Amendment to letter confirmation dated April 4, 2007



 Exhibit 10.3 
 April 4, 2007 
  

	To:	Kilroy Realty, L.P. 

 12200 W. Olympic Boulevard,
Suite 200 
 Los Angeles, California 90064 
 Attention: Richard E. Moran 
         EVP and CFO 
 Telephone No.:  (310) 481-8400 
 Facsimile No.:   (310) 481-6500 
  

	From:	Lehman Brothers Inc., acting as Agent 

 Lehman Brothers OTC
Derivatives Inc., acting as Principal 
 Attention: Transaction Management Group 
 Telephone:  (212) 526-9986 
 Facsimile:   (646) 885-9546 
 Re: Capped Call Transaction (Global ID: 2963353) Amendment 
 The purpose of this letter agreement (the “Amendment”) is to amend the terms and conditions of the call option (the
“Transaction”) entered into among Lehman Brothers OTC Derivatives Inc. (“Lehman”) represented by Lehman Brothers Inc. (“Agent”) as its agent, Kilroy Realty, L.P. (“Counterparty”)
and Kilroy Realty Corporation (“Parent”) pursuant to a letter agreement (the “Confirmation”) dated March 27, 2007, pursuant to which Counterparty and Parent purchased from Lehman a Number of Options equal to
133,333 in connection with the issuance by Counterparty of $400,000,000 principal amount of 3.250% Exchangeable Senior Notes due 2012 (the “Initial Exchangeable Notes”) under the Indenture to be dated April 2, 2007 among
Counterparty, Parent, as guarantor, and U.S. Bank National Association, as trustee. This Amendment relates to, and sets forth the terms of, the purchase by Counterparty from Lehman of an additional number of Options (the “Additional Number
of Options”) in connection with the issuance by Counterparty of an additional $60,000,000 principal amount of 3.250% Exchangeable Senior Notes due 2012 (the “Additional Exchangeable Notes” and, together with the Initial
Exchangeable Notes, the “Exchangeable Notes”) to the initial purchasers of the Exchangeable Notes as a result of their exercise of the right granted with respect to such Additional Exchangeable Notes pursuant to the Purchase
Agreement dated March 27, 2007. This amendment is sent on behalf of both Lehman and Agent. Lehman Brothers OTC Derivatives Inc. is not a member of the Securities Investor Protection Corporation. 
 Upon the effectiveness of this Amendment, all references to “Number of Options” and “Transaction” in the Confirmation, as amended,
will include the Additional Number of Options purchased by Counterparty and Parent pursuant to the terms set forth below, all references to “Exchangeable Notes” will include the Additional Exchangeable Notes and, except to the extent
specified below, all other provisions of the Confirmation shall apply to the Additional Number of Options as if such Additional Number of Options were originally subject to the Confirmation. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Confirmation. 
 Amendments. The terms relating to the purchase of the Additional Number of Options are as
follows: 
 1. The “Trade Date” with respect to the Additional Number of Options will be April 4, 2007. 
 2. The “Number of Options” for the Transaction will be “153,333” reflecting an addition of 20,000 Additional Number of Options. 
 3. An additional “Premium” to be determined by the Calculation Agent will be payable by the Counterparty to Lehman in respect of the Additional Number
of Options (the “Additional Call Option Premium”) on a Currency Business Day to be specified by the Calculation Agent (such date, the “Additional Call Option Premium Payment Date”), by written notice to the
Counterparty in substantially the form of the pricing supplement set forth in Exhibit A hereto (the “Pricing Supplement”) no later than one Currency Business Day prior to the Additional Call Option Premium Payment Date. 







