Document:

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                                                                    Exhibit 10.2

                               GUARANTY OF PAYMENT
                               -------------------

                  GUARANTY OF PAYMENT (this "Guaranty"), made as of June 28,
                                             --------
2001, by CARRAMERICA REALTY L.P., having an address at 1850 K Street, N.W.
Washington, D.C. 20006 ("Guarantor"), in favor of THE CHASE MANHATTAN BANK, as
                         ---------
administrative agent ("Administrative Agent") on behalf of the banks (the
                       --------------------
"Banks") listed on the signature pages of the Revolving Credit Agreement (as the
 -----
same may be amended, modified, supplemented or restated, the "Credit
                                                              ------
Agreement"), dated as of the date hereof, among CarrAmerica Realty Corporation,
---------
as borrower ("Borrower"), Administrative Agent and the Banks listed therein
              --------

                              W I T N E S S E T H:

                  WHEREAS, the Banks have agreed to make loans to Borrower, on a
revolving credit facility, in the aggregate principal amount not to exceed Five
Hundred Million Dollars ($500,000,000) at any one time outstanding (hereinafter
collectively referred to as the "Loans");
                                 -----

                  WHEREAS, the Loans are evidenced by certain promissory notes
(the "Notes") of Borrower made to each of the Banks or Designated Lenders, as
      -----
applicable, in accordance with the terms of the Credit Agreement;

                  WHEREAS, the Credit Agreement and the Notes and any other
documents executed in connection therewith are hereinafter collectively referred
to as the "Loan Documents";
           --------------

                  WHEREAS, capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Credit Agreement;

                  WHEREAS, Borrower owns, directly or indirectly, no less than
ninety percent (90%) of the ownership interests of Guarantor; and

                  WHEREAS, as a condition to the execution and delivery of the
Loan Documents and the extension of credit to the Borrower pursuant to the Loan
Documents, the Banks have required that Guarantor execute and deliver this
Guaranty.

                  NOW THEREFORE, in consideration of the premises and the
benefits to be derived from the making of the Loans by the Banks to Borrower,
and in order to induce the Administrative Agent and the Banks to enter into the
Credit Agreement and the other Loan Documents, the Guarantor hereby agrees as
follows:

                  1.       Guarantor, on behalf of itself and its successors and
assigns, hereby irrevocably, absolutely and unconditionally guarantees the full
and punctual payment when due, whether at stated maturity or otherwise, of all
Obligations of Borrower now or hereafter existing under the Notes and the Credit
Agreement, for principal and/or interest as well as any and all other amounts
due thereunder, including, without limitation, all indemnity obligations of
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Borrower thereunder, and any and all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) incurred by
the Administrative Agent or the Banks in enforcing their rights under this
Guaranty and collecting all sums owing under the Loan Documents (all of the
foregoing obligations being the "Guaranteed Obligations").
                                 ----------------------

                  2.       It is agreed that the Guaranteed Obligations of
Guarantor hereunder shall be enforceable against Guarantor and its successors
and assigns without the necessity for any suit or proceeding of any kind or
nature whatsoever brought by the Administrative Agent or any of the Banks
against Borrower or its respective successors or assigns or any other party or
against any security for the payment and performance of the Guaranteed
Obligations (this Guaranty being a guaranty of payment and not simply a guaranty
of collection) and without the necessity of any notice of nonpayment or
nonobservance or of any notice of acceptance of this Guaranty or of any notice
or demand to which Guarantor might otherwise be entitled (including, without
limitation, diligence, presentment, notice of maturity, extension of time,
change in nature or form of the Guaranteed Obligations, acceptance of further
security, release of further security, imposition or agreement arrived at as to
the amount of or the terms of the Guaranteed Obligations, notice of adverse
change in Borrower's financial condition and any other fact which might
materially increase the risk to Guarantor), all of which Guarantor hereby
expressly waives; and Guarantor hereby expressly agrees that the validity of
this Guaranty and the obligations of Guarantor hereunder shall in no way be
terminated, affected, diminished, modified or impaired by reason of the
assertion of or the failure to assert by the Administrative Agent or any of the
Banks against Borrower or its respective successors or assigns, any of the
rights or remedies reserved to the Administrative Agent or any of the Banks
pursuant to the provisions of the Loan Documents. Guarantor agrees that any
notice or directive given at any time to the Administrative Agent or any of the
Banks which is inconsistent with the waiver in the immediately preceding
sentence shall be void and may be ignored by the Administrative Agent and the
Banks, and, in addition, may not be pleaded or introduced as evidence in any
litigation relating to this Guaranty for the reason that such pleading or
introduction would be at variance with the written terms of this Guaranty.
Guarantor specifically acknowledges and agrees that the foregoing waivers are of
the essence of this transaction and that, but for this Guaranty and such
waivers, the Administrative Agent and the Banks would have declined to execute
and deliver the Loan Documents.

