Document:

cldb-ex42_16.htm

Exhibit 4.2

CORTLAND BANCORP

194 West Main Street

Cortland, OH 44410

 

November 12, 2015

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

Re:  Cortland Bancorp Quarterly Report on Form 10-Q for the quarter ended September 30, 2015

Ladies and Gentlemen:

Cortland Bancorp, an Ohio corporation, is today filing a Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (the "Form 10-Q"), as executed on November 12, 2015. 

Pursuant to the instructions relating to the Exhibits in Item 601(b)(4)(iii) of Regulation S-K, Cortland Bancorp hereby agrees to furnish the Commission, upon request, copies of instruments and agreements defining the rights of holders of its long-term debt and of the long-term debt of its consolidated subsidiaries, which are not being filed as exhibits to the Form 10-Q.  No such instrument or agreement represents long-term debt exceeding 10% of the total assets of Cortland Bancorp and its subsidiaries on a consolidated basis.

Very truly yours,

	
/s/ James M. Gasior

	
James M. Gasior

	
President and CEOEX-10.2

 Exhibit 10.2 

FORM OF ESCROW AGREEMENT 

THIS ESCROW AGREEMENT (this “Escrow Agreement”), dated as of
            , 2015, is entered into by and among STEADFAST APARTMENT REIT III, INC., a Maryland corporation (the “Company”), STEADFAST CAPITAL MARKETS GROUP, LLC, a
Delaware limited liability company, as dealer manager for the Company (the “Dealer Manager”), and UMB Bank, N.A., as escrow agent (the “Escrow Agent”). 

WHEREAS, the Company is registering for sale in a public offering (the “Offering”) a maximum of $1,300,000,000 in
shares of its common stock, $0.01 par value per share, consisting of Class A common stock and Class T common stock (collectively, the “Shares”), pursuant to the Company’s Registration Statement on Form S-11 (File
No. 333-    ), as amended from time to time; 
 WHEREAS, the Dealer Manager has been engaged by the Company
to offer and sell the Shares on a best-efforts basis in the Offering through a network of participating broker-dealers (the “Dealers”); 

WHEREAS, the Company and the Dealer Manager desire to establish an escrow account (the “Escrow Account”) as further
described herein and to deposit funds contributed by subscribers subscribing to purchase Shares (“Subscribers”) with the Escrow Agent in the Escrow Account, to be held for the benefit of the Subscribers and the Company until such
time as subscriptions for the Minimum Amount (as defined below), the Pennsylvania Minimum (as defined below) or the Other State Minimum (as defined below) have been deposited into the Escrow Account in accordance with the terms of this Escrow
Agreement; 
 WHEREAS, subscription proceeds received from residents of the State of Pennsylvania (the “Pennsylvania
Subscribers”) will remain in the Escrow Account until the conditions of Section 3 have been satisfied; 

WHEREAS, subscription proceeds received from residents of certain states identified by written notice from the Company (the
“Other Subscribers”) will remain in the Escrow Account until the conditions of Section 4 have been satisfied; 

WHEREAS, DST Systems, Inc. (the “Processing Agent”) has been engaged to receive, examine for “good order”
and facilitate subscriptions into the Escrow Account as further described herein and to act as record keeper, maintaining on behalf of the Escrow Agent the ownership records for the Escrow Account; and 

WHEREAS, the Escrow Agent is willing to accept appointment as escrow agent upon the terms and conditions set forth herein. 

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows: 
  

	1.	Escrow of Subscriber Funds. 

 (a) On or before the commencement of the Offering, the
Company shall establish the Escrow Account with the Escrow Agent, which shall be entitled “UMB Bank, N.A., as Escrow Agent for Steadfast Apartment REIT III, Inc.” All funds received from Subscribers in payment for the Shares
(“Subscriber Funds”) will be delivered to the Escrow Agent within one (1) business day following the day upon which such Subscriber Funds are received by the Company or the Dealer Manager and such subscription is accepted by
the Company, and shall, upon receipt of good and collected funds by the Escrow Agent, be retained in the Escrow Account by the Escrow Agent and invested as stated below. During the term of this 

 
Escrow Agreement, the Company and the Dealer Manager shall cause all checks received by and made payable to each of them in payment for the Shares to be endorsed in favor of the Escrow Agent and
delivered to the Escrow Agent for deposit in the Escrow Account. Subscriber Funds also may be wired directly to the Escrow Account using wire instructions provided by the Escrow Agent. 

(b) Escrow Agent shall have no duty to make any disbursement, investment or other use of Subscriber Funds until and unless it has good and
collected funds. In the event that any checks deposited in the Escrow Account are returned or prove uncollectible after the funds represented thereby have been released by the Escrow Agent, then the Company shall promptly reimburse the Escrow Agent
for any and all costs incurred for such, upon request, and the Escrow Agent shall deliver the returned checks to the Company. The Escrow Agent shall be under no duty or responsibility to enforce collection of any check delivered to it hereunder. The
Escrow Agent reserves the right to deny, suspend or terminate participation by a Subscriber to the extent the Escrow Agent deems it advisable or necessary to comply with applicable laws. 

