Prospectus; it
being understood, further, that in passing upon the
compliance as to form of the Registration Statement and
the Prospectus, such counsel may assume that the
statements made therein are correct and complete. If
applicable, the Rule 434 Prospectus conforms in all
material respects to the requirements of Rule 434 under
the 1933 Act Regulations.

(xiii) Each document filed pursuant to the 1934 Act
(other than the financial statements, schedules and
other financial and statistical data included therein,

as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference
in the Prospectus complied when so filed as to form in
all material respects with the 1934 Act and the 1934
Act Regulations. In passing upon compliance as to form
of such documents, such counsel may assume that the
statements made therein are correct and complete.

(xiv) If applicable, the relative rights,
preferences, interests and powers of the Preferred
Shares or Depositary Shares, as the case may be, are as
set forth in the Articles Supplementary relating
thereto, and all such provisions are valid under the

24


Maryland General Corporation Law ("MGCL"); and, as
applicable, the form of certificate used to evidence
the Preferred Shares being represented by the
Depositary Shares and the form of certificate used to
evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all
applicable statutory requirements under the MGCL.

(xv) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable
upon conversion of the Preferred shares or Depository
shares, if applicable, conform in all material respects
to the statements relating thereto contained in the
Prospectus.

(xvi) No authorization, approval or consent of any
court or governmental authority or agency is required
that has not been obtained in connection with the
consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or
the applicable Warrant Agreement, if any, except such
as may be required under the 1933 Act, 1934 Act and
state securities laws or real estate syndication laws.

(xvii)Neither the Company nor any of its
subsidiaries is required to be registered under the
1940 Act.

(xviii)Commencing with the Company's taxable year
beginning January 1, 1992, the Company has been
organized in conformity with the requirements for
qualification as a "real estate investment trust", and
its method of operation will enable it to meet the
requirements for qualification and taxation as a "real
estate investment trust" under the Code, provided that
such counsel's opinion as to this matter shall be

conditioned upon certain representations as to factual
matters made by the Company to such counsel as
described therein.

(xix) The statements set forth (a) in the Prospectus
under the caption "Certain Federal Income Tax
Considerations to the Company of its REIT Election" and
(b) in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations", to the
extent such statements constitute matters of law,
summaries of legal matters, or legal conclusions, have
been reviewed by them and are accurate in all material
respects.


25



The opinions rendered in (vi), (viii) and (ix) of
subsection (b)(1) are subject to the following exceptions,
limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; and (ii) the
effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor
may be brought.

(2) The favorable opinion, dated as of Closing Time,
of Robert P. Shulman, Esq., counsel for the Company and KC
Holdings, in form and substance satisfactory to counsel for
the Underwriters, to the effect that:

(i) To the best of his knowledge and information,
there are no legal or governmental proceedings pending
or threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of
which any of the property of the Company or its
subsidiaries is the subject which are not described in
the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the
aggregate, not material.

(ii) To the best of his knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required
to be described or referred to in the Registration
Statement or the Prospectus or to be filed as exhibits
to the Registration Statement other than those
described or referred to therein or filed as exhibits

thereto, the descriptions thereof or references thereto
are correct, and, to the best of his knowledge and
information, no default exists in the due performance
or observance of any material obligation, agreement,
covenant or condition contained in any contract,
indenture, mortgage, (except as otherwise described in
the Prospectus) loan agreement, note, lease or other
instrument so described, referred to or filed which
would have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or
business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise.


26


(iii) To the best of his knowledge and information,
the execution and delivery of this Agreement, the
applicable Terms Agreement, the applicable Deposit
Agreement, if any, or the applicable Warrant Agreement,
if any, and the consummation of the transactions
contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder
will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries
pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in
violation of the provisions of the charter or by-laws
of the Company or any applicable law, administrative
regulation or administrative or court order or decree.

(iv) Each of the partnership and joint venture
agreements to which the Company or any of its
subsidiaries is a party, and which relates to real
property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable
party and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as
limited by bankruptcy and general equitable principles
and the execution, delivery and performance of any of
such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or
default under, the charter or by-laws of such party or
any material contract, lease or other instrument to
which such party is a party or by which its properties
may be bound or any law, administrative regulation or

administrative or court order or decree.