                  3.       Guarantor waives, and covenants and agrees that, it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any and all appraisal, valuation, stay,
extension, marshalling-of-assets or redemption laws, or right of homestead or
exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantor of its obligations
under, or the enforcement by the Administrative Agent or any of the Banks of,
this Guaranty. Guarantor further covenants and agrees not to set up or claim any
defense, counterclaim, offset, setoff or other objection of any kind to any
action, suit or proceeding in law, equity or otherwise, or to any demand or
claim that may be instituted or made by the Administrative Agent or any of the
Banks other than the defense of the actual timely payment and performance by
Borrower of the

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<PAGE>

Guaranteed Obligations hereunder; provided, however, that the foregoing shall
not be deemed a waiver of Guarantor's right to assert any compulsory
counterclaim, if such counterclaim is compelled under local law or rule of
procedure. Guarantor represents, warrants and agrees that, as of the date
hereof, its obligations under this Guaranty are not subject to any
counterclaims, offsets or defenses against the Administrative Agent or any Bank
of any kind.

                  4.       The provisions of this Guaranty are for the benefit
of the Administrative Agent and the Banks and their successors, participants and
permitted assigns (including, but not limited to, any Designated Lenders), and
nothing herein contained shall impair as between Borrower and the Administrative
Agent and the Banks the obligations of Borrower under the Loan Documents.

                  5.       This Guaranty shall be a continuing, unconditional
and absolute guaranty and the liability of Guarantor hereunder shall in no way
be terminated, affected, modified, impaired or diminished by reason of the
happening, from time to time, of any of the following, although without notice
or the further consent of Guarantor:

                  (a)      any assignment, amendment, modification or waiver of
         or change in any of the terms, covenants, conditions or provisions of
         any of the Guaranteed Obligations or the Loan Documents or the
         invalidity or unenforceability of any of the foregoing; or

                  (b)      any extension of time that may be granted by the
         Administrative Agent to Borrower, any guarantor, or their respective
         successors or assigns, heirs, executors, administrators or personal
         representatives; or

                  (c)      any action which the Administrative Agent may take or
         fail to take under or in respect of any of the Loan Documents or by
         reason of any waiver of, or failure to enforce any of the rights,
         remedies, powers or privileges available to the Administrative Agent
         under this Guaranty or available to the Administrative Agent at law,
         equity or otherwise, or any action on the part of the Administrative
         Agent granting indulgence or extension in any form whatsoever; or

                  (d)      any sale, exchange, release, or other disposition of
         any property pledged, mortgaged or conveyed, or any property in which
         the Administrative Agent and/or the Banks have been granted a lien or
         security interest to secure any indebtedness of Borrower to the
         Administrative Agent and/or the Banks; or

                  (e)      any release of any person or entity who may be liable
         in any manner for the payment and collection of any amounts owed by
         Borrower to the Administrative Agent and/or the Banks; or

                  (f)      the application of any sums by whomsoever paid or
         however realized to any amounts owing by Borrower to the Administrative
         Agent and/or the Banks under the

                                       3
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         Loan Documents in such manner as the Administrative Agent shall
         determine in its sole discretion; or

                  (g)      Borrower's or any guarantor's voluntary or
         involuntary liquidation, dissolution, sale of all or substantially all
         of their respective assets and liabilities, appointment of a trustee,
         receiver, liquidator, sequestrator or conservator for all or any part
         of Borrower's or any guarantor's assets, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment, or the commencement of other similar
         proceedings affecting Borrower or any guarantor or any of the assets of
         any of them, including, without limitation, (i) the release or
         discharge of Borrower or any guarantor from the payment and performance
         of their respective obligations under any of the Loan Documents by
         operation of law, or (ii) the impairment, limitation or modification of
         the liability of Borrower or any guarantor in bankruptcy, or of any
         remedy for the enforcement of the Guaranteed Obligations under any of
         the Loan Documents, or Guarantor's liability under this Guaranty,
         resulting from the operation of any present or future provisions of the
         Bankruptcy Code or other present or future federal, state or applicable
         statute or law or from the decision in any court; or

                  (h)      any improper disposition by Borrower of the proceeds
         of the Loans, it being acknowledged by Guarantor that the
         Administrative Agent or any Bank shall be entitled to honor any request
         made by Borrower for a disbursement of such proceeds and that none of
         the Administrative Agent nor any Bank shall have any obligation to see
         the proper disposition by Borrower of such proceeds; or

                  (i)      any issuance of new or replacement Notes.

                  6.       Guarantor agrees that if at any time all or any part
of any payment at any time received by the Administrative Agent from Borrower or
Guarantor under or with respect to this Guaranty is or must be rescinded or
returned by the Administrative Agent or any Bank for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
Borrower or Guarantor), then Guarantor's obligations hereunder shall, to the
extent of the payment rescinded or returned, be deemed to have continued in
existence notwithstanding such previous receipt by such party, and Guarantor's
obligations hereunder shall continue to be effective or reinstated, as the case
may be, as to such payment, as though such previous payment had never been made.

                  7.       Until this Guaranty is terminated pursuant to the
terms hereof, Guarantor (i) shall have no right of subrogation against Borrower
or any entity comprising same by reason of any payments or acts of performance
by Guarantor in compliance with the obligations of Guarantor hereunder, (ii)
waives any right to enforce any remedy which Guarantor now or hereafter shall
have against Borrower or any entity comprising same by reason of any one or more
payment or acts of performance in compliance with the obligations of Guarantor
hereunder and (iii) from and after an Event of Default (as defined in the Credit
Agreement), subordinates any liability or indebtedness of Borrower or any entity
comprising same now or hereafter held by

                                       4
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Guarantor or any affiliate of Guarantor to the obligations of Borrower under the
Loan Documents.

