Exhibit 10(l)

MODIFICATION AGREEMENT

THIS MODIFICATION AGREEMENT (the “Agreement”) is made and entered into effective
as of the 30th day of April, 2009, by and among (i) SAUL HOLDINGS LIMITED
PARTNERSHIP, a Maryland limited partnership (hereinafter called “Borrower”);
(ii) SAUL CENTERS, INC., a Maryland corporation, BRIGGS CHANEY PLAZA, LLC, a
Maryland limited liability company, and KENTLANDS LOT 1, LLC, a Maryland limited
liability company (collectively, “Guarantor”; Borrower and Guarantor are herein
sometimes collectively referred to as the “Borrower Parties”), (iii) U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as administrative agent
and sole lead arranger (“Agent”); (iv) WELLS FARGO BANK, NATIONAL ASSOCIATION,
as syndication agent (“Syndication Agent”), and (v) U.S. BANK NATIONAL
ASSOCIATION (“US Bank”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”),
COMPASS BANK (“Compass”), and SOVEREIGN BANK (“Sovereign”) and any other lenders
who are now or who may hereafter become parties to this Agreement (collectively,
the “Lenders”).

W I T N E S S E T H:

WHEREAS, Lenders extended an unsecured line of credit (the “Loan”) to Borrower
in the current maximum principal amount of One Hundred Fifty Million and
00/100th Dollars ($150,000,000.00) (the “Loan Amount”), as evidenced by (i) that
certain Unsecured Revolving Promissory Note dated as of December 19, 2007
executed by Borrower in favor of US Bank, in the principal amount of Fifty-Five
Million and 00/100th Dollars ($55,000,000.00) (“US Bank Note”), (ii) that
certain Unsecured Revolving Promissory Note dated as of December 19, 2007
executed by Borrower in favor of Wells Fargo, in the principal amount of
Forty-Five Million and 00/100th Dollars ($45,000,000.00) (“Wells Fargo Note”),
(iii) that certain Unsecured Revolving Promissory Note dated as of December 19,
2007 executed by Borrower in favor of Compass, in the principal amount of Twenty
Million and 00/100th Dollars ($20,000,000.00) (“Compass Note”), and (iv) that
certain Unsecured Revolving Promissory Note dated as of December 19, 2007
executed by Borrower in favor of Sovereign, in the principal amount of Thirty
Million and 00/100th Dollars ($30,000,000.00) (“Sovereign Note”; the US Bank
Note, the Wells Fargo Note, the Compass Note and the Sovereign Note are herein
collectively referred to as the “Note”);

WHEREAS, the Note is issued pursuant to that certain Revolving Credit Agreement
dated as of December 19, 2007 by and between Borrower, Agent, Syndication Agent
and the Lenders (the “Credit Agreement”);

WHEREAS, Borrower’s obligations under the Note are guarantied by Guarantor
pursuant to those certain Guaranties, each dated as of December 19, 2007
(collectively, the “Guaranty”; the Promissory Note, the Credit Agreement and the
Guaranty, together with all modifications and amendments thereto and any
document required hereunder, are collectively referred to herein as the “Loan
Documents”);

WHEREAS, the Borrower, Guarantor, Agent and the Lenders have agreed to modify
the terms of the Loan, as hereinafter set forth; and

WHEREAS, each party desires to acknowledge the foregoing modifications of the
Loan and to reaffirm its obligations under the Loan Documents to which it is a
party.

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NOW, THEREFORE, in consideration of the foregoing, the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby agree as follows:

1. Incorporation of Recitals. The recitals set forth hereinabove are
incorporated herein by this reference with the same force and effect as if fully
hereinafter set forth.

2. Modification of Credit Agreement.

(a) The definition of “Applicable Margin” contained in the Credit Agreement is
deleted in its entirety and the following is inserted in lieu thereof:

Applicable Margin: With respect to:

(a) Loan Rate Advances — 3.900% with respect to Tranche A Loan Rate Advances,
5.250% with respect to Tranche B Loan Rate Advances.

(b) With respect to Tranche A LIBOR Rate Advances, the Applicable Margin shall
be equal to 3.900% unless the Leverage Ratio requirement set forth below is
satisfied in which event the Applicable Margin for LIBOR Rate Advances shall be
reduced as follows:

 

Leverage

Ratio

  

Applicable Margin for

Tranche A LIBOR

Rate Advances

³ 50% and

< 55%

   3.850%

³ 45% and

< 50%

   3.775%

³ 40% and

< 45%

   3.725%

< 40%

   3.650%

(c) With respect to Tranche B LIBOR Rate Advances, the Applicable Margin shall
be equal to 5.250% unless the Leverage Ratio requirement set forth below is
satisfied in which event the Applicable Margin for LIBOR Rate Advances shall be
reduced as follows:

 

Leverage

Ratio

  

Applicable Margin for

Tranche B LIBOR

Rate Advances

³ 50% and

< 55%

   5.000%

³ 45% and

< 50%

   4.850%

³ 40% and

< 45%

   4.600%

< 40%

   4.450%

 

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(b) The definition of “LIBOR” contained in the Credit Agreement is hereby
amended to add the following sentence at the end thereof: “Notwithstanding
anything in this paragraph to the contrary, in no event shall LIBOR be less than
1.50%.”

(c) All references in the Credit Agreement and the other Loan Documents to “One
Hundred Fifty Million and 00/100ths Dollars” and “$150,000,000.00” and similar
references denoting such dollar amount are hereby amended and replaced with
references to “One Hundred Twenty Million and 00/100ths Dollars” and
“$120,000,000.00”, respectively, it being acknowledged and agreed that the
Revolving Commitment Amount is hereby reduced by Thirty Million and 00/100ths
Dollars ($30,000,000.00).

(d) Section 2.B.3.D of the Credit Agreement is hereby amended to replace
“$60,000,000.00” with “$30,000,000.00”.

(e) For the period commencing May 1, 2009 and expiring on August 1, 2009,
Section 5.8(D) of the Credit Agreement is hereby modified to replace the number
“1.6” with “1.5”. From and after August 1, 2009, such number shall revert to
1.6.

3. Withdrawal of Lender.

(a) Simultaneously with the execution of this Agreement, Borrower shall have
discharged and satisfied the Sovereign Note in full and the original Sovereign
Note will be returned to Borrower marked “PAID IN FULL” (with a copy to Agent)
(the “Sovereign Payoff”).

(b) The US Bank Note, Wells Fargo Note and Compass Note shall remain in full
force and effect. Notwithstanding anything contained in the Loan Agreement, the
Note or the other Loan Documents to the contrary, all of the remaining Lenders
hereby consent to the discharge and satisfaction in full of the Sovereign Note
pursuant to the Sovereign Payoff, and the defined term “Note” as used in the
Credit Agreement and other Loan Documents shall hereinafter exclude the
Sovereign Note.

(c) By its execution of this Agreement, Sovereign acknowledges and agrees that
as of the date of this Agreement (a) it has withdrawn as a Lender under the
Credit Agreement and the other Loan Documents, and (b) it has no further right,
title or interest in, to or under the Loan, the Credit Agreement or the other
Loan Documents. Each and every reference in the Loan Documents to the “Lenders”
shall mean US Bank, Wells Fargo, Compass and any other lenders who may hereafter
become parties to the Credit Agreement.

(d) Schedule 1 of the Credit Agreement is hereby amended and restated in its
entirety to read as set forth on Schedule 1 attached hereto.

