Exhibit 10.6


                               AMENDMENT AGREEMENT

         AMENDMENT AGREEMENT (the "Agreement") dated as of October 5, 1998, by
and between CarrAmerica Realty Corporation (the "Company") and Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"). Reference is made herein to the
Purchase Agreement and the Purchase Price Adjustment Agreement, each dated as of
April 2, 1998, by and between the Company and MLPF&S (the "Purchase Agreement,"
and the "Adjustment Agreement," respectively) and the Amendment Agreement, dated
as of June, 1998 (the "First Amendment Agreement"), by and between the Company
and the MLPF&S. Capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Adjustment Agreement and the Purchase Agreement.

         WHEREAS, pursuant to Section 5 of the Adjustment Agreement, as amended
by Section 1 of the Amendment Agreement, MLPF&S holds cash collateral of the
Company totaling $39,379,721.01 (the "Cash Collateral") in a collateral account
at MLPF&S (the "Collateral Account"); and

         WHEREAS, the parties desire to provide that (i) the Cash Collateral be
paid to MLPF&S in partial satisfaction of the Company's obligations to MLPF&S
under the Adjustment Agreement, (ii) the Reference Price be reduced to reflect
such payment (iii), subject to the terms and conditions hereof, the Company
deliver the Interim Settlement Amount on a biweekly basis and (iv) the schedule
of Termination Prices and corresponding Percentages of Adjustment Shares in
Section 4.1 of the Adjustment Agreement be revised as set forth herein;

         NOW, THEREFORE, in consideration of the mutual undertakings herein set
forth, the parties intending to be legally bound, hereby agree as follows:

1.   The Company authorizes MLPF&S to transfer the Cash Collateral from the
     Collateral Account to MLPF&S on the date of this Agreement as payment for
     the reduction of the Reference Price.

2.   In order to effect the reduction of the Reference Price, the Distribution
     Amount, as calculated pursuant to Section 1(k) of the Adjustment Agreement,
     shall be deemed to include a distribution of $7.876 per Common Share as of
     the date hereof.

3.   Within three days following October 6, 1998 and within three days following
     each second Tuesday thereafter (or, if any such day is not a Business Day,
     the next Business Day) (each such day a "Biweekly Delivery Date"), until
     the number of Adjustment Shares has been reduced to zero, the Company shall
     deliver the Interim Settlement Amount in cash to MLPF&S for deposit in the
     Collateral Account or, if applicable, MLPF&S shall release any cash in
     excess of the Interim Settlement Amount to the Company; provided however,
     that if the Closing Price on any Exchange Trading is below $21.00, the
     Company shall deliver the Interim Settlement Amount in cash to MLPF&S or,
     if applicable, MLPF&S shall release any cash in excess of the Interim
     Settlement Amount to the Company within three days following each Tuesday
     thereafter (or, if any such day is not a Business Day, the next Business
     Day) (each such day a, "Weekly Delivery Date"), until the Closing Price is
     equal to or greater than the Reference Price for three consecutive Exchange
     Trading Days, in which case the Company shall resume delivery of the
     Interim Settlement Amount on each Biweekly Delivery Date unless and until
     the Closing Price is subsequently below $21.00.

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4.  Solely for purposes of calculation of the Interim Settlement Amount, each
    Biweekly Delivery Date and each Weekly Delivery Date shall be deemed a
    Reset Date.

5.  The schedule of Termination Prices and corresponding Percentages of
    Adjustment Shares to be Settled in Section 4.1 of the Adjustment Agreement
    is hereby amended to read as follows:

    Percentage of Adjustment
      Shares to be Settled                              Termination Price
      --------------------                              -----------------
               25%                                            $21.00
               50%                                            $19.50
              100%                                            $18.00


6.  MLPF&S agrees that it presently has no right and shall not have any right to
    settle Adjustment Shares pursuant to Section 4.1 of the Adjustment
    Agreement, as hereby amended, until the Closing Price on any Exchange
    Trading Day subsequent to the date hereof falls below the Termination Prices
    listed above.

7.  Except as hereby amended, the Adjustment Agreement, as amended by the First
    Amendment Agreement, shall remain in full force and effect.



<PAGE>



         IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first above written.



                                  MERRILL LYNCH, PIERCE, FENNER & SMITH
                                  INCORPORATED


                                  By:                                         
                                    ------------------------------------
                                     Name: Dean D'Onofrio
                                     Title: Managing Director


                                  CARRAMERICA REALTY CORPORATION


                                  By:
                                     ------------------------------------
                                     Name: Brian K. Fields
                                     Title: Chief Financial Officer