(v) The Company, KC Holdings, their respective
subsidiaries and their Related Entities hold title to
the properties and assets described in the Prospectus,
subject only to the liens and encumbrances securing
indebtedness reflected in the Prospectus and such other
liens, encumbrances and matters of record which do not
materially and adversely affect the value of such
properties and assets considered in the aggregate.

(vi) Each Significant Subsidiary of the Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the


27


jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties
and to conduct its business as described in the
Prospectus and, to the best of his knowledge and
information, is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction in which it owns or leases real property,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and
outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and, to the best of
their knowledge and information, is owned by the
Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except for security
interests granted in respect of indebtedness of the
Company or any of its subsidiaries and described in the
Prospectus.

(3) The favorable opinion, dated as of Closing Time,
of Brown & Wood, counsel for the Underwriters, with respect
to the matters set forth in (i), (v) to (xii), inclusive,
and (xv) of subsection (b)(1) of this Section.

(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section,
Latham & Watkins, Robert P. Shulman, Esq. and Brown & Wood
shall each additionally state that nothing has come to their
attention that would lead them to believe that the
Registration Statement or any amendment thereto, at the time
it became effective (or, if an amendment to the Registration

Statement or an Annual Report on Form 10-K has been filed by
the Company with the Commission subsequent to the
effectiveness of the Registration Statement, then at the
time such amendment becomes effective or at the time of the
most recent filing of such Annual Report, as the case may
be) or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, at the
Representation Date or at Closing Time, included or includes
an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under



28


which they were made, not misleading. In giving their
opinions, Latham & Watkins, Robert P. Shulman, Esq. and
Brown & Wood may rely, (1) as to matters involving the laws
of the State of Maryland the opinion of Ballard Spahr
Andrews & Ingersoll (or other counsel reasonably
satisfactory to counsel for the Underwriters) in form and
substance satisfactory to counsel for the Underwriters, (2)
as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for
the Company, and (3) as to the qualification and good
standing of the Company or any of its subsidiaries to do
business in any state or jurisdiction, upon certificates of
appropriate government officials or opinions of counsel in
such jurisdictions.

(c) At Closing Time, there shall not have been, since the
date of the applicable Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and
you shall have received a certificate of the Chief Executive
Officer, the President or Vice President and the chief financial
officer or chief accounting officer of the Company, dated as of
such Closing Time, to the effect that (i) there has been no such
material adverse change and (ii) the representations and
warranties in Section 1 are true and correct with the same force
and effect as though such Closing Time were a Representation
Date. As used in this Section 5(c), the term "Prospectus" means
the Prospectus in the form first used by the Underwriters to
confirm sales of the Underwritten Securities.

(d) At the time of execution of the applicable Terms
Agreement, you shall have received from Coopers & Lybrand L.L.P.

a letter dated such date, in form and substance satisfactory to
you, to the effect that (i) they are independent accountants with
respect to the Company within the meaning of the 1933 Act and the
1933 Act Regulations thereunder; (ii) it is their opinion that
the consolidated financial statements and financial statement
schedules of the Company and the historical summaries of revenue
and certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration
Statement and the Prospectus and audited by them and covered by
their opinions therein comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and
the 1933 Act Regulations; (iii) they have performed limited
procedures, not constituting an audit, including a reading of the
latest available unaudited interim consolidated financial


29


statements of the Company, a reading of the minute books of the
Company, inquiries of certain officials of the Company who have
responsibility for financial and accounting matters and such
other inquiries and procedures as may be specified in such
letter, and on the basis of such limited review and procedures
nothing came to their attention that caused them to believe that
(A) any material modifications should be made to the unaudited
financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus for them to be in conformity with
generally accepted accounting principles, (B) the unaudited
financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the 1934 Act as it relates to Form 10-Q and the 1934 Act
Regulations, (C) the unaudited operating data and balance sheet
data of the Company in the Registration Statement and the
Prospectus under the caption "Selected Consolidated Financial
Data" were not determined on a basis substantially consistent
with that used in determining the corresponding amounts in the
audited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, or
(D) at a specified date not more than three days prior to the
date of the applicable Terms Agreement, there has been any change
in the capital stock of the Company or in the consolidated long
term debt of the Company or any decrease in the net assets of the
Company, as compared with the amounts shown in the most recent
consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus or, during the
period from the date of the most recent consolidated statement of
operations included or incorporated by reference in the
Registration Statement and the Prospectus to a specified date not
more that three days prior to the date of the applicable Terms
Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated

revenues, or decrease in net income or net income per share of
the Company, except in all instances for changes, increases or
decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (iv) in addition to the
audit referred to in their opinions and the limited procedures
referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration
Statement and the Prospectus and which are specified by you, and
have found such amounts, percentages and financial information to
be in agreement with the relevant accounting, financial and other
records of the Company and its subsidiaries identified in such
letter.


30


(e) At Closing Time, you shall have received from Coopers &
Lybrand L.L.P. a letter dated as of Closing Time to the effect
that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the
"specified date" referred to shall be a date not more than three
days prior to such Closing Time.

(f) At the time of the execution of the applicable Terms
Agreement, you shall have received a letter from Hays & Company,
dated such date, in form and substance satisfactory to the
Underwriters, to the effect that (i) they are independent
accountants with respect to the Company within the meaning of the
1933 Act and the 1933 Act Regulations and (ii) it is their
opinion that the historical summaries of revenue and certain
operating expenses for the properties related thereto included in
each of the Company's Form 8-Ks and Form 8-K/As incorporated by
reference in the Registration Statement and the Prospectus and
audited by them and covered by their opinions therein comply in
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations.

(g) At Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Underwritten Securities and the
Warrant Securities, if any, as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the
Underwritten Securities and the Warrant Securities, if any, as
herein contemplated shall be satisfactory in form and substance
to you and counsel for the Underwriters.

(h) In the event the Underwriters exercise their option

provided in a Terms Agreement as set forth in Section 2(b) hereof
to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, you shall have received:

(1) A certificate, dated such Date of Delivery, of the
Chief Executive Officer, the President or the chief
financial or chief accounting officer of the Company, in
their capacities as such, confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) hereof
remains true and correct as of such Date of Delivery.


31


(2) The favorable opinion of Latham & Watkins, counsel
for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by
Sections 5(b)(1) and 5(b)(4) hereof.

(3) The favorable opinion of Robert P. Shulman, Esq.,
counsel for the Company and KC Holdings, in form and
substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as
the opinion required by Sections 5(b)(2) and 5(b)(4) hereof.

(4) The favorable opinion of Brown & Wood, counsel for
the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as
the opinion required by Sections 5(b)(3) and 5(b)(4) hereof.

(5) A letter from Coopers & Lybrand L.L.P., in form
and substance satisfactory to you and dated such Date of
Delivery, substantially the same in scope and substance as
the letter furnished to you pursuant to Section 5(d) hereof,
except that the "specified date" in the letter furnished
pursuant to this Section 5(h)(5) shall be a date not more
than three days prior to such Date of Delivery.

(6) A letter from Hays & Company, in form and
substance satisfactory to you and dated such Date of
Delivery, reaffirming the statements made in the letter
furnished to you pursuant to Section 5(f) hereof.

If any condition specified in this Section shall not have
been fulfilled when and as required to be fulfilled, the
applicable Terms Agreement may be terminated by you by notice to
the Company at any time at or prior to the Closing Time, and such

termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.

Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act as follows:

(1) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any un-
true statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), including the information deemed to be
part of the Registration Statement pursuant to Rule 430A(b)

32


or Rule 434 of the 1933 Act Regulations, if applicable, or
the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material
fact included in the Prospectus (or any amendment or
supplement thereto) or the omission, or alleged omission
therefrom, of a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;

(2) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission referred to
in subsection (1) above, or any such alleged untrue
statement or omission, if such settlement is effected with
the written consent of the Company; and

(3) against any and all expense whatsoever (including,
the fees and disbursements of counsel chosen by you), as
incurred, which was reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (1) or (2) above;

provided, however, that this indemnity agreement shall not apply
to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any

Underwriter through you expressly for use in the Registration
Statement (or any amendment thereto) and the Prospectus (or any
amendment or supplement thereto); provided further, that with
respect to any preliminary prospectus, such indemnity shall not
inure to the benefit of any Underwriter (or the benefit of any
person controlling such Underwriter) if the person asserting any
such losses, liabilities, claims, damages or expenses purchased
the Underwritten Securities which are the subject thereof from
such Underwriter and if such person was not sent or given a copy
of the Prospectus at or prior to confirmation of the sale of such
Underwritten Securities to such person in any case where such
sending or giving is required by the 1933 Act and the untrue
statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus and the

33


Prospectus was delivered to such Underwriter a reasonable amount
of time prior to the date of delivery of such confirmation.

(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who
signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933
Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of
this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the
Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).

(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement.
An indemnifying party may participate at its own expense in the
defense of such action. If it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with
any other indemnifying parties receiving such notice, may assume
the defense of such action with counsel chosen by it and approved
by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which
are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense
of such action, the indemnifying parties shall not be liable for
any fees and expenses of counsel for the indemnified parties

incurred thereafter in connection with such action. In no event
shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations
or circumstances.


Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity
agreement provided for in Section 6 is for any reason held to be
unenforceable by the indemnified parties although applicable in
accordance with its terms, the Company and the Underwriters with


34


respect to the offering of the Underwritten Securities shall
contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and one or more of the
Underwriters in respect of such offering, as incurred, in such
proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus in respect
of such offering bears to the initial public offering price
appearing thereon and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. Notwith-
standing the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by
which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay in respect of such losses, liabilities, claims,
damages and expenses. For purposes of this Section, each person,
if any, who controls an Underwriter within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.

Section 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement or the applicable Terms Agreement, or
contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and

effect, regardless of any termination of this Agreement or the
applicable Terms Agreement, or investigation made by or on behalf
of any Underwriter or any controlling person, or by or on behalf
of the Company and shall survive delivery of and payment for the
Underwritten Securities.

Section 9. Termination of Agreement. (a) This Agreement
(excluding the applicable Terms Agreement) may be terminated for
any reason at any time by the Company or by you upon the giving
of 30 days' written notice of such termination to the other party
hereto.

(b) You may also terminate the applicable Terms Agreement,
by notice to the Company, at any time at or prior to the Closing
Time if (i) there has been, since the date of such Terms

35


Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United
States or any outbreak or escalation of hostilities or other
national or international calamity or crisis, the effect of which
is such as to make it, in your judgment, impracticable to market
the Underwritten Securities or enforce contracts for the sale of
the Underwritten Securities, or (iii) trading in any of the
securities of the Company has been suspended by the Commission or
the New York Stock Exchange, or if trading generally on either
the New York Stock Exchange or the American Stock Exchange has
been suspended, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are
being offered and the rating assigned by any nationally
recognized statistical rating organization to any preferred stock
of the Company as of the date of the applicable Terms Agreement
shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any
preferred stock of the Company on what is commonly termed a
"watch list" for possible downgrading. As used in this Section
9(b), the term "Prospectus" means the Prospectus in the form
first used by the Underwriters to confirm sales of the
Underwritten Securities.

(c) In the event of any such termination, (x) the covenants
set forth in Section 3 with respect to any offering of
Underwritten Securities shall remain in effect so long as any

Underwriter owns any such Underwritten Securities purchased from
the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of
Section 4 hereof, the indemnity and contribution agreements set
forth in Sections 6 and 7 hereof, and the provisions of Sections
8 and 13 hereof shall remain in effect.

Section 10. Default by One or More of the Underwriters. If
one or more of the Underwriters shall fail at the Closing Time to
purchase the Underwritten Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities


36


in such amounts as may be agreed upon and upon the terms herein
set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:

(a) if the total number of Defaulted Securities does not
exceed 10% of the total number of Underwritten Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to
purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or

(b) if the total number of Defaulted Securities exceeds 10%
of the total number of Underwritten Securities to be purchased
pursuant to such Terms Agreement, the applicable Terms Agreement
shall terminate without liability on the part of any
non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default
under this Agreement and the applicable Terms Agreement.