4. Waiver and Release of Claims and Defenses.

(a) The Borrower Parties hereby acknowledge, agree and affirm that Borrower and
Guarantor do not possess any claims, defenses, offsets, recoupment, or
counterclaims of any kind or nature against Agent and/or the Lenders or arising
out of or relating to the Credit Agreement or any other Loan Document, the loans
evidenced or secured thereby or any collateral for such loans, or the
enforcement thereof (collectively, the “Claims”), nor do the Borrower Parties
now have knowledge of any facts that would or might give rise to any Claims. If
facts now exist which would or could give rise to any Claim against Agent and/or
the Lenders or with respect to the Credit Agreement or any other Loan Document,
or the enforcement thereof, the Borrower Parties hereby unconditionally,
irrevocably, and

 

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unequivocally waive and fully release any and all such Claims as if such Claims
were the subject of a lawsuit, adjudicated to final judgment from which no
appeal could be taken, and therein dismissed with prejudice. The foregoing
release shall not release Agent and/or the Lenders from liability for breach of
this Agreement. In no event shall Agent and/or the Lenders be liable to the
Borrower Parties, and the Borrower Parties hereby waive, release and agree not
to sue for any special, indirect, punitive, exemplary, or consequential damages
suffered by the Borrower Parties in connection with, or arising out of, or in
any way related to the Loan Documents, including, without limitation, lost
profits, whatever the nature of a breach by Agent and/or the Lenders of its
obligations under this Agreement or any of the other Loan Documents, and the
Borrower Parties waive all claims for punitive, exemplary, or consequential
damages.

(b) The Borrower Parties hereby agree, represent and warrant to Agent and/or the
Lenders that the Borrower Parties realize and acknowledge that factual matters
now unknown may have given or may hereafter give rise to causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses which
are presently unknown, unanticipated and unsuspected, and the Borrower Parties
further agree, represent and warrant that the release provided hereunder has
been negotiated and agreed upon in light of that realization and that the
Borrower Parties nevertheless hereby intend to release, discharge and acquit the
Agent and/or the Lenders from any such unknown causes of action, claims,
demands, debts, controversies, damages, costs, losses and expenses which are in
any manner set forth in or related to the Loan and all dealings in connection
therewith.

5. Representations and Warranties under Loan Documents. Borrower and Guarantor
hereby represent and warrant that the Loan Documents to which they are a party,
as modified hereby, are valid, binding and enforceable; that no default, event
of default, breach or failure of condition has occurred, or would exist with
notice or the lapse of time or both, under any of the Loan Documents (as
modified by this Agreement); that no consents or approvals which have not been
previously obtained are required in order to make this Agreement valid, binding
and enforceable against the parties hereto; and that all representations and
warranties herein and in the other Loan Documents are true and correct in all
material respects, which representations and warranties shall survive execution
of this Agreement, as and to the extent provided herein and therein.

6. Reaffirmation of Guaranty. Each Guarantor hereby reaffirms its obligations
under its Guaranty, and its waivers, as set forth therein. Each Guarantor hereby
certifies that its Guaranty remains in full force and effect and is valid,
binding and enforceable, that there exist no defaults, offsets or defenses
thereunder, or any event which, with the giving of notice, passage of time or
both would constitute a default, offset or defense thereunder. Each Guarantor
further reaffirms that its obligations under its Guaranty are separate and
distinct from Borrower’s obligations under the Loan Documents.

7. Conditions Precedent. The following are conditions precedent to the
effectiveness of this Agreement:

(a) Receipt and approval by Agent of the executed originals of this Agreement,
and any and all other documents and agreements which are required by this
Agreement, each in form and content acceptable to Agent;

(b) Payment by Borrower to Agent and the remaining Lenders (i.e., exclusive of
Sovereign), in immediately available funds, of a modification fee in the amount
of Two Hundred Forty Thousand and 00/100th Dollars ($240,000.00) in
consideration of this Agreement;

(c) Payment by Borrower or reimbursement to Agent by Borrower at settlement of
Agent’s costs and expenses reasonably incurred in connection with this Agreement
and the transactions contemplated hereby, including, without limitation,
attorneys’ fees; and

 

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(d) Borrower shall have provided to Agent certifications, in form and substance
acceptable to the Agent, certifying that there have been no changes in the
organizational documents of the Borrower or Guarantor or providing copies of any
such changes for review and approval by the Agent, together with a certificate
of good standing from the state in which Borrower and each Guarantor is
organized.

8. Ratification of Loan Documents. Except as expressly provided herein, nothing
in this Agreement shall alter or affect any provision, condition, or covenant
contained in the Note, the Credit Agreement or in any of the other Loan
Documents or affect or impair any rights, powers, or remedies of Agent, it being
the intent of the parties hereto that the provisions of the Note, the Credit
Agreement and the other Loan Documents shall continue in full force and effect,
except as expressly modified hereby. All of the terms and conditions of the Loan
Documents are hereby ratified and confirmed by Borrower for all purposes and in
all respects.

9. Definitions. From and after the date hereof, references in the Credit
Agreement, the Note or any of the other Loan Documents to the term “Loan
Documents” shall mean and refer to the “Loan Documents”, as defined therein, as
modified pursuant to this Agreement.

Unless the context otherwise requires, references in the Loan Documents (a) to
the “Note” or “Promissory Note” and terms of similar import shall, from and
after the date hereof, mean and refer to the Note, as modified hereby, (b) to
the “Credit Agreement” and terms of similar import shall, from and after the
date hereof, mean and refer to the Credit Agreement, as modified hereby, and
(c) to the “Guaranty” or terms of similar import shall, from and after the date
hereof, mean and refer to the Guaranty, as modified hereby.

10. No Additional Modification. Except as expressly modified hereby, all of the
terms and conditions of the Loan Documents remain in full force and effect,
subject to no offsets or defenses, and are hereby ratified and confirmed for all
purposes and in all respects. Except as otherwise provided, all capitalized
terms of this Agreement shall have the same meaning as in the Credit Agreement.

11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall have the force and effect of an original, and all of which
shall constitute but one document.

12. No Novation. Neither this Agreement nor anything contained herein shall be
construed as a substitution or novation of Borrower’s indebtedness to Agent and
the Lenders, which shall remain in full force and effect, as hereby confirmed,
modified, supplemented and restated.

13. Waiver and Release. Borrower and Guarantor each acknowledges and agrees
that: (i) it has no claim or cause of action against Agent and/or any Lender (or
any of their directors, officers, employees or agents) in connection with this
Agreement, the Credit Agreement or any of the other Loan Documents; (ii) it has
no offset right, counterclaim or defense of any kind against any of its
obligations under the Loan Documents; and (iii) Agent and the Lenders have
heretofore properly performed and satisfied in a timely manner all of their
respective obligations to the Borrower and the Guarantor in connection with this
Agreement, the Credit Agreement and all of the other Loan Documents. Agent,
Lenders, Borrower and Guarantor desire to eliminate any possibility or
implication that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of Agent’s and/or
Lenders’ rights, interests, contracts, collateral security or remedies.
Therefore, Borrower and Guarantor unconditionally release, waive and forever
discharge (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of Agent and/or the Lenders to the Borrower or the
Guarantor in connection with this Agreement, the Credit Agreement or any of the
other Loan Documents, except the obligations to be performed by Agent and the
Lenders for the Borrower or the

 

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Guarantor as expressly stated in this Agreement, the Credit Agreement and the
other Loan Documents (it being understood and agreed that Sovereign shall not
have any further liabilities, obligations, duties, promises or indebtedness of
any kind to Borrower or Guarantor in connection with the Credit Agreement or the
other Loan Documents), and (B) all claims, offsets, causes of action, suits or
defenses of any kind whatsoever (if any), whether known or unknown, which the
Borrower or the Guarantor might otherwise have against Agent and/or the Lenders
or any of their directors, officers, employees or agents, in either case (A) or
(B), on account of any condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind whatsoever which existed, arose or occurred at any time prior
to the date hereof in connection with this Agreement, the Credit Agreement or
any of the other Loan Documents.