                  8.       Guarantor represents and warrants to the
Administrative Agent and the Banks with the knowledge that the Administrative
Agent and the Banks are relying upon the same, as follows:

                  (a)       as of the date hereof, Borrower owns, either
         directly or indirectly, no less than 88% of the equity interests of
         Guarantor;

                  (b)      based upon such relationship, Guarantor has
         determined that it is in its best interests to enter into this
         Guaranty;

                  (c)      this Guaranty is necessary and convenient to the
         conduct, promotion and attainment of Guarantor's business, and is in
         furtherance of Guarantor's business purposes;

                  (d)      the benefits to be derived by Guarantor from
         Borrower's access to funds made possible by the Loan Documents are at
         least equal to the obligations undertaken pursuant to this Guaranty;

                  (e)      Guarantor is duly organized, validly existing and in
         good standing as a limited partnership under the laws of the State of
         Delaware and has all powers and all material governmental licenses,
         authorizations, consents and approvals required to own its property and
         assets and carry on its business as now conducted or as it presently
         proposes to conduct and has been duly qualified and is in good standing
         in every jurisdiction in which the failure to be so qualified and/or in
         good standing is likely to have a Material Adverse Effect;

                  (f)      Guarantor's sole general partner is CarrAmerica
         Realty GP Holdings, Inc., a Delaware corporation ("General Partner"), a
         wholly owned Subsidiary of Borrower;

                  (g)      General Partner is duly organized, validly existing
         and in good standing as a corporation under the laws of the State of
         Delaware and has all powers and all material governmental licenses,
         authorizations, consents and approvals required to own its property and
         assets and carry on its business as now conducted or as it presently
         proposes to conduct and has been duly qualified and is in good standing
         in every jurisdiction in which the failure to be so qualified and/or in
         good standing is likely to have a Material Adverse Effect;

                  (h)      Guarantor has the partnership power and authority to
         execute, deliver and carry out the terms and provisions of each of this
         Guaranty and has taken all necessary action to authorize the execution
         and delivery on behalf of Guarantor and the performance by Guarantor of
         the Guaranty;

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                  (i)      Guarantor has duly executed and delivered the
         Guaranty, and the Guaranty constitutes the legal, valid and binding
         obligation of Guarantor enforceable in accordance with its terms,
         except as enforceability may be limited by applicable insolvency,
         bankruptcy or other laws affecting creditors rights generally, or
         general principles of equity, whether such enforceability is considered
         in a proceeding in equity or at law;

                  (j)      neither the execution, delivery or performance by or
         on behalf of Guarantor of this Guaranty, nor compliance by Guarantor
         with the terms and provisions thereof nor the consummation of the
         transactions contemplated by the Guaranty, (i) will contravene any
         applicable provision of any law, statute, rule, regulation, order,
         writ, injunction or decree of any court or governmental instrumentality
         or (ii) will conflict with or result in any breach of, any of the
         terms, covenants, conditions or provisions of, or constitute a default
         under, or result in the creation or imposition of (or the obligation to
         create or impose) any Lien upon any of the property or assets of
         Guarantor pursuant to the terms of any indenture, mortgage, deed of
         trust, or other agreement or other instrument to which Guarantor(or of
         any partnership of which Guarantor is a partner) is a party or by which
         it or any of its property or assets is bound or to which it is subject
         or (iii) will cause a default by Guarantor under any organizational
         document of any Subsidiary, or cause a default under Guarantor's
         agreement of limited partnership;

                  (k)      there is no action, suit or proceeding pending
         against, or to the knowledge of Guarantor, threatened against or
         affecting, (i) Guarantor or any of its Subsidiaries, (ii) the Loan
         Documents or any of the transactions contemplated by the Loan Documents
         or (iii) any of its assets, in any case before any court or arbitrator
         or any governmental body, agency or official in which there is a
         reasonable likelihood of an adverse decision which could, individually
         or in the aggregate, have a Material Adverse Effect or which in any
         manner draws into question the validity of this Agreement or the other
         Loan Documents.;

                  (l)      there are no final nonappealable judgments or decrees
         in an aggregate amount of Five Million Dollars ($5,000,000) or more
         entered by a court or courts of competent jurisdiction against
         Guarantor (other than any judgment as to which, and only to the extent,
         a reputable insurance company has acknowledged coverage of such claim
         in writing);

                  (m)      in the ordinary course of its business, Guarantor
         reviews the effect of Environmental Laws on the business, operations
         and properties of Guarantor and its subsidiaries in the course of which
         they identify and evaluate associated liabilities and costs (including,
         without limitation, any capital or operating expenditures required for
         clean-up or closure of properties presently or previously owned, any
         capital or operating expenditures required to achieve or maintain
         compliance with environmental protection standards imposed by law or as
         a condition of any license, permit or contract, any related constraints
         on operating activities, including any periodic or permanent shutdown
         of any facility or reduction in the level of or change in the nature of
         operations conducted thereat, any costs or liabilities in connection
         with off-site disposal of wastes or Hazardous