In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the
Company shall have the right to postpone the Closing Time for a
period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectus or in any
other documents or arrangements.

Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed
c/o Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith

Incorporated, World Financial Center, North Tower, New York, New
York 10281-1305, attention of Richard B. Saltzman, Managing
Director; and notices to the Company shall be directed to it at
3333 New Hyde Park Road, New Hyde Park, New York 11042-0020,
attention of Milton Cooper, Chairman of the Board.

Section 12. Parties. This Agreement and the applicable
Terms Agreement shall inure to the benefit of and be binding upon
you and the Company and any Underwriter who becomes a party to
such Terms Agreement, and their respective successors. Nothing
expressed or mentioned in this Agreement or the applicable Terms
Agreement is intended or shall be construed to give any person,
firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this
Agreement or such Terms Agreement or any provision herein or


37


therein contained. This Agreement and the applicable Terms
Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors and
said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Underwritten
Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.

Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified
times of day refer to New York City time.

Section 14. Counterparts. This Agreement and the
applicable Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the
executed counterparts shall constitute a single instrument.

38


If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counter-
part hereof, whereupon this instrument, along with all counter-
parts, will become a binding agreement between you and the
Company in accordance with its terms.

Very truly yours,

KIMCO REALTY CORPORATION



By: _______________________
Name:
Title:

CONFIRMED AND ACCEPTED,
as of the date first
above written:

MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED


By: ____________________________

39

Exhibit A



KIMCO REALTY CORPORATION
(a Maryland Corporation)

[Title of Securities]

TERMS AGREEMENT


Dated: , 199_


To: Kimco Realty Corporation
1044 Northern Boulevard
Roslyn, New York 11576

Attention: Chairman of the Board of Directors

Dear Sirs:

We (the "Representative") understand that Kimco Realty
Corporation, a Maryland corporation (the "Company"), proposes to
issue and sell the number of shares of its [Common Stock, $.01
par value (the "Common Stock")] [ Warrants (the
"Common Stock Warrants") to purchase shares of Common
Stock (the "Warrant Securities")] [Preferred Stock, $1.00 par
value (the "Preferred Shares")] [interests in Preferred Shares in
the form of depositary shares (the "Depositary
Shares") represented by depositary receipts (the "Depositary
Receipts")] (such [Common Stock] [Common Stock Warrants]
[Preferred Shares] [Depositary Shares and Depositary Receipts]
being collectively hereinafter] [also] referred to as the
"Underwritten Securities"). Subject to the terms and conditions
set forth or incorporated by reference herein, the underwriters
named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective numbers of [Initial Underwritten
Securities (as defined in the Underwriting Agreement referenced
to below)] [and] [Common Stock Warrants] set forth below opposite
their respective names, and a proportionate share of Option
Securities (as defined in the Underwriting Agreement referred to
below) to the extent any are purchased) at the purchase price set
forth below.


A-1


Number of Shares Number of
of Initial Common Stock
Underwriter Underwritten Securities Warrants




__________ __________
Total $ $
__________ __________
__________ __________


The Underwritten Securities shall have the following terms:

[Common Stock] [Preferred Shares] [Depositary Shares]

Title of Securities:
Number of Shares:
[If applicable, fractional amount of Preferred Shares represented
by each Depositary Share:]
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated
dividends, if any, from , 19 .]
Purchase price per share: $ [, plus accumulated dividends,
if any, from , 19 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:


Common Stock Warrants

Number of Common Stock Warrants to be issued:
Warrant Agent:
Issuable jointly with Common Stock: [Yes] [No]
[Number of Common Stock Warrants issued
with each share of
Common Stock:]
[Detachable data:]

Date from which Common Stock Warrants are exercisable:
Date on which Common Stock Warrants expire:
Exercise price(s) of Common Stock Warrants:
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
Principal amount purchasable upon exercise of one Common Stock Warrant:


A-2



Interest rate: Payable:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
[Delayed Delivery Contracts: [authorized] [not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]]

All the provisions contained in the document attached as
Annex A hereto entitled "Kimco Realty Corporation-Common Stock,
Warrants to Purchase Common Stock, Preferred Stock and Depositary
Shares-Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.