14. Waiver of Automatic Stay. Agent, on behalf of the Lenders, shall be and is
entitled to, and Borrower and Guarantor hereby consent to, relief from the stay
imposed by Section 362 of the Bankruptcy Code, as amended, in any applicable
proceeding. Borrower and Guarantor represent, warrant and agree that (i) it is a
sophisticated commercial party experienced in transactions similar to the
transaction contemplated herein and is represented by counsel of its own
choosing, which counsel is experienced in transactions similar to the
transaction contemplated herein, as determined by Borrower in its sole
discretion, (ii) it has been advised of, and discussed with its counsel,
alternatives to entering into this Agreement, including without limitation, a
petition for relief under any Chapter of the Bankruptcy Code, Title 11,
U.S.C.A., and it has determined that the transactions described herein are more
favorable to it than such alternatives, (iii) it has been given good and
valuable consideration for the waiver described in this Section 16, (iv) it has
not entered into this Agreement with the intention, expectation or belief that
its performance in accordance with the terms this Agreement will adversely
affect Borrower’s secured or unsecured creditors other than Agent and the
Lenders, and (vi) it is entering into this Agreement with a reasonable, good
faith expectation that it will be able to otherwise perform and satisfy its
obligations in respect of this Agreement, the Loan and the Loan Documents
together with its obligations to its secured and unsecured creditors other than
the Lenders, if any, as and when such obligations become due.

[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties have executed and ensealed this Agreement as of
the day and year first above written.

 

  BORROWER:   SAUL HOLDINGS LIMITED PARTNERSHIP, a Maryland limited partnership
    By:   Saul Centers, Inc., a Maryland corporation, its sole general partner  
    By:   /s/ B. Francis Saul II           Name:   B. Francis Saul II          
Its:   Chairman & CEO STATE OF MARYLAND     )     ss:   COUNTY OF MONTGOMERY    
)      

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be the person named as Chairman & CEO of Saul Centers, Inc., the sole
general partner of Borrower in the foregoing instrument, personally appeared
before me in the said jurisdiction, and as Chairman & CEO of the sole general
partner of Borrower, as aforesaid, acknowledged the same to be the act and deed
of Borrower, party thereto, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  GUARANTOR:   SAUL CENTERS, INC., a Maryland corporation       By:   /s/ B.
Francis Saul II           Name:   B. Francis Saul II           Title:  
Chairman & CEO STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )     ss:
 

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be, the person named as Chairman & CEO of Saul Centers, Inc. in the
foregoing instrument, personally appeared before me in the said jurisdiction,
and acknowledged the same to be the act and deed of Saul Centers, Inc., party
thereto, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  GUARANTOR:   BRIGGS CHANEY PLAZA, LLC, a Maryland limited liability company  
By:   Saul Centers, Inc., a Maryland corporation, its Manager       By:   /s/
Scott Schneider           Name:   Scott Schneider           Title:   Sr. Vice
President STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Scott Schneider, who is personally well known to me as, or satisfactorily proven
to be, the person named as Sr. Vice President of Saul Centers, Inc., the Manager
of Briggs Chaney Plaza, LLC in the foregoing instrument, personally appeared
before me in the said jurisdiction, and acknowledged the same to be the act and
deed of Briggs Chaney Plaza, LLC, party thereto, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  GUARANTOR:   KENTLANDS LOT 1, LLC, a Maryland limited liability company   By:
  Saul Centers, Inc., a Maryland corporation, its Manager       By:   /s/ Scott
Schneider           Name:   Scott Schneider           Title:   Sr. Vice
President STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Scott Schneider, who is personally well known to me as, or satisfactorily proven
to be, the person named as Sr. Vice President of Saul Centers, Inc., the Manager
of Kentlands Lot 1, LLC in the foregoing instrument, personally appeared before
me in the said jurisdiction, and acknowledged the same to be the act and deed of
Kentlands Lot 1, LLC, party thereto, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  AGENT AND LENDER:   U.S. BANK NATIONAL ASSOCIATION       By:   /s/ A. Jeffrey
Jacobson           Name:   A. Jeffrey Jacobson           Title:   Senior Vice
President COMMONWEALTH OF VIRGINIA     )     ss:  

COUNTY OF FAIRFAX

    )      

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Jeffrey Jacobson, who is personally well known to me as, or satisfactorily
proven to be, the person named as a SVP of U.S. Bank National Association, in
the foregoing instrument, personally appeared before me in the said
jurisdiction, and acknowledged the same to be the act and deed of U.S. Bank
National Association, and delivered the same as such.

GIVEN under my hand and official seal this 30 day of April, 2009.

 

/s/ Fatemeh Minaie Notary Public

 

My Commission Expires:    4-30-2009

 

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  LENDER:   WELLS FARGO BANK, NATIONAL ASSOCIATION       By:   /s/ Joseph
Sturiale           Name:   Joseph Sturiale           Title:   Vice President
DISTRICT OF COLUMBIA     )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Joseph Sturiale, who is personally well known to me as, or satisfactorily proven
to be, the person named as a Vice President of Wells Fargo Bank, National
Association, in the foregoing instrument, personally appeared before me in the
said jurisdiction, and acknowledged the same to be the act and deed of Wells
Fargo Bank, National Association, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Mykhaylo Maryniy Notary Public

 

My Commission Expires:    10/14/2012

 

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  LENDER:   COMPASS BANK       By:   /s/ S. Kent Gorman           Name:   S.
Kent Gorman           Title:   Senior Vice President DISTRICT OF COLUMBIA     )
    ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
S. Kent Gorman, who is personally well known to me as, or satisfactorily proven
to be, the person named as a SVP of Compass Bank, in the foregoing instrument,
personally appeared before me in the said jurisdiction, and acknowledged the
same to be the act and deed of Compass Bank, and delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Melynda A. Hill Notary Public

 

My Commission Expires:    1-27-11

 

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  WITHDRAWING LENDER:   SOVEREIGN BANK       By:   /s/ Thomas W. Whiteside      
    Name:   Thomas W. Whiteside           Title:   Senior Vice President STATE
OF PENNSYLVANIA     )      

COUNTY OF BUCKS

    )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Thomas W. Whiteside, who is personally well known to me as, or satisfactorily
proven to be, the person named as a Sr. V. President of Sovereign Bank, in the
foregoing instrument, personally appeared before me in the said jurisdiction,
and acknowledged the same to be the act and deed of Sovereign Bank, and
delivered the same as such.

GIVEN under my hand and official seal this 30th day of April, 2009.

 

/s/ Elizabeth A. Rubino Notary Public

 

My Commission Expires:    Sept. 25, 2012

 

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Schedule 1

Commitment Percentages

 

Lender

   Commitment Percentage  

U.S. Bank National Association ($55 MM)

   45.83333 % 

Wells Fargo Bank, National Association ($45 MM)

   37.50000 % 

Compass Bank ($20 MM)

   16.66667 % 

 

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SECOND MODIFICATION AGREEMENT

THIS SECOND MODIFICATION AGREEMENT (the “Agreement”) is made and entered into
effective as of the 9th day of July, 2009, by and among (i) SAUL HOLDINGS
LIMITED PARTNERSHIP, a Maryland limited partnership (hereinafter called
“Borrower”); (ii) SAUL CENTERS, INC., a Maryland corporation, BRIGGS CHANEY
PLAZA, LLC, a Maryland limited liability company, and KENTLANDS LOT 1, LLC, a
Maryland limited liability company (collectively, “Guarantor”; Borrower and
Guarantor are herein sometimes collectively referred to as the “Borrower
Parties”), (iii) U.S. BANK NATIONAL ASSOCIATION, a national banking association,
as administrative agent and sole lead arranger (“Agent”); (iv) WELLS FARGO BANK,
NATIONAL ASSOCIATION, as syndication agent (“Syndication Agent”), and (v) U.S.
BANK NATIONAL ASSOCIATION (“US Bank”), WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Wells Fargo”), and COMPASS BANK (“Compass”), and any other lenders who are now
or who may hereafter become parties to this Agreement (collectively, the
“Lenders”).