                                       6
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         Substances, and any actual or potential liabilities to third parties,
         including employees, and any related costs and expenses); on the basis
         of this review, Guarantor has reasonably concluded that such associated
         liabilities and costs, including the costs of compliance with
         Environmental Laws, are unlikely to have a Material Adverse Effect;

                  (n)      the initial tax year of Guarantor for federal income
         tax purposes was 1996;

                  (o)      General Partner, Guarantor and their respective
         Subsidiaries have filed all United States Federal income tax returns
         and all other material tax returns which are required to be filed by
         them and have paid all taxes due pursuant to such returns or pursuant
         to any assessment received by General Partner, Guarantor or any
         Subsidiary; the charges, accruals and reserves on the books of General
         Partner, Guarantor and their Subsidiaries in respect of taxes or other
         governmental charges are, in the opinion of the Guarantor, adequate;

                  (p)      all information heretofore furnished by or on behalf
         of Guarantor to the Administrative Agent or any Bank for purposes of or
         in connection with this Guaranty or the Credit Agreement or any
         transaction contemplated hereby is true and accurate in all material
         respects on the date as of which such information is stated or
         certified;

                  (q)      Guarantor has disclosed to the Banks in writing any
         and all facts known to Guarantor which materially and adversely affect
         or are likely to materially and adversely affect (to the extent the
         Guarantor can now reasonably foresee), the business, operations or
         financial condition of Guarantor considered as one enterprise or the
         ability of the Guarantor to perform its obligations under this
         Guaranty;

                  (r)      on the Closing Date and after giving effect to the
         transactions contemplated by the Loan Documents occurring on the
         Closing Date, Guarantor is Solvent;

                  (s)      no order, consent, approval, license, authorization,
         or validation of, or filing, recording or registration with, or
         exemption by, any governmental or public body or authority, or any
         subdivision thereof, is required to authorize, or is required in
         connection with the execution, delivery and performance of the Guaranty
         or the consummation of any of the transactions contemplated thereby
         other than those that have already been duly made or obtained and
         remain in full force and effect;

                  (t)      Guarantor is not (x) an "investment company" or a
                                                    ------------------
         company "controlled" by an "investment company", within the meaning of
                  ----------         ------------------
         the Investment Company Act of 1940, as amended, (y) a "holding company"
                                                                ---------------
         or a "subsidiary company" of a "holding company" or an "affiliate" of
               ------------------        ---------------         ---------
         either a "holding company" or a "subsidiary company" within the meaning
                   ---------------        ------------------
         of the Public Utility Holding Company Act of 1935, as amended, or (z)
         subject to any other federal or state law or regulation which purports
         to restrict or regulate its ability to borrow money;

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<PAGE>

                  (u)      as of the Closing Date, all consents and approvals
         of, and filings and registrations with, and all other actions by, any
         Person required in order to make or consummate such transactions have
         been obtained, given, filed or taken and are in full force and effect;

                  (v)      All representations and warranties made by the
         Borrower on behalf of the Guarantor in the Loan Documents have been
         reviewed by Guarantor and are true and correct in all material
         respects;

                  (w)      Guarantor has obtained and holds in full force and
         effect all patents, trademarks, service marks, trade names, copyrights
         and other such rights, free from burdensome restrictions, which are
         necessary for the operation of its business as presently conducted, the
         impairment of which is likely to have a Material Adverse Effect;

                  (x)      to the Guarantor's knowledge, no material product,
         process, method, substance, part or other material presently sold by or
         employed by Guarantor in connection with such business infringes any
         patent, trademark, service mark, trade name, copyright, license or
         other such right owned by any other Person;

                  (y)      there is not pending or, to Guarantor's knowledge,
         threatened any claim or litigation against or affecting or Guarantor
         contesting its right to sell or use any such product, process, method,
         substance, part or other material;

                  (z)      Guarantor is not in default in any material respect
         beyond any applicable grace period under or with respect to any other
         material agreement, instrument or undertaking to which it is a party or
         by which it or any of its property is bound in any respect, the
         existence of which default is likely (to the extent that Guarantor can
         now reasonably foresee) to result in a Material Adverse Effect;

                  (aa)     Guarantor has obtained and holds in full force and
         effect, all franchises, licenses, permits, certificates,
         authorizations, qualifications, accreditations, easements, rights of
         way and other consents and approvals which are necessary for the
         operation of its businesses as presently conducted, the absence of
         which is likely (to the extent that Guarantor can now reasonably
         foresee) to have a Material Adverse Effect;

                  (bb)     Guarantor is in compliance with all laws, rules,
         regulations, orders, judgments, writs and decrees, including, without
         limitation, all building and zoning ordinances and codes, the failure
         to comply with which is likely (to the extent that Guarantor can now
         reasonably foresee) to have a Material Adverse Effect;

                  (cc)     Guarantor is not a party to any agreement or
         instrument or subject to any other obligation or any charter or
         corporate or partnership restriction, as the case may be, which,
         individually or in the aggregate, is likely (to the extent that the
         Guarantor can now reasonably foresee) to have a Material Adverse
         Effect;

                                       8
<PAGE>

                  (dd)     there are no collective bargaining agreements or
         Multiemployer Plans covering the employees of Guarantor and Guarantor
         has not suffered any strikes, walkouts, work stoppages or other
         material labor difficulty within the last five (5) years;

                  (ee)     the documents delivered by Borrower pursuant to
         Section 3.1(e) of the Credit Agreement with respect to Guarantor
         constitute, as of the Closing Date, all of the organizational documents
         (together with all amendments and modifications thereof) of Guarantor;
         and

                  (ff)     the principal office, chief executive office and
         principal place of business of Guarantor is 1850 K Street, Suite 500,
         N.W., Washington, D.C. 20006.