 

	2.	Operation of the Escrow. 

 (a) Until such time as the Company has received subscriptions
for Shares resulting in gross subscription proceeds equal to the Minimum Offering (as defined below) and the funds in the Escrow Account are disbursed from the Escrow Account in accordance with Section 2(b) hereof, Subscribers will be
instructed to make checks, drafts, wires, Automated Clearing House (ACH) or money orders (“Instruments of Payment”) for subscriptions payable to the order of “UMB Bank, N.A., as Escrow Agent for Steadfast Apartment REIT III,
Inc.”; provided, however, that Pennsylvania Subscribers shall continue to make checks payable to the order of “UMB Bank, N.A., as Escrow Agent for Steadfast Apartment REIT III, Inc.”, until such time as the Company has
received subscriptions for Shares resulting in gross offering proceeds equal to or greater than the Pennsylvania Minimum and the subscription proceeds received from Pennsylvania Subscribers are disbursed from the Escrow Account in accordance with
Section 3 hereof, and Other Subscribers shall continue to make checks payable to the order of “UMB Bank, N.A., as Escrow Agent for Steadfast Apartment REIT III, Inc.”, until such time as the Company has received subscriptions
for Shares resulting in gross offering proceeds equal to or greater than the respective Other State Minimum and the subscription proceeds received from Other Subscribers are disbursed from the Escrow Account in accordance with Section 4
hereof. Completed subscription agreements and Instruments of Payment for the purchase price shall be remitted to the address designated for the receipt of such agreements and Instruments of Payment. Any Instruments of Payment made payable to a party
other than the Escrow Agent shall be returned to the Dealer Manager or the Dealer who submitted such Instrument of Payment. When the Dealer’s internal supervisory procedures are conducted at the site at which the Instruments of Payment and the
Subscription Materials (as defined below) are initially received by the Dealer, by the end of the next business day after receipt of any Instruments of Payment and Subscription Materials, the Dealer will send to the Escrow Agent such Instruments of
Payment along with each Subscriber’s name, address, executed IRS Form W-9, number and class of Shares purchased and purchase price remitted and any other subscription documentation (the “Subscription Materials”). When the
Dealer’s internal supervisory procedures are conducted at a different location (the “Final Review Office”), the Dealer shall transmit the Instruments of Payment and the Subscription Materials to the Final Review Office by the
end of the next business day after receipt of any Instruments of Payment and Subscription Materials, and then the Final Review Office will, by the end of the next business day following its receipt of the Instruments of Payment and the Subscription
Materials, forward the Instruments of Payment and the Subscription Materials to the Escrow Agent. To the extent that subscription agreements and payments are remitted by the Processing Agent, the Company, the Dealer Manager or a Dealer, the
Processing Agent, the Company, the Dealer Manager or a Dealer, as applicable, will furnish to the Escrow Agent a list detailing information regarding such subscriptions as set forth in Exhibit A. The Processing Agent will promptly deliver all
monies received in good order from Subscribers (or from the Company, the Dealer Manager or Dealers transmitting monies and subscriptions 

  
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from Subscribers) for the payment of Shares to the Escrow Agent for deposit in the Escrow Account. Deposits shall be held in the Escrow Account until such funds are disbursed in accordance with
Section 2, Section 3 or Section 4, as applicable. Prior to disbursement of the funds deposited in the Escrow Account, such funds shall not be subject to claims by creditors of the Company or any of its affiliates.
If any of the Instruments of Payment are returned to the Escrow Agent for nonpayment prior to the satisfaction of the Minimum Amount, the Escrow Agent shall promptly notify the Processing Agent and the Company in writing via mail, email or facsimile
of such nonpayment, and the Escrow Agent is authorized to debit the Escrow Account, as applicable, in the amount of such returned payment as well as any interest earned on the amount of such payment and the Processing Agent shall delete the
appropriate account from the records maintained by the Processing Agent. The Processing Agent will maintain a written account of each sale, which account shall set forth, among other things, the following information: (i) the Subscriber’s
name and address, (ii) the number and class of Shares purchased by such Subscriber, and (iii) the amount paid by such Subscriber for such Shares. Prior to the termination of this Escrow Agreement, neither the Company nor the Dealer Manager
will be entitled to any funds received into the Escrow Account. 
 (b) If at any time on or prior to the Expiration Date (as defined below),
the subscription proceeds received by the Escrow Agent are equal to or greater than $2,000,000, including Shares purchased by the Company’s sponsor, its affiliates and the Company’s officers and directors, but excluding any subscription
proceeds received from Pennsylvania Subscribers and Other Subscribers (“Minimum Amount”), the Escrow Agent shall notify the Company and the Dealer Manager. After the Escrow Agent delivers such notice, the Company shall deliver to
the Escrow Agent a written instruction from an officer of the Company stating that the Minimum Amount has been timely raised and authorizing the delivery of all Subscriber Funds in the Escrow Account to the Company. Thereafter, the Escrow Agent
shall (i) disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing the principal amount of the gross subscription payments from Subscribers received by the Escrow Agent (excluding any such funds received
from Pennsylvania Subscribers and Other Subscribers), and (ii) within five (5) business days after the first business day of the succeeding month, disburse to such Subscribers (other than any Pennsylvania Subscribers and Other Subscribers)
any interest accrued thereon; provided, however, that the Escrow Agent shall not disburse those funds of a Subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, or
otherwise in accordance with the Company’s written request and the Escrow Agent shall have no obligation to return funds to any Subscriber until after it has received an executed and valid IRS Form W-9 executed by the Subscriber. 