W I T N E S S E T H:

WHEREAS, Lenders extended an unsecured line of credit (the “Loan”) to Borrower
in the current maximum principal amount of One Hundred Twenty Million and
00/100th Dollars ($120,000,000.00) (the “Loan Amount”), as evidenced as of the
date hereof by (i) that certain Unsecured Revolving Promissory Note dated as of
December 19, 2007 executed by Borrower in favor of US Bank, in the principal
amount of Fifty-Five Million and 00/100th Dollars ($55,000,000.00) (“US Bank
Note”), (ii) that certain Unsecured Revolving Promissory Note dated as of
December 19, 2007 executed by Borrower in favor of Wells Fargo, in the principal
amount of Forty-Five Million and 00/100th Dollars ($45,000,000.00) (“Wells Fargo
Note”), and (iii) that certain Unsecured Revolving Promissory Note dated as of
December 19, 2007 executed by Borrower in favor of Compass, in the principal
amount of Twenty Million and 00/100th Dollars ($20,000,000.00) (“Compass Note”;
the US Bank Note, the Wells Fargo Note, and the Compass Note are herein
collectively referred to as the “Promissory Note”);

WHEREAS, the Promissory Note is issued pursuant to that certain Revolving Credit
Agreement dated as of December 19, 2007 by and between Borrower, Agent,
Syndication Agent and the Lenders (the “Original Credit Agreement”), as amended
by that certain Modification Agreement dated as of April 30, 2009 (the
“Modification Agreement”, and together with the Original Credit Agreement, the
“Credit Agreement”);

WHEREAS, Borrower’s obligations under the Promissory Note are guarantied by
Guarantor pursuant to those certain Guaranties, each dated as of December 19,
2007 (collectively, the “Guaranty”);

WHEREAS, the Borrower, Guarantor, Agent and the Lenders have agreed to modify
the terms of the Loan, as hereinafter set forth (the Promissory Note, the Credit
Agreement, the Guaranty, together with all other documents evidencing the Loan,
all modifications and amendments of any of the foregoing and any document
required hereunder or thereunder, are collectively referred to herein as the
“Loan Documents”);

WHEREAS, the Borrower, Guarantor, Agent and the Lenders have agreed to modify
the terms of the Loan, as hereinafter set forth; and

WHEREAS, each party desires to acknowledge and evidence its agreement to such
modifications of the Loan and to reaffirm its obligations under the Loan
Documents to which it is a party.

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NOW, THEREFORE, in consideration of the foregoing, the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby agree as follows:

1. Incorporation of Recitals. The recitals set forth hereinabove are
incorporated herein by this reference with the same force and effect as if fully
hereinafter set forth.

2. Modification of Credit Agreement.

(a) The definition of “Accordion Amount” contained in the Credit Agreement is
hereby amended to read as follows: “Up to $30,000,000.00”.

(b) The definition of “Accordion Expiration Date” contained in the Credit
Agreement is hereby amended to read as follows: “December 31, 2010”.

(c) The definition of “Adjusted EBITDA” contained in the Credit Agreement is
hereby amended to read as follows:

Adjusted EBITDA: An amount equal to EBITDA less a capital reserve equal to the
product of (x) $0.15 per square foot and (y) the aggregate amount of gross
square feet contained in all improvements owned or ground leased by Borrower
(whether directly or indirectly through one or more subsidiaries), including,
without limitation, a pro rata allocation of gross square feet to Borrower with
respect to any such improvements that are not wholly owned or ground leased,
whether directly or indirectly, by Borrower.

(d) The Credit Agreement is hereby amended to add an additional defined term, as
follows:

Daily LIBOR Rate: The one-month LIBOR rate quoted by Agent from Reuters Screen
LIBOR01 Page or any successor thereto, which shall be that one-month LIBOR rate
in effect and reset each Euro Day, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation.

(e) The definition of “Loan Rate” contained in the Credit Agreement is hereby
amended and restated to read as follows:

Loan Rate: A rate of interest equal to the Daily LIBOR Rate plus the Applicable
Margin. Changes in the Loan Rate shall become effective on the same day as the
date of any change in the Daily LIBOR Rate and shall apply to all advances made
hereunder (other than LIBOR Rate Advances), whether such advances are made prior
to, the same day as, or subsequent to any particular change in the Loan Rate. In
no event shall the Loan Rate ever exceed the maximum rate permitted by
applicable law (if any such maximum rate is established by applicable law), and
such maximum rate shall change if and when applicable law changes to permit a
higher maximum rate.

(f) The definition of “Maturity Date” contained in the Credit Agreement is
hereby amended to read as follows: “June 30, 2012, unless extended pursuant to
the terms of Section 1.4.” For the avoidance of doubt, the parties acknowledge
and agree that the Maturity Date is hereby extended to June 30, 2012 for all
purposes under the Credit Agreement and the other Loan Documents.

 

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(g) The definition of “Prime Rate” contained in the Credit Agreement is hereby
deleted in its entirety.

(h) Section 1.4.A of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in lieu thereof:

A. Payment on or before the first day of the Extension Period of an Extension
Fee equal to 0.30% of the Revolving Commitment Amount, as such Revolving
Commitment Amount may be increased in accordance with Section 3.6(a) of this
Credit Agreement.

(i) Section 1.8 of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in lieu thereof:

1.8 Inability to Determine LIBOR. In the event that on the date for determining
LIBOR in respect of the LIBOR Rate Period for any LIBOR Rate Advance, or for
determining the Daily LIBOR Rate for any Loan Rate Advance, as applicable, Agent
shall determine (which determination shall be conclusive in the absence of
manifest error) that, by reason of circumstances affecting the London interbank
market, adequate and fair means do not exist for ascertaining LIBOR for such
LIBOR Rate Period, or the Daily LIBOR Rate for such Loan Rate Advance, as
applicable, Agent shall promptly give to Borrower telephonic notice (confirmed
as soon as practicable in writing) of the nature and effect of such
circumstances. After receipt of such notice and during the existence of such
circumstances, (i) Borrower shall have no right to elect a LIBOR Rate with
respect to advances hereunder; provided that nothing in this Section shall
affect the LIBOR Rate then in effect on any LIBOR Rate Advance outstanding at
the time of receipt by Borrower of such notice until the expiration of the LIBOR
Rate Period in effect with respect to such LIBOR Rate Advance at such time, and
(ii) the Loan Rate shall be determined based upon an alternate index selected by
Agent, in its sole discretion, reasonably comparable to that of the Daily LIBOR
Rate, intended to generate a return substantially the same as that generated by
the Daily LIBOR Rate.

(j) Section 2.B.3.D of the Credit Agreement is hereby amended to replace the
reference to “$30,000,000.00” with a reference to “the sum of (x) $30,000,000.00
and (y) the aggregate amount of any increases in the Revolving Commitment Amount
pursuant to Section 3.6 hereof”.

(k) Section 5.8.C of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in lieu thereof:

C. Interest Expense Coverage. The ratio of Adjusted EBITDA to Interest Expense
for the then immediately preceding twelve (12) full calendar months shall not be
less than 2.20 to 1.

(l) Section 2(e) of the Modification Agreement is hereby deleted. Section 5.8.D
of the Credit Agreement is hereby deleted in its entirety and the following is
inserted in lieu thereof:

D. Fixed Charge Coverage. The ratio of Adjusted EBITDA to Debt Service for the
then immediately preceding twelve (12) full calendar months shall not be less
than 1.40 to 1.