                  9.       Subject to the terms and conditions of the Credit
Agreement, and in conjunction therewith, the Administrative Agent or any Bank
may assign any or all of its rights under this Guaranty. If the Administrative
Agent or any Bank elects to appoint a Designated Lender or sell any Loans or
participations in the Loans and the Loan Documents, including this Guaranty, the
Administrative Agent or any Bank may forward to each Designated Lender,
purchaser and prospective purchaser all documents and information relating to
this Guaranty or to Guarantor, whether furnished by Borrower or Guarantor or
otherwise.

                  10.      Guarantor agrees that it shall at all times comply
with all covenants and conditions contained in the Credit Agreement that are
applicable to Guarantor thereunder.

                  11.      Guarantor acknowledges and agrees that it has
reviewed the Credit Agreement and other Loan Documents and that Guarantor is
aware that the Credit Agreement provides funds to the Borrower on a revolving
basis and that it waives any defense Guarantor may have to this Guaranty based
upon the revolving credit facility nature of the Credit Agreement and the Loan
Documents.

                  12.      Guarantor agrees, upon the written request of the
Administrative Agent, at the sole cost and expense of Guarantor, to execute and
deliver to the Administrative Agent, from time to time, any reaffirmations,
ratifications, modifications or amendments hereto or any additional instruments
or documents reasonably considered necessary by the Administrative Agent or its
counsel to cause this Guaranty to be, become or remain valid and effective in
accordance with its terms, provided, that, any such reaffirmations,
ratifications, modifications, amendments, additional instrument or document
shall not increase Guarantor's obligations or diminish its rights hereunder and
shall be reasonably satisfactory as to form to Guarantor and to Guarantor's
counsel.

                  13.      The representations and warranties of Guarantor set
forth in this Guaranty shall survive until this Guaranty shall terminate in
accordance with the terms hereof.

                  14.      This Guaranty contains the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements relating to such subject

                                       9
<PAGE>

matter and may not be modified, amended, supplemented or discharged except by a
written agreement signed by Guarantor and the Administrative Agent.

                  15.      If all or any portion of any provision contained in
this Guaranty shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, such provision or portion thereof shall be deemed
stricken and severed from this Guaranty and the remaining provisions and
portions thereof shall continue in full force and effect.

                  16.      This Guaranty may be executed in counterparts which
together shall constitute the same instrument.

                  17.      All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party:

If to Guarantor                     1850 K Street, N.W.
                                    Washington, D.C.  20006
                                    Attn:  Steve Walsh
                                    Telephone:  (202) 729-1764
                                    Telecopy:  (202) 729-1060

With Copies of
Notices to Guarantor to:            Hogan & Hartson L.L.P.
                                    555 13th Street, N.W.
                                    Washington, D.C.  20004
                                    Attention:  J. Warren Gorrell, Jr., Esq.
                                    Telephone:  (202) 637-5600
                                    Telecopy:  (202) 637-5910

If to the
Administrative Agent:               Loan and Agency Services:

                                    One Chase Manhattan Plaza
                                    8th Floor
                                    New York, New York  10081
                                    Telecopy:  (212) 552-5701

                                    The Chase Manhattan Bank
                                    270 Park Avenue
                                    New York, New York  10017
                                    Attn:  Marc Costantino
                                    Telecopy:  (212) 270-3513

                                            and

                                       10
<PAGE>

                                    The Chase Manhattan Bank
                                    270 Park Avenue
                                    New York, New York  10017
                                    Attn:  William Viets, Esq.
                                    Telecopy:  (212) 270-2873

Each such notice, request or other communication shall be effective (i) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when delivered at the address specified in
this Section.

                  18.      Any acknowledgment or new promise, whether by payment
of principal or interest or otherwise by Borrower or Guarantor, with respect to
the Guaranteed Obligations shall, if the statute of limitations in favor of
Guarantor against the Administrative Agent shall have commenced to run, toll the
running of such statute of limitations, and if the period of such statute of
limitations shall have expired, prevent the operation of such statute of
limitations.

                  19.      This Guaranty shall be binding upon Guarantor and its
successors and assigns and shall inure to the benefit of the Administrative
Agent and the Banks and their successors and permitted assigns.

                  20.      The failure of the Administrative Agent to enforce
any right or remedy hereunder, or promptly to enforce any such right or remedy,
shall not constitute a waiver thereof, nor give rise to any estoppel against the
Administrative Agent, nor excuse Guarantor from its obligations hereunder. Any
waiver of any such right or remedy to be enforceable against the Administrative
Agent must be expressly set forth in a writing signed by the Administrative
Agent.

                  21.      (a)    THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW).

