AMENDMENT NO. 3 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 further amends the Partnership Agreement as follows:
Article I of the Partnership Agreement is hereby amended by
inserting in the logical alphabetical locations on pages 3, 6 and
7, respectively, the following definitions of Common Units,
Preferred Units and Series A Preferred Units, as follows:
"Common Units" means all Partnership Interests that are not
specifically designated as Preferred Units pursuant to Section
4.02(c).
"Preferred Units" means all Partnership Interests designated
and issued by the General Partner from time to time in accordance
with the provisions of Section 4.02(c).
"Series A Preferred Units" means the Partnership Interests
of the General Partner acquired with the net proceeds of the
issuance by the General Partner of its 9.5% Series A Cumulative
Preferred Stock, which Partnership Interests shall have the
designations, preferences, privileges, limitations and relative
rights set forth in Section 4.02(c)(i) hereof.
In addition, Article I of the Partnership Agreement is amended by
deleting in its entirety the second sentence in the definition of
"Partnership Unit" on page 6 of the Partnership Agreement.
Article IV of the Partnership Agreement is hereby amended by
adding Section 4.02(c)(i) as follows:
(i) 9.5% Series A Cumulative Preferred Units.
1. Designation and Number. A series of Preferred Units,
designated the "9.5% Series A Cumulative Preferred Units"
(the "Series A Preferred Units"), is hereby established.
The number of Series A Preferred Units shall be 2,000,000.
2. Maturity. The Series A Preferred Units have no stated
maturity and will not be subject to any sinking fund or
mandatory redemption.
3. Rank. The Series A Preferred Units will, with respect to
distribution rights and rights upon liquidation, dissolution
or winding up of the Partnership, rank (i) senior to all
classes or series of Common Units of the Partnership, and to
all Partnership Interests ranking junior to the Series A
Preferred Units with respect to distribution rights or
rights upon liquidation, dissolution or winding up of the
Partnership; (ii) on a parity with all Partnership Interests
issued by the Partnership the terms of which specifically
provide that such Partnership Interests rank on a parity
with the Series A Preferred Units with respect to
distribution rights or rights upon liquidation, dissolution
or winding up of the Partnership; and (iii) junior to all
existing and future indebtedness of the Partnership. The
term "Partnership Interests" does not include convertible
debt securities, which will rank senior to the Series A
Preferred Units prior to conversion.
4. Distributions
(a) Holders of the Series A Preferred Units are entitled to
receive, when and as declared by the General Partner out of funds
legally available for the payment of distributions, preferential
cumulative cash distributions at the rate of 9.5% per annum of
the Liquidation Preference (as defined below) per Series A
Preferred Unit (equivalent to a fixed annual amount of $2.375 per
Series A Preferred Unit). Distributions on the Series A
Preferred Units shall be cumulative from the date of original
issue and shall be payable monthly in arrears on or before the
15th day of each month, or, if not a business day, the next
succeeding business day (each, a "Distribution Payment Date").
The first distribution, which will be paid on November 15, 1996,
will be for less than a full month. Such distribution and any
distribution payable on the Series A Preferred Units for any
partial distribution period will be computed on the basis of a
360-day year consisting of twelve 30-day months. Distributions
will be payable to holders of record as they appear in the
ownership records of the Partnership at the close of business on
the applicable record date, which shall be the first day of the
calendar month in which the applicable Distribution Payment Date
falls or on such other date designated by the General Partner of
the Partnership for the payment of distributions that is not more
than 30 nor less than 10 days prior to such Distribution Payment
Date (each, a "Distribution Record Date").
(b) No distributions on Series A Preferred Units shall be
declared by the General Partner or paid or set apart for payment
by the Partnership at such time as the terms and provisions of
any agreement of the Partnership, including any agreement
relating to its indebtedness, prohibits such declaration, payment
or setting apart for payment or provides that such declaration,
payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, distributions on the
Series A Preferred Units will accrue whether or not the
Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or
not such distributions are declared. Accrued but unpaid
distributions on the Series A Preferred Units will not bear
interest and holders of the Series A Preferred Units will not be
entitled to any distributions in excess of full cumulative
distributions described above. Except as set forth in the next
sentence, no distributions will be declared or paid or set apart
for payment on any Partnership Interests or any other series of
Preferred Units ranking, as to distributions, on a parity with or
junior to the Series A Preferred Units (other than a distribution
of the Partnership's Common Units or any other class of
Partnership Interests ranking junior to the Series A Preferred
Units as to distributions and upon liquidation) for any period
unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment
on the Series A Preferred Units for all past distribution periods
and the then current distribution period. When distributions are
not paid in full (or a sum sufficient for such full payment is
not so set apart) upon the Series A Preferred Units and any other
series of Preferred Units ranking on a parity as to distributions
with the Series A Preferred Units, all distributions declared
upon the Series A Preferred Units and any other series of
Preferred Units ranking on a parity as to distributions with the
Series A Preferred Units shall be declared pro rata so that the
amount of distributions declared per Series A Preferred Unit and
such other series of Preferred Units shall in all cases bear to
each other the same ratio that accrued distributions per Series A
Preferred Unit and such other series of Preferred Units (which
shall not include any accrual in respect of unpaid distributions
for prior distribution periods if such Preferred Units does not
have a cumulative distribution) bear to each other.
(d) Except as provided in the immediately preceding
paragraph, unless full cumulative distributions on the Series A
Preferred Units have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is
set apart for payment for all past distribution periods and the
then current distribution period, no distributions (other than in
Common Units or other Partnership Interests ranking junior to the
Series A Preferred Units as to distributions and upon
liquidation) shall be declared or paid or set aside for payment
nor shall any other distribution be declared or made upon the
Common Units, or any other Partnership Interests in the
Partnership ranking junior to or on a parity with the Series A
Preferred Units as to distributions or upon liquidation, nor
shall any Common Units, or any other Partnership Interests in the
Partnership ranking junior to or on a parity with the Series A
Preferred Units as to distributions or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund
for the redemption of any such shares) by the Partnership.
Holders of Series A Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or securities, in
excess of full cumulative distributions on the Series A Preferred
Units as provided above. Any distribution payment made on Series
A Preferred Units shall first be credited against the earliest
accrued but unpaid distribution due with respect to such Series A
Preferred Units which remains payable.
5. Liquidation Preference. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Partnership, the holders of Series A Preferred Units are entitled
to be paid out of the assets of the Partnership legally available
for distribution to its partners a liquidation preference of $25
per Series A Preferred Unit (the "Liquidation Preference"), plus
an amount equal to any accrued and unpaid distributions to the
date of payment, but without interest, before any distribution of
assets is made to holders of Common Units or any other class or
series of Partnership Interests in the Partnership that ranks
junior to the Series A Preferred Units as to liquidation rights.
The Partnership will promptly provide to the holders of Series A
Preferred Units written notice of any event triggering the right
to receive such Liquidation Preference. After payment of the
full amount of the Liquidation Preference, plus any accrued and
unpaid distributions to which they are entitled, the holders of
Series A Preferred Units will have no right or claim to any of
the remaining assets of the Partnership. The consolidation or
merger of the Partnership with or into any other partnership,
corporation, trust or entity or of any other partnership or
corporation with or into the Partnership, or the sale, lease or
conveyance of all or substantially all of the property or
business of the Partnership, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Partnership.
6. Redemption.
(a) The Series A Preferred Units are not redeemable prior
to November 1, 2001. On and after November 1, 2001, the
Partnership, at its option upon not less than 30 nor more than 60
days' written notice, may redeem the Series A Preferred Units, in
whole or in part, at any time or from time to time, for cash at a
redemption price of $25 per Series A Preferred Unit, plus all
accrued and unpaid distributions thereon to the date fixed for
redemption, without interest. Holders of Series A Preferred
Units to be redeemed shall surrender such Series A Preferred
Units at the place designated in such notice and shall be
entitled to the redemption price and any accrued and unpaid
distributions payable upon such redemption following such
surrender. If notice of redemption of any Series A Preferred
Units has been given and if the funds necessary for such
redemption have been set aside by the Partnership in trust for
the benefit of the holders of any Series A Preferred Units so
called for redemption, then from and after the redemption date
distributions will cease to accrue on such Series A Preferred
Units, such Series A Preferred Units shall no longer be deemed
outstanding and all rights of the holders of such series A
Preferred Units will terminate, except the right to receive the
redemption price. If less than all of the outstanding Series A
Preferred Units are to be redeemed, the Series A Preferred Units
to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional Series A Preferred Units)
or by any other equitable method determined by the General
Partner.