 

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(m) A new Section 5.8.I is inserted into the Credit Agreement, as follows:

I. Debt Service Coverage. The ratio of Adjusted EBITDA to Debt Service for the
then immediately preceding twelve (12) full calendar months shall not be less
than 1.60 to 1, provided however that for purposes of this Section 5.8.I only,
Debt Service shall be determined exclusive of preferred stock dividends so long
as said dividends may optionally be deferred by Borrower.

(n) Section 8.5.A(1) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows: “Intentionally Omitted.”

3. Extension Option. Section 1.4 of the Credit Agreement is hereby amended to
replace the reference to “December 19, 2010” with a reference to “June 30,
2012”. Notwithstanding the extension of the Maturity Date evidenced by this
Agreement, the parties acknowledge that the option to further extend the
Maturity Date set forth in Section 1.4 of the Credit Agreement remains available
to Borrower, subject to the terms thereof, provided however that,
notwithstanding the terms of the Fee Letter, the Extension Fee payable pursuant
to Section 1.4.A shall be equal to thirty (30) basis points of the then
Revolving Commitment Amount (such fee to be paid following receipt by Agent to
the Lenders in accordance with their then respective Commitment Percentages).

4. Representations and Warranties under Loan Documents. Borrower and Guarantor
hereby represent and warrant that the Loan Documents to which they are a party,
as modified hereby, are valid, binding and enforceable; that no default, event
of default, breach or failure of condition has occurred, or would exist with
notice or the lapse of time or both, under any of the Loan Documents (as
modified by this Agreement); that no consents or approvals which have not been
previously obtained are required in order to make this Agreement valid, binding
and enforceable against the parties hereto; and that all representations and
warranties herein and in the other Loan Documents are true and correct in all
material respects, which representations and warranties shall survive execution
of this Agreement, as and to the extent provided herein and therein.

5. Reaffirmation of Guaranty. Each Guarantor hereby reaffirms its obligations
under its Guaranty, and its waivers, as set forth therein. Each Guarantor hereby
certifies that its Guaranty remains in full force and effect and is valid,
binding and enforceable, that there exist no defaults, offsets or defenses
thereunder, or any event which, with the giving of notice, passage of time or
both would constitute a default, offset or defense thereunder. Each Guarantor
further reaffirms that its obligations under its Guaranty are separate and
distinct from Borrower’s obligations under the Loan Documents.

6. Conditions Precedent. The following are conditions precedent to the
effectiveness of this Agreement:

(a) Receipt and approval by Agent of the executed originals of this Agreement,
and any and all other documents and agreements which are required by this
Agreement, each in form and content acceptable to Agent;

(b) Payment by Borrower to Agent and the Lenders, in immediately available
funds, of a modification fee in the amount of Eight Hundred Forty Thousand and
00/100th Dollars ($840,000.00) in consideration of this Agreement;

(c) Payment by Borrower or reimbursement to Agent by Borrower at settlement of
Agent’s costs and expenses reasonably incurred in connection with this Agreement
and the transactions contemplated hereby, including, without limitation,
attorneys’ fees;

 

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(d) Borrower and Guarantor shall have provided to Agent authorizing resolutions
authorizing the execution of the Modification Documents;

(e) Borrower shall have provided to Agent certifications, in form and substance
acceptable to the Agent, certifying that there have been no changes in the
organizational documents of the Borrower or Guarantor or providing copies of any
such changes for review and approval by the Agent, together with a certificate
of good standing from the state in which Borrower and each Guarantor is
organized; and

(f) Borrower shall have provided to Agent an opinion of counsel regarding the
organization, existence and due authority of Borrower and Guarantor and the
authorization, execution and enforceability of the Modification Documents.

7. Ratification of Loan Documents. Except as expressly provided herein, nothing
in this Agreement shall alter or affect any provision, condition, or covenant
contained in the Note, the Credit Agreement, the Modification Agreement or in
any of the other Loan Documents or affect or impair any rights, powers, or
remedies of Agent, it being the intent of the parties hereto that the provisions
of the Note, the Credit Agreement and the other Loan Documents shall continue in
full force and effect, except as expressly modified hereby. All of the terms and
conditions of the Loan Documents are hereby ratified and confirmed by Borrower
for all purposes and in all respects.

8. Definitions. From and after the date hereof, references in the Credit
Agreement, the Note or any of the other Loan Documents to the term “Loan
Documents” shall mean and refer to the “Loan Documents”, as defined therein, as
modified pursuant to the Modification Agreement and this Agreement.

Unless the context otherwise requires, references in the Loan Documents (a) to
the “Note” or “Promissory Note” and terms of similar import shall, from and
after the date hereof, mean and refer to the Note, as modified hereby, (b) to
the “Credit Agreement” and terms of similar import shall, from and after the
date hereof, mean and refer to the Credit Agreement, as modified hereby, and
(c) to the “Guaranty” or terms of similar import shall, from and after the date
hereof, mean and refer to the Guaranty, as modified hereby.

9. No Additional Modification. Except as expressly modified hereby, all of the
terms and conditions of the Loan Documents remain in full force and effect,
subject to no offsets or defenses, and are hereby ratified and confirmed for all
purposes and in all respects. Except as otherwise provided, all capitalized
terms of this Agreement shall have the same meaning as in the Credit Agreement.

10. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall have the force and effect of an original, and all of which
shall constitute but one document.

11. No Novation. Neither this Agreement nor anything contained herein shall be
construed as a substitution or novation of Borrower’s indebtedness to Agent and
the Lenders, which shall remain in full force and effect, as hereby confirmed,
modified, supplemented and restated.

12. Waiver and Release. Borrower and Guarantor each acknowledges and agrees
that: (i) it has no claim or cause of action against Agent and/or any Lender (or
any of their directors, officers, employees or agents) in connection with this
Agreement, the Credit Agreement or any of the other Loan Documents; (ii) it has
no offset right, counterclaim or defense of any kind against any of its
obligations under the Loan Documents; and (iii) Agent and the Lenders have
heretofore properly performed and satisfied in a timely manner all of their
respective obligations to the Borrower and the Guarantor in connection with this
Agreement, the Credit Agreement and all of the other Loan Documents. Agent,

 

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Lenders, Borrower and Guarantor desire to eliminate any possibility or
implication that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of Agent’s and/or
Lenders’ rights, interests, contracts, collateral security or remedies.
Therefore, Borrower and Guarantor unconditionally release, waive and forever
discharge (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of Agent and/or the Lenders to the Borrower or the
Guarantor in connection with this Agreement, the Credit Agreement or any of the
other Loan Documents, except the obligations to be performed by Agent and the
Lenders for the Borrower or the Guarantor as expressly stated in this Agreement,
the Credit Agreement and the other Loan Documents, and (B) all claims, offsets,
causes of action, suits or defenses of any kind whatsoever (if any), whether
known or unknown, which the Borrower or the Guarantor might otherwise have
against Agent and/or the Lenders or any of their directors, officers, employees
or agents, in either case (A) or (B), on account of any condition, act,
omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind whatsoever which existed,
arose or occurred at any time prior to the date hereof in connection with this
Agreement, the Credit Agreement or any of the other Loan Documents.