                           (b)    Any legal action or proceeding with respect to
this Guaranty and any action for enforcement of any judgment in respect thereof
may be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Guaranty, the Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and appellate courts from any thereof. The Guarantor
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Guarantor at its address
for notices set forth herein. The Guarantor hereby irrevocably waives any

                                       11
<PAGE>

objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Guaranty brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Administrative Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Guarantor in any other
jurisdiction.

                           (c)    GUARANTOR HEREBY WAIVES ITS RIGHTS TO A JURY
TRIAL OF ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY. IT IS HEREBY ACKNOWLEDGED BY GUARANTOR THAT THE WAIVER OF A JURY
TRIAL IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT TO ACCEPT THIS
GUARANTY AND THAT THE LOANS MADE BY THE BANKS ARE MADE IN RELIANCE UPON SUCH
WAIVER. GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT SUCH WAIVER HAS BEEN
KNOWINGLY AND VOLUNTARILY MADE, FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN
THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED BY THE ADMINISTRATIVE AGENT
IN COURT AS A WRITTEN CONSENT TO A NON-JURY TRIAL.

                           (d)    Guarantor does hereby further covenant and
agree to and with the Administrative Agent that Guarantor may be joined in any
action against Borrower in connection with the Loan Documents and that recovery
may be had against Guarantor in such action or in any independent action against
Guarantor (with respect to the Guaranteed Obligations), without the
Administrative Agent first pursuing or exhausting any remedy or claim against
Borrower or its successors or assigns. Guarantor also agrees that, in an action
brought with respect to the Guaranteed Obligations in any jurisdiction, it shall
be conclusively bound by the judgment in any such action by the Administrative
Agent (wherever brought) against Borrower or its successors or assigns, as if
Guarantor were a party to such action, even though Guarantor was not joined as a
party in such action.

                           (e)    Guarantor agrees to pay all reasonable
expenses (including, without limitation, attorneys' fees and disbursements)
which may be incurred by the Administrative Agent or the Banks in connection
with the enforcement of their rights under this Guaranty, whether or not suit is
initiated, and the collection of any funds hereunder.

                  22.      Except as provided in Section 6 hereof, this Guaranty
shall terminate and be of no further force or effect upon the full performance
and payment of the Guaranteed Obligations hereunder. Upon termination of this
Guaranty in accordance with the terms of this Guaranty, the Administrative Agent
promptly shall deliver to Guarantor such documents as Guarantor or Guarantor's
counsel reasonably may request in order to evidence such termination.

                  23.      All of the Administrative Agent's and the Banks'
rights and remedies under each of the Loan Documents or under this Guaranty are
intended to be distinct, separate

                                       12
<PAGE>

and cumulative and no such right or remedy therein or herein mentioned is
intended to be in exclusion of or a waiver of any other right or remedy
available to the Administrative Agent and the Banks.

                  24.      The Guarantor shall not use any assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code (the
"Code") to repay or secure the Loans, the Notes, the Guaranteed Obligations or
this Guaranty. The Guarantor shall not attempt to do any of the foregoing or
suffer any of the foregoing, or permit any party with a direct or indirect
interest or right in Borrower to do any of the foregoing, if such action would
cause the Notes, the Loans, the Guaranteed Obligations, this Guaranty, or any of
the Loan Documents or the exercise of any of the Administrative Agent's or
Banks' rights in connection therewith, to constitute a prohibited transaction
under ERISA or the Code (unless the Guarantor furnishes to the Administrative
Agent a legal opinion satisfactory to the Administrative Agent that the
transaction is exempt from the prohibited transaction provisions of ERISA and
the Code or would otherwise result in the Administrative Agent or any of the
Banks being deemed in violation of Sections 404 or 406 of ERISA or Section 4975
of the Code or would otherwise result in the Administrative Agent or any of the
Banks being a fiduciary or party in interest under ERISA or a "disqualified
person" as defined in Section 4975(e)(2) of the Code with respect to an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Code. The Guarantor shall
indemnify and hold each of the Administrative Agent and the Banks free and
harmless from and against all loss, costs (including attorneys' fees and
expenses), expenses, taxes and damages (including consequential damages) that
each of the Administrative Agent and the Banks may suffer by reason of the
investigation, defense and settlement of claims and in obtaining any prohibited
transaction exemption under ERISA necessary in Administrative Agent's reasonable
judgment as a result of Guarantor's action or inaction or by reason of a breach
of the foregoing provisions by Guarantor.

                  25.      This Guaranty shall become effective simultaneously
with the making of the initial Loans under the Credit
Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       13
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Guaranty as of the date and year first above written.

                                       GUARANTOR:

                                       CARRAMERICA REALTY, L.P.

                                       By:  CarrAmerica Realty GP Holdings, Inc
                                       Its: General Partner

                                            By:  /s/ THOMAS LEVY
                                                 Name: Thomas Levy
                                                 Title: Sr. Vice President

ACCEPTED:

ADMINISTRATIVE AGENT:

THE CHASE MANHATTAN BANK

By:  /s/ MARC E. COSTANTINO
     Name: Marc E. Costantino
     Title: Vice President

                                       S-1
<PAGE>

                          ACKNOWLEDGMENT FOR GUARANTOR
                          ----------------------------

STATE OF NEW YORK          )
                           ) SS.
COUNTY OF NEW YORK         )

                  On June ___, 2001 before me personally came _________________,
to me known to be the person who executed the foregoing instrument, and who,
being duly sworn by me, did depose and say that he is ____________________ of
CarrAmerica Realty L.P., and that he executed the foregoing instrument in the
organization's name, and that he had authority to sign the same, and he
acknowledged to me that he executed the same as the act and deed of said
organization for the uses and purposes therein mentioned.

