Thanx @Lj LongWing... If mid tier stores the definitions on the server and multiple application user accessing the mid tier, then server stores the definition of objects till it reaches its memory capacity.?
In a typical configuration your mid-tier server is storing it's cache on the hard drive and references that cache from there....there is a memory component of course, but based on recommended values you aren't likely to run out of memory if you size your mid-tier server properly.
Below links could help you to understand the architecture and working.
Sr. Application Analyst