 4. Repeated Representations. Counterparty and Parent hereby repeat the representations, warranties and agreements
contained in the Confirmation with respect to the Amendment or with respect to the Confirmation, as amended by the Amendment, as the context requires. 
 5.
Rule 10b-18. The Counterparty further represents that, except as disclosed in writing by the Counterparty or Parent to Lehman or as described in the offering memorandum relating to the Exchangeable Notes, neither the Counterparty, Parent nor
any of their affiliated purchasers have purchased any Shares (as contemplated by Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) during each of the four calendar weeks preceding the date
hereof. The Counterparty and Parent further covenant and agree that neither it nor any of its affiliated purchasers will purchase any Shares prior to the earlier of the Additional Call Option Premium Payment Date and the Early Unwind Date (as
defined below). 
 6. Conditionality and Early Unwind. The respective obligations of the parties hereunder shall become final and binding only if no
Early Unwind Event (as defined below) shall have occurred and be continuing as of the Early Unwind Date (as defined below). Notwithstanding the foregoing, the Counterparty, Parent and Lehman, intending to be legally bound, hereby acknowledge and
agree that in the event that an Early Unwind Event has occurred and is continuing on the Early Unwind Date, Lehman or one or more of its affiliates, shall terminate its hedging activities with respect to the portion of the Transaction contemplated
by this Amendment on the Early Unwind Date and each party shall be released and discharged by the other parties from, and agrees not to make any claim against the other parties with respect to, any obligations or liabilities of the other parties
arising out of and to be performed in connection with such portion of the Transaction; provided that, if such Early Unwind Event results from a breach by the Counterparty or Parent of any representation of or any undertaking by the
Counterparty or Parent, as applicable, contained in the Purchase Agreement and relating to the issuance by the Counterparty of the Additional Exchangeable Notes, the Counterparty or Parent shall purchase from Lehman on the Early Unwind Date any
Shares purchased by Lehman or one or more of its affiliates in connection with the portion of the Transaction contemplated by this Amendment and reimburse Lehman for any costs or expenses (including market losses) relating to the unwinding of its
reasonable hedging activities in connection with such portion of the Transaction (including any losses or costs incurred as a result of its terminating, liquidating, obtaining or reestablishing any reasonable hedge or related trading position). The
amount of any such reimbursement shall be determined by Lehman in its reasonable good faith discretion. Lehman shall notify the Counterparty and Parent of such amount, including, upon the Counterparty’s or Parent’s request, an explanation
of the basis of determination of such amount, and the Counterparty or Parent shall pay such amount in immediately available funds on the Early Unwind Date. 
 For purposes of the foregoing: (i) an “Early Unwind Event” means (a) the failure to close the Additional Exchangeable Notes issuance by the Early Unwind Date for any reason whatsoever or (b) the failure of
the Counterparty or Parent to comply with any representations, warranties or undertakings contained in this Amendment; and (ii) an “Early Unwind Date” means the later of (i) April 11, 2007 (or such later date as
agreed upon by the parties) or (ii) the Additional Call Option Premium Payment Date. 
 7. No Additional Amendments or Waivers. Except as amended
hereby, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects. 
 8. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same
instrument. 
 9. Governing Law. The provisions of this Amendment shall be governed by the New York law (without reference to choice of law doctrine).








 Counterparty and Parent hereby agree (a) to check this Amendment carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Lehman) correctly sets forth the terms of the agreement between Lehman, Counterparty and
Parent with respect to the Transaction, by manually signing this Amendment or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy via facsimile to
646-885-9546. 
  

					
	Yours faithfully,
	
	Lehman Brothers OTC Derivatives Inc.
		
	By:	 	/s/ Anatoly Kozlov
		 	Name:	 	Anatoly Kozlov
		 	Title:	 	Authorized Signatory


 Accepted and confirmed 
 as of the Trade Date: 
 Kilroy Realty, L.P. 
  

							
	By	 	Kilroy Realty Corporation
		 	its General Partner
			
		 	By:	 	/s/ Tyler Rose
		 		 	Name:	 	Tyler Rose
		 		 	Title:	 	SVP & Treasurer

  

							
			
		 	By:	 	/s/ Heidi R. Roth
		 		 	Name:	 	Heidi R. Roth
		 		 	Title:	 	Senior Vice President and Controller

 Kilroy Realty Corporation 
  


							
			
		 	By:	 	/s/ Tyler Rose
		 		 	Name:	 	Tyler Rose
		 		 	Title:	 	SVP & Treasurer

  

							
			
		 	By:	 	/s/ Heidi R. Roth
		 		 	Name:	 	Heidi R. Roth
		 		 	Title:	 	Senior Vice President and Controller








 EXHIBIT A 
 PRICING SUPPLEMENT 
 April [    ], 2007 
  

	To:	Kilroy Realty, L.P. 

 12200 W. Olympic Boulevard,
Suite 200 
 Los Angeles, California 90064 
 Attention: Richard E. Moran 
         EVP and CFO 
 Telephone No.:  (310) 481-8400 
 Facsimile No.:   (310) 481-6500 
  

	From:	Lehman Brothers Inc., acting as Agent 

 Lehman Brothers OTC
Derivatives Inc., acting as Principal 
 Attention: Transaction Management Group 
 Telephone:  (212) 526-9986 
 Facsimile:   (646) 885-9546 
 Mr. Moran: 
 This letter is a Pricing Supplement within the meaning of the letter of amendment dated as of April 4, 2007 (the “Amendment”) to the confirmation letter dated as of March 27, 2007 (the
“Confirmation”) among Lehman Brothers OTC Derivatives Inc. represented by Lehman Brothers Inc. as its agent, Kilroy Realty, L.P. and Kilroy Realty Corporation. Capitalized terms used herein have the meanings set forth in the
Confirmation. 
 This Pricing Supplement relates to the portion of the Transaction described in the Amendment. Upon the terms and subject to
the conditions of the Amendment, certain terms shall be as follows: 
  

			
	1. Additional Call Option Premium:	  	[__________]
	2. Additional Call Option Premium Payment Date:	  	[__________]

 Very truly yours, 
  

			
	Lehman Brothers OTC Derivatives Inc.
		
	By:	 	  
		 	Name:
		 	Title:


 Accepted and confirmed 
 as of the Trade Date: 
 Kilroy Realty, L.P. 
  

					
	By	 	Kilroy Realty Corporation
		 	its General Partner
			
		 	By:	 	  
		 		 	Name:
		 		 	Title:

  

					
			
		 	By:	 	  
		 		 	Name:
		 		 	Title:








 Kilroy Realty Corporation 
  

					
			
		 	By:	 	  
		 		 	Name:
		 		 	Title:

  

					
			
		 	By:	 	  
		 		 	Name:
		 		 	Title: