AMENDMENT NO. 4 TO THE FIRST AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
MID-AMERICA APARTMENTS, L.P.
Pursuant to Article XI of the First Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement") of
Mid-America Apartments, L.P. (the "Partnership"), the
undersigned, being the sole general partner of the Partnership,
hereby amends the Partnership Agreement as follows:
WHEREAS, the Partnership Agreement was amended by written
Amendment No. 2 effective February 24, 1996 in order to express
the intention of the Partners to provide the Limited Partners
(excluding the General Partner and Affiliated Entities) with the
economic benefit (and to burden Limited Partners with the
economic detriment) of real estate investments of the General
Partner and Affiliated Entities made outside of the Partnership
and Subsidiary Partnerships.
Article I of the Partnership Agreement is hereby amended by
inserting in the logical alphabetical locations on pages 2, 3 and
7 the following definitions:
"Affiliated Entity" means each Qualified REIT Subsidiary (as
defined in Code Section 856(i)(2)) of the General Partner which
owns real estate directly and each other entity (except
Subsidiary Partnerships) which owns real estate and in which the
General Partner owns an interest, including, without limitation,
joint ventures, general partnerships, limited liability companies
and other entities, but specifically excluding the Partnership
and all Subsidiary Partnerships.
"Class A Common Units" means all Common Units issued to
Limited Partners other than the General Partner and Affiliated
Entities.
"Class A Limited Partners" means all Limited Partners who
hold Class A Common Units.
"Class A Ownership Percentage" means for any relevant period
the percentage derived by applying the formula "U/(S+U)" wherein
U equals the average aggregate number of Class A Common Units
issued and outstanding and S equals the average aggregate number
of REIT Shares issued and outstanding.
"Class B Common Units" means all Common Units issued to the
General Partner and all Affiliated Entities.
"Class B Limited Partners" means the General Partner and
each Affiliated Entity that has been admitted as a Limited
Partner of the Partnership.
"Class B Ownership Percentage" means 100% minus the Class A
Ownership Percentage.
"Separate Real Estate Assets" means all interests in real
estate assets (as defined in Code Section 856(c)(6)(B)) owned by
the General Partner either directly or indirectly through
Affiliated Entities.
"Separate Real Estate Economics" means, (i) for all tax
purposes, all items of income, gain, and/or loss and (ii) for all
financial accounting purposes, net income (loss) under GAAP,
respectively, as derived by the General Partner and Affiliated
Entities from Separate Real Estate Assets.
"Subsidiary Partnership" means any general partnership,
limited partnership, joint venture or limited liability company
ninety percent (90%) of the equity interests of which are owned
by the Partnership.
"Target Class A Allocation" means the product of (A) the
Class A Ownership Percentage, times (B) the sum of Separate Real
Estate Economics plus or minus (i) for all tax purposes,
Partnership Profit or Loss, and (ii) for financial reporting
purposes, net income (loss) of the Partnership under GAAP.
Article II, Section 2.03 is amended by deleting
subparagraphs (a) and (c) in their entirety and inserting in lieu
thereof the following:
(a) The General Partner of the Partnership is Mid-America
Apartment Communities, Inc. Its principal place of business
shall be the same as that of the Partnership. The
Partnership Interest of the General Partner consists of a
one percent (1%) general partnership interest represented by
Class B Common Units and the balance of which consists of a
limited partnership interest represented also by Class B
Common Units.
(c) The Limited Partners shall consist of Class A Limited
Partners and Class B Limited Partners. The Class A Limited
Partners shall be those Persons who shall have signed and
delivered a Transaction Consent and Signature Page or shall
otherwise have been admitted as Class A Limited Partners
pursuant hereto. Those persons who shall have executed and
delivered a Transaction Consent and Signature Page are
hereby admitted as Class A Limited Partners. The Class B
Limited Partners shall be the General Partner and each
Affiliated Entity that shall have been duly admitted as a
Limited Partner.
Article V, Section 5.01A of the Partnership Agreement is
hereby amended by deleting Section 5.01A in its entirety and
inserting in lieu thereof the following:
5.01A Special Allocation with respect to Separate
Real Estate Economics. There shall be specially allocated
to the Class A Limited Partners at the appropriate times as
determined by the General Partner, in its sole discretion,
which allocations shall be taken solely from allocations
otherwise allocable to the Class B Limited Partners pursuant
to this Partnership Agreement, an amount equal to the
difference between the Target Class A Allocation and (i) for
all tax purposes, the Partnership Profit or Loss, and (ii)
for financial reporting purposes, net income (loss) under
GAAP, in each case as allocated to the Class A Limited
Partners pursuant to Section 5.01(a). To the extent
possible, for all tax purposes such special allocations
shall affect the same elements of income, gain, loss and
cash flow of the Partnership as would have been affected had
the Separate Real Estate Economics been realized within the
Partnership as if the Separate Real Estate Assets had been
owned by the Partnership. The special allocation shall be
allocated among the Class A Limited Partners in proportion
to the average number of Class A Units held by each Class A
Limited Partner during a period divided by the average
aggregate number of Class A Units outstanding during such
period, and shall be allocated away from the Class B Limited
Partners in proportion to the average number of Class B
Units held by each Class B Limited Partner during a period
divided by the average aggregate number of Class B Units
outstanding during such period.
Article V of the Partnership Agreement is further amended by
adding the following Section 5.08:
5.08 Savings Provisions. (a) The tax allocation provisions
of this Agreement are intended to produce final Capital Account
balances that are at levels ("Target Final Balances") which
permit liquidating distributions that are made in accordance with
such final Capital Account balances to be made equally on a "per
Common Unit" basis to the holders of Class A Common Units and
Class B Common Units pursuant to Section 5.06 above. To the
extent that the tax allocation provisions of this Agreement would
not produce the Target Final Balances, the Partners agree to take
such actions as are necessary to amend such provisions to produce
such Target Final Balances. Notwithstanding the other provisions
of this Agreement, allocations of Partnership gross income and
deductions shall be made prospectively as necessary to produce
such Target Final Balances (and, to the extent such prospective
allocations would not reach such result, the prior tax returns of
the Partnership shall be amended to reallocate Partnership gross
income and deductions to produce such Target Final Balances).
(b) For financial reporting purposes, the General Partner
is authorized to use any method which is reasonable and in
conformity with generally accepted accounting principles ("GAAP")
to effect the foregoing allocations for GAAP accounting purposes
to properly reflect the economic effect of the allocation and
distribution provisions contained herein.
IN WITNESS WHEREOF, the foregoing Amendment No. 4 to the
First Amended and Restated Agreement of Limited Partnership of
Mid-America Apartments, L.P. has been signed and delivered as of
this 10th day of December, 1996 by the undersigned as general
partner of the Partnership, but for all purposes shall be
effective as of the 24th day of February, 1996, this Amendment
No. 4 being curative in nature and intended to clarify the
provisions of Amendment No. 2 executed, delivered and effective
as of February 24, 1996.
MID-AMERICA APARTMENT COMMUNITIES, INC.
as General Partner
By: /s/ Simon X.X. Xxxxxxxxx
-------------------------
Title: Executive Vice President