(b) Unless full cumulative distributions on all Series A
Preferred Units shall have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof
set apart for payment for all past distribution periods and the
then current distribution period, no Series A Preferred Units
shall be redeemed unless all outstanding Series A Preferred Units
are simultaneously redeemed and the Partnership shall not
purchase or otherwise acquire directly or indirectly any Series A
Preferred Units (except by exchange for Partnership Interests of
the Partnership ranking junior to the Series A Preferred Units as
to distributions and upon liquidation); provided, however, that
the foregoing shall not prevent the purchase or acquisition of
Series A Preferred Units pursuant to a purchase or exchange offer
made on the same terms to holders of all outstanding Series A
Preferred Units.
(c) Notice of redemption will be given by publication in a
newspaper of general circulation in the City of New York, such
publication to be made once a week for two successive weeks
commencing not less than 30 nor more than 60 days prior to the
redemption date. A similar notice will be mailed by the
Partnership, postage prepaid, not less than 30 nor more than 60
days prior to the redemption date, addressed to the respective
holders of record of the Series A Preferred Units to be redeemed
at their respective addresses as they appear on the stock
transfer records of the Partnership. No failure to give such
notice or any defect therein or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any
Series A Preferred Units except as to the holder to whom notice
was defective or not given. Each notice shall state: (i) the
redemption date; (ii) the redemption price; (iii) the number of
Series A Preferred Units to be redeemed; (iv) the place or places
where the Series A Preferred Units are to be surrendered for
payment of the redemption price; and (v) that distributions on
the shares to be redeemed will cease to accrue on such redemption
date. If less than all of the Series A Preferred Units held by
any holder are to be redeemed, the notice mailed to such holder
shall also specify the number of Series A Preferred Units held by
such holder to be redeemed.
(d) Immediately prior to any redemption of Series A
Preferred Units, the Partnership shall pay, in cash, any
accumulated and unpaid distributions through the redemption date,
unless a redemption date falls after a Distribution Record Date
and prior to the corresponding Distribution Payment Date, in
which case each holder of Series A Preferred Units at the close
of business on such Distribution Record Date shall be entitled to
the distribution payable on such shares on the corresponding
Distribution Payment Date notwithstanding the redemption of such
shares before such Distribution Payment Date.
7. Voting Rights. Holders of the Series A Preferred Units will
not have any voting rights.
8. Conversion. The Series A Preferred Units are not redeemable
for, convertible into or exchangeable for any other property or
securities of the Partnership.
Article V, Section 5.01 is hereby amended by adding the
following sentences as the last two sentences of subsection (a)
thereof:
"Notwithstanding the foregoing, gross income of the
Partnership for each fiscal year of the Partnership shall first
be allocated to the holders of any series of the Partnership's
Preferred Units in an amount equal to the distributions in
respect of such Preferred Units required by the terms of such
Preferred Units as set forth above, and no Profit in excess of
that amount shall be allocated to such holders. In no event
shall Loss be allocated to holders of any series of the
Partnership's Preferred Units"
Article V, Section 5.02 is hereby amended by adding
subsection (b) as follows:
(b) Notwithstanding the discretion given to the General
Partner in subsection (a) above, the General Partner shall cause
the Partnership to distribute to the holders of any series of the
Partnership's Preferred Units, prior to any distributions to the
holders of Common Units, such amounts at such times as shall be
required by the appropriate designating amendment to the
Partnership Agreement adopted pursuant to Section 4.02 hereof.
IN WITNESS WHEREOF, the foregoing Amendment No. 3 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 October, 1996 by the undersigned as general
partner of the Partnership.
MID-AMERICA APARTMENT COMMUNITIES, INC.
as General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President