[Seal]

                                                 -------------------------------
                                                 Notary Public

                                      S-1<PAGE>

                                                                    Exhibit 10.3

                     AMENDMENT NO. 3 TO THE MASTER SERVICES
                          AND SUPPLY AGREEMENT BETWEEN
                     FORD MOTOR COMPANY AND PEOPLEPC, INC.

     This Amendment No. 3 ("Third Amendment") is made effective this 18th day of
July, 2001, by and between Ford Motor Company ("Ford"), a Delaware corporation,
located at The American Road, Dearborn, Michigan 48126, and PeoplePC, Inc.
("PeoplePC"), a Delaware corporation with offices at 100 Pine Street, Suite
1100, San Francisco, California 94111.

     WHEREAS, Ford and PeoplePC entered into a Master Services and Supply
Agreement dated April 4, 2000 (the "Master Agreement"), relating to the Ford
Employee Connectivity Program ("FECP"); and

     WHEREAS, on September 29, 2000, PeoplePC, Ford, and Ford Motor Credit
Company ("Ford Credit") entered into an "Addendum to Master Services and Supply
Agreement," pursuant to which PeoplePC agreed to make Ford Motor Credit Company
the exclusive provider of Financial Services presented to customers under a
customer and dealer employee program contemplated by Ford and Ford Credit; and

     WHEREAS, on June 30, 2000, PeoplePC and Ford entered into "Amendment No. 1"
to the Master Agreement, pursuant to which Ford entered into several financial
commitments necessary for PeoplePC to obtain financing for the FECP; and

     WHEREAS, on July 14, 2000, PeoplePC and Ford restated Amendment No. 1; and

     WHEREAS, on July 18, 2000, PeoplePC and Ford further restated Amendment No.
1; and

     WHEREAS, on March 19, 2001, PeoplePC and Ford entered into Amendment No. 2
to the Master Agreement (Upgrade Rebates); and

     WHEREAS, PeoplePC has incurred expenses in preparing for rollouts of the
FECP in countries other than the United States (the "International Rollout
Expenses"); and

     WHEREAS, PeoplePC has asserted a claim against Ford under the Master
Agreement as detailed in the PeoplePC invoice number 1226CCC01 dated December
26, 2000 (the "Additional Costs"); and

     WHEREAS, Ford and PeoplePC wish to settle all past, present, and future
claims related to the International Rollout Expenses, Additional Costs, and
products supplied and services rendered by PeoplePC prior to the effective date
of this Third Amendment; and

     WHEREAS, the parties wish further to amend the Master Agreement;

     NOW, THEREFORE, the parties agree to amend the Master Agreement as follows:

        1.  The following sections will be deleted from the Master Agreement:
2.3; 3.1 through 3.4; 4.1; 4.2; 5.2; 6.3; and 6.5. No surviving provision of the
Master Agreement, as
<PAGE>

amended, will be construed to obligate Ford after the effective date of this
Amendment to purchase PeoplePC Solutions from PeoplePC, or to limit Ford in
purchasing similar products and services elsewhere.

     2.  Settlement of Claims.
         --------------------

          a.  Ford will promptly pay to PeoplePC the amount of $6,600,000, in
full and complete satisfaction of any obligation or duty owed by Ford and/or the
Ford Affiliates (and any claim arising out of a breach of such obligation or
duty) relating to (i) the International Rollout Expenses; (ii) damages and costs
incurred by PeoplePC in preparing for the rollout of the FECP in any country in
the world, or relating to Ford's cancellation or deferment of any such rollout;
(iii) the Additional Costs; and (iv) products supplied and services rendered by
PeoplePC under the Master Agreement prior to the effective date of this Third
Amendment, excepting only (A) obligations to pay Ford's portion of the unpaid
and outstanding purchase prices of any PeoplePC Solutions sold and delivered
under the Master Agreement; (B) Ford's liability under Section 8(c) of Exhibit A
to the Master Agreement; and (C) payment of invoice no. 1100-04 dated July 9,
2001, in the amount of $35, 920.81.

          b.  Upon execution of this Third Amendment, Ford will promptly pay to
PeoplePC the amounts referred to in Section 2.a(iv)(C) above.

     3.  Rescission of May 9, 2001 Letter.  Ford hereby rescinds that certain
         --------------------------------
letter dated May 9, 2001, from Marv Adams to Nick Grouf, without any prejudice
to the future assertion of the claims or assertions presented therein.

     4.  Sales Taxes.
         -----------

          a.  The following words are added to the end of Section 8(c) of
         Exhibit A:

         "Ford and Ford Affiliates will have no liability for interest and
         penalties imposed by any taxing authority regarding the obligations of
         this Paragraph, except to the extent that such interest and penalties
         are caused by the actions or omissions of Ford."

               b.  The following Paragraphs shall be added under Section 8
         "Invoices, Payment" of Exhibit A:

               "Notwithstanding that certain letter dated May 7, 2001 from
         Michael Radojevic to Nick Grouf, Ford acknowledges that it will
         reimburse PeoplePC for any sales tax liability (excluding any
         applicable interest and/or penalties) legally assessed against PeoplePC
         by California and/or any other state on sales transactions under the
         Master Agreement. Such reimbursement will extend to sales taxes that
         may be assessed against PeoplePC both on the purchase price of
         PeoplePC's "Desk Top Basic" and to the purchase price of any Solution
         Upgrades selected by the employee.