13. Waiver of Automatic Stay. Agent shall be and is entitled to, and Borrower
and Guarantor hereby consent to, relief from the stay imposed by Section 362 of
the Bankruptcy Code, as amended, in any applicable proceeding. Borrower and
Guarantor represent, warrant and agree that (i) it is a sophisticated commercial
party experienced in transactions similar to the transaction contemplated herein
and is represented by counsel of its own choosing, which counsel is experienced
in transactions similar to the transaction contemplated herein, as determined by
Borrower in its sole discretion, (ii) it has been advised of, and discussed with
its counsel, alternatives to entering into this Agreement, including without
limitation, a petition for relief under any Chapter of the Bankruptcy Code,
Title 11, U.S.C.A., and it has determined that the transactions described herein
are more favorable to it than such alternatives, (iii) it has been given good
and valuable consideration for the waiver described in this Section 13, (iv) it
has not entered into this Agreement with the intention, expectation or belief
that its performance in accordance with the terms this Agreement will adversely
affect Borrower’s secured or unsecured creditors other than Agent and the
Lenders, and (vi) it is entering into this Agreement with a reasonable, good
faith expectation that it will be able to otherwise perform and satisfy its
obligations in respect of this Agreement, the Loan and the Loan Documents
together with its obligations to its secured and unsecured creditors other than
the Lenders, if any, as and when such obligations become due.

[Signatures on following page]

 

-6-

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IN WITNESS WHEREOF, the parties have executed and ensealed this Agreement as of
the day and year first above written.

 

  BORROWER:   SAUL HOLDINGS LIMITED PARTNERSHIP, a Maryland limited partnership
    By:   Saul Centers, Inc., a Maryland corporation, its sole general partner  
    By:   /s/ B. Francis Saul II           Name:   B. Francis Saul II          
Its:   Chief Executive Officer STATE OF MARYLAND     )     ss:   COUNTY OF
MONTGOMERY     )      

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be the person named as CEO of Saul Centers, Inc., the sole general
partner of Borrower in the foregoing instrument, personally appeared before me
in the said jurisdiction, and as CEO of the sole general partner of Borrower, as
aforesaid, acknowledged the same to be the act and deed of Borrower, party
thereto, and delivered the same as such.

GIVEN under my hand and official seal this 8th day of July, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  GUARANTOR:   SAUL CENTERS, INC., a Maryland corporation       By:   /s/ B.
Francis Saul II           Name:   B. Francis Saul II           Title:   Chief
Executive Officer STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )    
ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be, the person named as CEO of Saul Centers, Inc. in the foregoing
instrument, personally appeared before me in the said jurisdiction, and
acknowledged the same to be the act and deed of Saul Centers, Inc., party
thereto, and delivered the same as such.

GIVEN under my hand and official seal this 8th day of July, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

-8-

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  GUARANTOR:   BRIGGS CHANEY PLAZA, LLC, a Maryland limited liability company  
  By:   Saul Centers, Inc., a Maryland corporation, its Manager       By:   /s/
B. Francis Saul II           Name:   B. Francis Saul II           Title:   Chief
Executive Officer STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )    
ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be, the person named as CEO of Saul Centers, Inc., the Manager of
Briggs Chaney Plaza, LLC in the foregoing instrument, personally appeared before
me in the said jurisdiction, and acknowledged the same to be the act and deed of
Briggs Chaney Plaza, LLC, party thereto, and delivered the same as such.

GIVEN under my hand and official seal this 8th day of July, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

-9-

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  GUARANTOR:   KENTLANDS LOT 1, LLC, a Maryland limited liability company    
By:   Saul Centers, Inc., a Maryland corporation, its Manager       By:   /s/ B.
Francis Saul II           Name:   B. Francis Saul II           Title:   Chief
Executive Officer STATE OF MARYLAND     )       COUNTY OF MONTGOMERY     )    
ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
B. Francis Saul II, who is personally well known to me as, or satisfactorily
proven to be, the person named as CEO of Saul Centers, Inc., the Manager of
Kentlands Lot 1, LLC in the foregoing instrument, personally appeared before me
in the said jurisdiction, and acknowledged the same to be the act and deed of
Kentlands Lot 1, LLC, party thereto, and delivered the same as such.

GIVEN under my hand and official seal this 8th day of July, 2009.

 

/s/ Linda R. Geimer Notary Public

 

My Commission Expires:    July 14, 2012

 

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  AGENT AND LENDER:   U.S. BANK NATIONAL ASSOCIATION       By:   /s/ A. Jeffrey
Jacobson           Name:   A. Jeffrey Jacobson           Title:   Senior Vice
President COMMONWEALTH OF VIRGINIA     )     ss:  

COUNTY OF FAIRFAX

    )      

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
A. Jeffrey Jacobson, who is personally well known to me as, or satisfactorily
proven to be, the person named as a Senior Vice President of U.S. Bank National
Association, in the foregoing instrument, personally appeared before me in the
said jurisdiction, and acknowledged the same to be the act and deed of U.S. Bank
National Association, and delivered the same as such.

GIVEN under my hand and official seal this 7th day of July, 2009.

 

/s/ Victoria A. Wray Notary Public

 

My Commission Expires:    9-30-2011

 

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  LENDER:   WELLS FARGO BANK, NATIONAL ASSOCIATION       By:   /s/ Joseph
Sturiale           Name:   Joseph Sturiale           Title:   Vice President
DISTRICT OF COLUMBIA     )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
Joseph Sturiale, who is personally well known to me as, or satisfactorily proven
to be, the person named as a Vice President of Wells Fargo Bank, National
Association, in the foregoing instrument, personally appeared before me in the
said jurisdiction, and acknowledged the same to be the act and deed of Wells
Fargo Bank, National Association, and delivered the same as such.

GIVEN under my hand and official seal this 9th day of July, 2009.

 

/s/ Mykhaylo Maryniy Notary Public

 

My Commission Expires:    10/14/2012

 

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  LENDER:   COMPASS BANK       By:   /s/ S. Kent Gorman           Name:   S.
Kent Gorman           Title:   Sr. VP DISTRICT OF COLUMBIA     )     ss:  

I, a Notary Public in and for the aforesaid jurisdiction, do hereby certify that
S. Kent Gorman, who is personally well known to me as, or satisfactorily proven
to be, the person named as a SVP of Compass Bank, in the foregoing instrument,
personally appeared before me in the said jurisdiction, and acknowledged the
same to be the act and deed of Compass Bank, and delivered the same as such.

GIVEN under my hand and official seal this 8th day of July, 2009.

 

/s/ Melynda A. Hill Notary Public

 

My Commission Expires:    1-27-11

 

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Schedule 1

Commitment Percentages

 

Lender

   Commitment Percentage  

U.S. Bank National Association ($55MM)

   45.83333 % 

Wells Fargo Bank, National Association ($45MM)

   37.50000 % 

Compass Bank ($20MM)

   16.66667 % 

 

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THIRD MODIFICATION AGREEMENT

THIS THIRD MODIFICATION AGREEMENT (the “Agreement”) is made and entered into
effective as of the 28th day of July, 2009, by and among (i) SAUL HOLDINGS
LIMITED PARTNERSHIP, a Maryland limited partnership (hereinafter called
“Borrower”); (ii) SAUL CENTERS, INC., a Maryland corporation, BRIGGS CHANEY
PLAZA, LLC, a Maryland limited liability company, and KENTLANDS LOT 1, LLC, a
Maryland limited liability company (collectively, “Guarantor”; Borrower and
Guarantor are herein sometimes collectively referred to as the “Borrower
Parties”), (iii) U.S. BANK NATIONAL ASSOCIATION, a national banking association,
as administrative agent and sole lead arranger (“Agent”); (iv) WELLS FARGO BANK,
NATIONAL ASSOCIATION, as syndication agent (“Syndication Agent”), and (v) U.S.
BANK NATIONAL ASSOCIATION (“US Bank”), WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Wells Fargo”), COMPASS BANK (“Compass”; together with US Bank and Wells Fargo,
the “Existing Lenders”) and (vi) CHEVY CHASE BANK, F.S.B. (“Chevy Chase”;
together with the Existing Lenders and any other lenders who are now or who may
hereafter become parties to this Agreement, the “Lenders”).

