Exhibit 10(a)
SHARED SERVICES
AGREEMENT
This SHARED SERVICES AGREEMENT,
dated July 1, 2004, is between B.F. Saul Company, a
corporation organized under the laws of the District of Columbia
(“ Saul Company, ” which definition shall be
deemed to include, for purposes of this Agreement, all consolidated
subsidiaries of Saul Company), and Saul Centers, Inc., a
corporation organized under the laws of the State of Maryland
(“ Saul Centers, ” which definition shall be
deemed to include, for purposes of this Agreement, Saul Holdings
Limited Partnership and all of its subsidiaries).
RECITALS:
A. Both of
the parties hereto are engaged in various businesses involving real
estate. The headquarters locations and most executive officers of
each of the parties are located at the same address, designated
below as “Headquarters.” Saul Company has certain
experienced employees, programs and procedures the use of which
could be of benefit to Saul Centers.
B. In order
to recognize that certain costs of operating their businesses are
most efficiently accounted for on a shared basis, the parties have
agreed to establish and recognize certain standards and procedures
for such shared costs as set forth below in this
Agreement.
C. Further,
in order to make its business operations more cost-effective and
efficient, and otherwise to facilitate such operations, Saul
Centers has requested that Saul Company make available to Saul
Centers certain time and services of Saul Company employees, and
certain goods and services accessible through Saul
Company.
D. Saul
Company has agreed to make such employee time and services and
other goods and services available to Saul Centers, on the terms
and conditions hereinafter set forth, both parties agreeing that
such terms represent a fair and equitable treatment of the costs
and benefits to each of the parties with respect to such time,
goods and services.
E. The
parties confirm that this Agreement is intended to confirm and
clarify the practices and procedures that have been agreed to and
in effect since January 1, 2004, and thus should be deemed to
be effective from and after January 1, 2004.
NOW, THEREFORE, in consideration of
the foregoing and of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows.
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AGREEMENT:
(a) The
head offices of both Saul Company and Saul Centers are currently
located on the 13 th through 15
th
floors of the East
Tower at 7501 Wisconsin Avenue, Bethesda, Maryland 20814 (such
location, until changed by written agreement of an authorized
officer of each of the parties, to be referred to herein as “
Headquarters ”). The parties agree that certain costs
of the operation of, and company operations run from, the
Headquarters, as set forth on Schedule 1-A attached to this
Agreement (“ Headquarters Shared Costs ”) shall
be split between Saul Company and Saul Centers on a percentage
basis proportionate to the number of employees (“
Employees ”) employed by each such party whose primary
place of employment is Headquarters. The costs included on Schedule
1-A shall be reviewed by authorized officers of each of the parties
on an annual basis (or more frequently to the extent deemed
appropriate by such authorized officers). Any changes therein made
by mutual agreement of such authorized officers shall be deemed
amendments to this Agreement, and shall be attached to the original
copy of this Agreement held by each such party. [In this
connection, the parties acknowledge and agree that certain
occupancy costs that might otherwise be deemed included in the
definition of Headquarters Shared Costs under this Agreement are,
instead, already covered by and included in one or more separate
agreements such as a sublease. Costs covered by such separate
agreements are not intended to be treated under this Shared
Services Agreement.]
(b) For
purposes of determining the respective number of Employees of Saul
Company and Saul Centers for any purpose under this Agreement,
(i) some employees perform services for both Saul Company and
Saul Centers, the name and respective portion of each such
employee’s time allocated to each company to be set forth on
Schedule 1-B; and (ii) the parties may agree (and shall so set
forth on Schedule 1-B) that all or a designated portion of the time
of a particular employee or employees (“ Allocated
Employees ”) is to be allocated to Saul Centers, even
though that employee may technically be an employee of Saul
Company. As to item (ii) in the preceding sentence, the
parties agree that such procedure is intended to provide a more
efficient way of accounting for time of various employees spent for
the benefit of Saul Centers that may vary from period to period
than attempting actually to track the specific allocation of such
time.
(c) The
respective number of Saul Company and Saul Centers Headquarters
Employees and their allocated percentages shall be determined
annually (or more frequently to the extent deemed appropriate by
authorized officers of each company). For each calendar year, such
number shall be determined, “in arrears,” by using the
number of Employees employed by each party on the first business
day of the last month in the preceding calendar year. For example,
for the period from January 1, 2005 through December 31,
2005, such number shall be based on the number of Employees of each
party on the first business day of December, 2004. The parties
acknowledge that the number of
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Employees may fluctuate from time to
time within any quarterly annual, but, subject to the provisions
set forth above for more frequent determinations by mutual
agreement) have agreed that the system of computation described
above in this Section 1 substantially captures the agreement
of the parties and is fair and equitable on an overall
basis.
(d) Headquarters Shared
Costs may, based on the mutual agreement of the parties, be paid,
in proportion, directly by each party, or be paid by Saul Company
and reimbursed by Saul Centers monthly. The supporting
documentation for any such request shall be made available to Saul
Centers at any reasonable time at Headquarters.
(a) Both Saul
Company and Saul Centers have offices in locations other than
Headquarters, and Employees who work at locations other than
Headquarters. The parties agree that certain
“company-wide” costs of the operation of the respective
businesses of Saul Company and Saul Centers, whether relating to
officers and Employees at Headquarters or other offices, as set
forth on Schedule 2 attached to this Agreement (“
Company-Wide Shared Costs ”) shall be split between
Saul Company and Saul Centers on a percentage basis proportionate
to the number of Employees employed by each such party, including
both Employees whose principal place of business is Headquarters
and Employees whose principal place of business is one or more
other offices of either party. The costs included on Schedule 2
shall be reviewed by authorized officers of each of the parties on
an annual basis (or more frequently to the extent deemed
appropriate by such authorized officers). Any changes therein made
by mutual agreement of such authorized officers shall be deemed
amendments to this Agreement, and shall be attached to the original
copy of this Agreement held by each such party.
(b) Anything
herein to the contrary notwithstanding, the parties acknowledge
that the Company-Wide Shared Costs are not intended to cover
certain Employees (such as Employees whose sole work for the
relevant party is performed a