Please accept this offer no later than o'clock P.M. (New
York City time) on by signing a copy of this Terms
Agreement in the space set forth below and returning the signed
copy to us.

Very truly yours,

MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By _________________________

Acting on behalf of itself and
the other named Underwriters.


Accepted:

KIMCO REALTY CORPORATION


By _________________________
Name:
Title:



A-3


Exhibit B


KIMCO REALTY CORPORATION
(a Maryland corporation)

[Title of Securities]

DELAYED DELIVERY CONTRACT



, 199_


Kimco Realty Corporation
1044 Northern Boulevard
Roslyn, New York 11576

Attention: Chairman of the Board of Directors

Dear Sirs:

The undersigned hereby agrees to purchase from Kimco Realty
Corporation (the "Company"), and the Company agrees to sell to
the undersigned on __________, 19__ (the "Delivery Date"),

of the Company's [insert title of security] (the "Securities"),
offered by the Company's Prospectus dated __________, 19__, as
supplemented by its Prospectus Supplement dated ___________,
19__, receipt of which is hereby acknowledged at a purchase price
of [$__________] [and, $__________ per Warrant, respectively] to
the Delivery Date, and on the further terms and conditions set
forth in this contract.

Payment for the Securities which the undersigned has agreed
to purchase on the Delivery Date shall be made to the Company or
its order by certified or official bank check in New York
Clearing House funds at the office of

, on the Delivery Date, upon delivery
to the undersigned of the Securities to be purchased by the
undersigned in definitive form and in such denominations and
registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not
less than five full business days prior to the Delivery Date.

The obligation of the undersigned to take delivery of and
make payment for Securities on the Delivery Date shall be subject
only to the conditions that (1) the purchase of Securities to be


B-1



made by the undersigned shall not on the Delivery Date be
prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before
__________, 19__, shall have sold to the Underwriters of the
Securities (the "Underwriters") such principal amount of the
Securities as is to be sold to them pursuant to the Terms
Agreement dated __________, 19__ between the Company and the
Underwriters. The obligation of the undersigned to take delivery
of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments
for Securities pursuant to other contracts similar to this
contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the
undersigned is subject and which govern such investment.

Promptly after completion of the sale to the Underwriters,
the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied by a
copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.

By the execution hereof, the undersigned represents and
warrants to the Company that all necessary corporate action for
the due execution and delivery of this contract and the payment
for and purchase of the Securities has been taken by it and no
further authorization or approval of any governmental or other
regulatory authority is required for such execution, delivery,
payment or purchase, and that, upon acceptance hereof by the
Company and mailing or delivery of a copy as provided below, this
contract will constitute a valid and binding agreement of the
undersigned in accordance with its terms.

This contract will inure to the benefit of and binding upon
the parties hereto and their respective successors, but will not
be assignable by either party hereto without the written consent
of the other.

It is understood that the Company will not accept Delayed
Delivery Contracts for a number of Securities in excess of
________ and that the acceptance of any Delayed Delivery Contract
is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If
this contract is acceptable to the Company, it is requested that
the Company sign the form of acceptance on a copy hereof and mail
or deliver a signed copy hereof to the undersigned at its address
set forth below. This will become a binding contract between the
Company and the undersigned when such copy is so mailed or
delivered.


B-2



This Agreement shall be governed by the laws of the State of
New York.

Yours very truly,

_____________________________
(Name of Purchaser)

By___________________________
(Title)

_____________________________

_____________________________
(Address)

Accepted as of the date first above written.

KIMCO REALTY CORPORATION

By___________________________
(Title)


PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING


The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may
be discussed are as follows: (Please print.)


Telephone No.
(including
Name Area Code)
---- -------------





B-3