W I T N E S S E T H:

WHEREAS, the Existing Lenders have extended an unsecured line of credit (the
“Loan”) to Borrower in the current maximum principal amount of One Hundred
Twenty Million and 00/100th Dollars ($120,000,000.00) (the “Loan Amount”), as
evidenced as of the date hereof by (i) that certain Unsecured Revolving
Promissory Note dated as of December 19, 2007 executed by Borrower in favor of
US Bank, in the principal amount of Fifty-Five Million and 00/100th Dollars
($55,000,000.00) (“US Bank Note”), (ii) that certain Unsecured Revolving
Promissory Note dated as of December 19, 2007 executed by Borrower in favor of
Wells Fargo, in the principal amount of Forty-Five Million and 00/100th Dollars
($45,000,000.00) (“Wells Fargo Note”), and (iii) that certain Unsecured
Revolving Promissory Note dated as of December 19, 2007 executed by Borrower in
favor of Compass, in the principal amount of Twenty Million and 00/100th Dollars
($20,000,000.00) (“Compass Note”; the US Bank Note, the Wells Fargo Note, and
the Compass Note are herein collectively referred to as the “Promissory Note”);

WHEREAS, the Promissory Note is issued pursuant to that certain Revolving Credit
Agreement dated as of December 19, 2007 by and between Borrower, Agent,
Syndication Agent, the Existing Lenders and Sovereign Bank (the “Original Credit
Agreement”), as amended by that certain Modification Agreement dated as of
April 30, 2009 and that certain Second Modification Agreement dated as of
July 9, 2009 (such agreements, together with the Original Credit Agreement, the
“Credit Agreement”);

WHEREAS, Borrower’s obligations under the Promissory Note are guarantied by
Guarantor pursuant to those certain Guaranties, each dated as of December 19,
2007 (collectively, the “Guaranty”);

WHEREAS, the Borrower, Guarantor, Agent and the Lenders have agreed to modify
the terms of the Loan, as hereinafter set forth (the Promissory Note, the Credit
Agreement, the Guaranty, together with all other documents evidencing the Loan,
all modifications and amendments of any of the foregoing and any document
required hereunder or thereunder, are collectively referred to herein as the
“Loan Documents”);

WHEREAS, each party desires to acknowledge and evidence its agreement to such
modifications of the Loan and to reaffirm its obligations under the Loan
Documents to which it is a party.

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NOW, THEREFORE, in consideration of the foregoing, the mutual promises set forth
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby agree as follows:

1. Incorporation of Recitals. The recitals set forth hereinabove are
incorporated herein by this reference with the same force and effect as if fully
hereinafter set forth.

2. Chevy Chase Note. Simultaneously with the execution of this Agreement,
Borrower is executing and delivering to Chevy Chase an Unsecured Revolving
Promissory Note in the principal amount of $30,000,000.00. All references in the
Loan Documents to the “Note” shall hereinafter be deemed to mean and refer to
the US Bank Note, the Wells Fargo Note, the Compass Note and the Chevy Chase
Note, individually or collectively as the context may require.

3. Admission of Chevy Chase as Lender; Modification of Credit Agreement.

(a) Chevy Chase hereby (i) issues its Revolving Commitment to the Borrower in
the amount of Thirty Million and 00/100ths Dollars ($30,000,000.00), (ii) agrees
to become a Lender under the Credit Agreement, and (iii) acknowledges that it
shall have all of the rights and remedies and shall be subject to all of the
obligations of a Lender under the Credit Agreement. Simultaneously herewith, and
to the extent that there is any principal outstanding under the Notes of the
Existing Lenders as of the date hereof, Chevy Chase shall remit to Agent the
amount required pursuant to Section 3.6(c) of the Credit Agreement, to be deemed
an advance under the Revolving Commitment of Chevy Chase and to be applied in
reduction of outstanding principal amounts under the Notes of the Existing
Lenders, in accordance with said Section 3.6(c).

(b) All references in the Credit Agreement and the other Loan Documents to “One
Hundred Twenty Million and 00/100ths Dollars” and “$120,000,000.00” and similar
references denoting such dollar amount are hereby amended and replaced with
references to “One Hundred Fifty Million and 00/100ths Dollars” and
“$150,000,000.00” and corresponding references denoting such dollar amount,
respectively, it being acknowledged and agreed that the Revolving Commitment
Amount is hereby increased by Thirty Million and No/100ths Dollars
($30,000,000.00).

(c) The US Bank Note, the Wells Fargo Note and the Compass Note shall remain in
full force and effect. Notwithstanding anything contained in the Credit
Agreement, the Note or the other Loan Documents to the contrary, US Bank, Wells
Fargo and Compass hereby (i) consent to the admission of Chevy Chase as a Lender
as provided in this Agreement and the corresponding dilution of their respective
Commitment Percentages as set forth in Schedule 1 attached hereto, and
(ii) waive any right under Section 3.6 of Credit Agreement or otherwise to
participate in the increase in the Revolving Commitment Amount evidenced by this
Agreement.

(d) As of the date hereof, each and every reference in the Loan Documents to the
“Lenders” shall mean and refer to US Bank, Wells Fargo, Compass, Chevy Chase and
any other lenders who may hereafter become parties to the Credit Agreement.

(e) The definition of “Accordion Expiration Date” contained in the Credit
Agreement is hereby amended to replace the date “December 31, 2010” with the
date “July 28, 2009”, it being acknowledged and agreed by the parties hereto
that Borrower shall have no further right to request increases in the Revolving
Commitment Amount pursuant to Section 3.6 of the Credit Agreement, and Agent
shall have no further obligation to syndicate the Facility or to obtain or
accept any additional Revolving Commitments.

 

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(f) Section 8.4.B(5) of the Credit Agreement is hereby amended to add the words
“or guaranty” after the words “of any indemnity”.

(g) Schedule 1 of the Credit Agreement is hereby amended and restated in its
entirety to read as set forth on Schedule 1 attached hereto.

4. Representations and Warranties under Loan Documents. Borrower and Guarantor
hereby represent and warrant that the Loan Documents to which they are a party,
as modified hereby, are valid, binding and enforceable; that no default, event
of default, breach or failure of condition has occurred, or would exist with
notice or the lapse of time or both, under any of the Loan Documents (as
modified by this Agreement); that no consents or approvals which have not been
previously obtained are required in order to make this Agreement valid, binding
and enforceable against the parties hereto; and that all representations and
warranties herein and in the other Loan Documents are true and correct in all
material respects, which representations and warranties shall survive execution
of this Agreement, as and to the extent provided herein and therein.

5. Reaffirmation of Guaranty. Each Guarantor hereby reaffirms its obligations
under its Guaranty, and its waivers, as set forth therein, and agrees and
confirms that its Guaranty secures the Loan, as increased to $150,000,000.00.
Each Guarantor hereby certifies that its Guaranty remains in full force and
effect and is valid, binding and enforceable, that there exist no defaults,
offsets or defenses thereunder, or any event which, with the giving of notice,
passage of time or both would constitute a default, offset or defense
thereunder. Each Guarantor further reaffirms that its obligations under its
Guaranty are separate and distinct from Borrower’s obligations under the Loan
Documents.

6. Conditions Precedent. The following are conditions precedent to the
effectiveness of this Agreement:

(a) Receipt and approval by Agent of the executed originals of this Agreement,
and any and all other documents and agreements which are required by this
Agreement, each in form and content acceptable to Agent;

(b) Payment by Borrower of such fees as are due and payable pursuant to the Fee
Letter in respect of the increase in the Revolving Commitment Amount evidenced
hereby;

(c) Payment by Borrower or reimbursement to Agent by Borrower at settlement of
Agent’s costs and expenses reasonably incurred in connection with this Agreement
and the transactions contemplated hereby, including, without limitation,
attorneys’ fees;

(d) Borrower and Guarantor shall have provided to Agent authorizing resolutions
authorizing the execution of the Modification Documents;

(e) Borrower shall have provided to Agent certifications, in form and substance
acceptable to the Agent, certifying that there have been no changes in the
organizational documents of the Borrower or Guarantor or providing copies of any
such changes for review and approval by the Agent, together with a certificate
of good standing from the state in which Borrower and each Guarantor is
organized; and

(f) Borrower shall have provided to Agent an opinion of counsel regarding the
organization, existence and due authority of Borrower and Guarantor and the
authorization, execution and enforceability of the Modification Documents.