               PeoplePC will share with Ford all relevant information and
         documents concerning any communications with or requests for
         information from state or local sales tax authorities, and consult with
         Ford regarding the appropriate approaches toward resolving and
         minimizing sales tax liabilities in each state. Any such information
         and documents will be submitted to Ford for its review, prior to
         releasing the
<PAGE>

         requested data to the applicable taxing authority. PeoplePC agrees to
         provide Ford with notice of all proposed sales tax assessments received
         as a result of any audit, examination, or other actions of any state or
         local taxing authority which may result in an assessment of sales tax,
         at least 30 days prior to any expiration of applicable statutory appeal
         deadlines or at least 30 days before any proposed resolution of an
         assessment which may occur before the issuance of a statutory
         assessment. Except in the case of Direct Pay states (see next
         paragraph), reimbursement of any tax assessment will be contingent upon
         final proof of payment of the assessed tax by PeoplePC. The parties
         will cooperate to promptly resolve all sales tax issues resulting from
         sales made under the Master Agreement.

               Ford will issue to PeoplePC copies of Ford's Direct Pay Permits
         for the following states:  Georgia, Illinois, Indiana, Kentucky,
         Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Tennessee,
         and Virginia. Pursuant to the direct pay authority granted to it by
         these states, Ford has responsibility for any use taxes due and
         PeoplePC may rely on the Direct Pay Permits in not billing sales taxes
         on transactions with Ford."

         5.  During the Term of the Master Agreement, Ford will place PeoplePC's
"smiley face" logo (in the expanded form incorporating the name "PeoplePC") on
the following components of the enrollment materials that Ford sends to Eligible
Employees: front outside of envelope and letter or principal communication
addressed to Eligible Employee. The logo will be printed in a reasonably
prominent font size and position. At least 15 days prior to the first printing
of such enrollment materials, and each time the font size, position, or
appearance of the logo is changed, Ford will deliver such materials to PeoplePC
for its review and approval, which approval will not be unreasonably withheld.
PeoplePC represents and warrants that it owns or has the right to authorize Ford
to use the logo in such fashion. PeoplePC shall provide Ford with proof that it
has the right to use the logo in each country in which Ford delivers enrollment
materials to Eligible Employees. "Proof" shall consist either of evidence of
trademark registration or other document demonstrating such right to use, or the
opinion of PeoplePC's counsel that PeoplePC has such right to use. Such opinion
of counsel will be in a form approved by Ford, such approval not to be
unreasonably withheld. In the absence of such proof for a particular country,
Ford will have no obligation to use the logo on such materials in that country.
PeoplePC will indemnify Ford for and hold it harmless from any loss, damage,
judgment, expense, including reasonable counsel fees, settlement or recovery
arising from or related to any breach or alleged breach of any of the foregoing
warranty.

         6.  References.
             ----------

               a.  Within fifteen business days after the effective date of this
Third Amendment, Ford shall provide to PeoplePC (i) a letter of appreciation
from Marv Adams in mutually acceptable form and (ii) written, not-unfavourable,
and substantive comments that PeoplePC may use to describe its participation in
the FECP. PeoplePC may show to others the letter of appreciation; provided, that
PeoplePC does not edit or redact the letter. Upon notice to Ford in each
instance, PeoplePC may use the substantive comments from Ford through April 4,
2003 in printed marketing materials; provided, that Ford approves of the
comments in the context of the particular marketing materials. Ford shall have
three business days from receipt hereof to approve or disapprove of use of the
comments in context; if Ford does not respond in writing or
<PAGE>

by email to PeoplePC within three days from receipt thereof of such notice, Ford
will be deemed to have approved of such usage. PeoplePC is required to use each
substantive comment in its entirety, without summarizing, abbreviating, adding
to, or modifying the comment in any way.

          b.  PeoplePC may also, from time to time, request additional
references from Ford regarding PeoplePC's performance under the Master
Agreement. Such requests shall be directed to Dan Criscenti or a successor
designated by Ford. Ford will not unreasonably refuse to accommodate such
requests.

     7.  No Other Modifications.  Except as provided above, the terms and
         ----------------------
conditions of the Master Agreement remain unchanged. In the event of any
inconsistency or conflict between the terms and conditions of the Master
Agreement and the terms and conditions of this Amendment No. 3, the terms and
condition of this Amendment No. 3 will control. Where applicable, the defined
terms in the Master Agreement will have the same meaning in this Amendment No.
3.

     IN WITNESS WHEREOF, the parties have caused this Third Amendment to be duly
executed by an authorized representative to be effective as of the date first
written above.

FORD MOTOR COMPANY                    PEOPLEPC, INC.

By:  _____________________________    By:  ________________________________

Its:  ____________________________    Its:  ________________________________

By: ______________________________

Its: _____________________________

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