 

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7. Ratification of Loan Documents. Except as expressly provided herein, nothing
in this Agreement shall alter or affect any provision, condition, or covenant
contained in the Note, the Credit Agreement, the Modification Agreement or in
any of the other Loan Documents or affect or impair any rights, powers, or
remedies of Agent, it being the intent of the parties hereto that the provisions
of the Note, the Credit Agreement and the other Loan Documents shall continue in
full force and effect, except as expressly modified hereby. All of the terms and
conditions of the Loan Documents are hereby ratified and confirmed by Borrower
for all purposes and in all respects.

8. Definitions. From and after the date hereof, references in the Credit
Agreement, the Note or any of the other Loan Documents to the term “Loan
Documents” shall mean and refer to the “Loan Documents”, as defined therein, as
modified pursuant to the Modification Agreement and this Agreement.

Unless the context otherwise requires, references in the Loan Documents (a) to
the “Note” or “Promissory Note” and terms of similar import shall, from and
after the date hereof, mean and refer to the Note, as modified hereby, (b) to
the “Credit Agreement” and terms of similar import shall, from and after the
date hereof, mean and refer to the Credit Agreement, as modified hereby, and
(c) to the “Guaranty” or terms of similar import shall, from and after the date
hereof, mean and refer to the Guaranty, as modified hereby.

9. No Additional Modification. Except as expressly modified hereby, all of the
terms and conditions of the Loan Documents remain in full force and effect,
subject to no offsets or defenses, and are hereby ratified and confirmed for all
purposes and in all respects. Except as otherwise provided, all capitalized
terms of this Agreement shall have the same meaning as in the Credit Agreement.

10. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall have the force and effect of an original, and all of which
shall constitute but one document.

11. No Novation. Neither this Agreement nor anything contained herein shall be
construed as a substitution or novation of Borrower’s indebtedness to Agent and
the Lenders, which shall remain in full force and effect, as hereby confirmed,
modified, supplemented and restated.

12. Waiver and Release. Borrower and Guarantor each acknowledges and agrees
that: (i) it has no claim or cause of action against Agent and/or any Lender (or
any of their directors, officers, employees or agents) in connection with this
Agreement, the Credit Agreement or any of the other Loan Documents; (ii) it has
no offset right, counterclaim or defense of any kind against any of its
obligations under the Loan Documents; and (iii) Agent and the Lenders have
heretofore properly performed and satisfied in a timely manner all of their
respective obligations to the Borrower and the Guarantor in connection with this
Agreement, the Credit Agreement and all of the other Loan Documents. Agent,
Lenders, Borrower and Guarantor desire to eliminate any possibility or
implication that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of Agent’s and/or
Lenders’ rights, interests, contracts, collateral security or remedies.
Therefore, Borrower and Guarantor unconditionally release, waive and forever
discharge (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of Agent and/or the Lenders to the Borrower or the
Guarantor in connection with this Agreement, the Credit Agreement or any of the
other Loan Documents, except the obligations to be performed by Agent and the
Lenders for the Borrower or the Guarantor as expressly stated in this Agreement,
the Credit Agreement and the other Loan Documents, and (B) all claims, offsets,
causes of action, suits or defenses of any kind whatsoever (if any), whether
known or unknown, which the Borrower or the Guarantor might otherwise have
against Agent and/or the Lenders or any of their directors, officers, employees
or agents, in either case (A) or (B), on account of any condition, act,
omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind whatsoever which existed,
arose or occurred at any time prior to the date hereof in connection with this
Agreement, the Credit Agreement or any of the other Loan Documents.

 

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13. Waiver of Automatic Stay. Agent shall be and is entitled to, and Borrower
and Guarantor hereby consent to, relief from the stay imposed by Section 362 of
the Bankruptcy Code, as amended, in any applicable proceeding. Borrower and
Guarantor represent, warrant and agree that (i) it is a sophisticated commercial
party experienced in transactions similar to the transaction contemplated herein
and is represented by counsel of its own choosing, which counsel is experienced
in transactions similar to the transaction contemplated herein, as determined by
Borrower in its sole discretion, (ii) it has been advised of, and discussed with
its counsel, alternatives to entering into this Agreement, including without
limitation, a petition for relief under any Chapter of the Bankruptcy Code,
Title 11, U.S.C.A., and it has determined that the transactions described herein
are more favorable to it than such alternatives, (iii) it has been given good
and valuable consideration for the waiver described in this Section 13, (iv) it
has not entered into this Agreement with the intention, expectation or belief
that its performance in accordance with the terms this Agreement will adversely
affect Borrower’s secured or unsecured creditors other than Agent and the
Lenders, and (vi) it is entering into this Agreement with a reasonable, good
faith expectation that it will be able to otherwise perform and satisfy its
obligations in respect of this Agreement, the Loan and the Loan Documents
together with its obligations to its secured and unsecured creditors other than
the Lenders, if any, as and when such obligations become due.

[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties have executed and ensealed this Agreement as of
the day and year first above written.

 

    BORROWER:     SAUL HOLDINGS LIMITED PARTNERSHIP, a Maryland limited
partnership       By:   Saul Centers, Inc., a Maryland corporation, its sole
general partner         By:   /s/ B. Francis Saul II             Name:   B.
Francis Saul II             Its:   Chief Executive Officer

 

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    GUARANTOR:     SAUL CENTERS, INC., a Maryland corporation         By:   /s/
B. Francis Saul II             Name:   B. Francis Saul II             Title:  
Chief Executive Officer

 

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    GUARANTOR:    

BRIGGS CHANEY PLAZA, LLC, a Maryland limited

liability company

      By:   Saul Centers, Inc., a Maryland corporation, its Manager         By:
  /s/ B. Francis Saul III             Name:   B. Francis Saul III            
Title:   President

 

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    GUARANTOR:     KENTLANDS LOT 1, LLC, a Maryland limited liability company  
    By:   Saul Centers, Inc., a Maryland corporation, its Manager         By:  
/s/ B. Francis Saul III             Name:   B. Francis Saul III            
Title:   President

 

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    AGENT AND LENDER:     U.S. BANK NATIONAL ASSOCIATION         By:   /s/ A.
Jeffrey Jacobson             Name:   A. Jeffrey Jacobson             Title:  
Senior Vice President

 

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    LENDER:     WELLS FARGO BANK, NATIONAL ASSOCIATION         By:   /s/ Joseph
Sturiale             Name:   Joseph Sturiale             Title:   Vice President

 

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    LENDER:     COMPASS BANK         By:   /s/ S. K. Gorman             Name:  
S. K. Gorman             Title:   Sr. VP

 

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    LENDER:     CHEVY CHASE BANK, F.S.B.         By:   /s/ Sadhvi K. Subramanian
            Name:   Sadhvi K. Subramanian             Title:   Group Vice
President

 

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Schedule 1

Commitment Percentages

 

Lender

   Commitment Percentage  

U.S. Bank National Association ($55MM)

   36.66667 % 

Wells Fargo Bank, National Association ($45MM)

   30.00000 % 

Compass Bank ($20MM)

   13.33333 % 

Chevy Chase Bank, F.S.B. ($30MM)

   20.00000 % 

 

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