(c) After the satisfaction of the provisions of this Section 2 with respect to the disbursement of funds, in the event that the
Company receives subscriptions made payable to the Escrow Agent, subscription proceeds may continue to be received in the Escrow Account, but to the extent that the process shall not be subject to escrow due to the Company reaching the Minimum
Amount, the Pennsylvania Minimum or the Other State Minimum, as the case may be, the proceeds shall not subject to this Escrow Agreement, and at the instruction of the Company to the Escrow Agent, shall be transferred from the Escrow Account or
deposited into, as the case may be, a commercial deposit account in the name of the Company with the Escrow Agent (the “Deposit Account”) that has been previously established by the Company, unless otherwise directed by the Company.
No provisions of this Escrow Agreement shall apply to the Deposit Account. 
 (d) If, as of the close of business on the one year
anniversary of the commencement of the Offering (the “Expiration Date”), the funds in the Escrow Account do not equal or exceed the Minimum Amount, the Escrow Agent shall promptly so notify the Company. Within ten (10) days
following the Company’s receipt of such notice, the Escrow Agent shall promptly return directly to each Subscriber (including, for the avoidance of doubt, any Pennsylvania Subscribers and any Other Subscribers), (i) by check or wire
transfer, the Subscriber Funds deposited in the Escrow Account on behalf of such Subscriber (unless earlier disbursed in accordance with this Escrow Agreement), or (ii) the Instruments of Payment

  
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delivered to the Escrow Agent with respect to such Subscriber’s subscription if such Instrument of Payment has not been processed for collection prior to such time, in either case, together
with any interest income thereon. Notwithstanding the above, in the event the Escrow Agent has not received an executed IRS Form W-9 at such time for each Subscriber, the Escrow Agent shall have no obligation to return funds to any Subscriber until
after it has received an executed and valid IRS Form W-9 executed by the Subscriber and shall remit an amount to the Subscribers in accordance with the provisions hereof, withholding the applicable percentage for backup withholding required by the
Internal Revenue Code, as then in effect, from any interest income on subscription proceeds attributable to each Subscriber for whom the Escrow Agent does not possess an executed IRS Form W-9. However, the Escrow Agent shall not be required to remit
any payments until the Escrow Agent has collected funds represented by such payments. 
  

	3.	Operation of Escrow for Pennsylvania Subscribers. 

 (a) Subject to
Section 2(d) above, funds maintained in the Escrow Account for Pennsylvania Subscribers may only be disbursed in compliance with the provisions of this Section 3. The Escrow Agent shall continue to deposit funds received from
the Pennsylvania Subscribers into the Escrow Account until such time total subscription proceeds from the Offering (including amounts in the Escrow Account previously disbursed as directed by the Company and the amounts then held in the Escrow
Account) from all jurisdictions equal or exceed $50,000,000 (the “Pennsylvania Minimum”), whereupon the Escrow Agent shall promptly so notify the Company. Within ten (10) days following the Company’s receipt of such
notice, the Escrow Agent shall (i) disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing the principal amount of the gross subscription payments from Pennsylvania Subscribers received by the Escrow
Agent, and (ii) within five (5) business days after the first business day of the succeeding month, disburse to such Pennsylvania Subscribers any interest accrued thereon. However, the Escrow Agent shall not disburse to the Company those
funds of a Pennsylvania Subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, or otherwise in accordance with the Company’s written request, and the Escrow Agent shall have no
obligation to return funds to any Pennsylvania Subscriber until after it has received an executed and valid IRS Form W-9 executed by the Pennsylvania Subscriber. 

(b) Notwithstanding any other provision herein to the contrary, if, on the date that is one hundred twenty (120) calendar days after the
date that the Company first accepts a subscription from a Pennsylvania Subscriber (the “Initial Escrow Period”), the Subscriber Funds in the Escrow Account and the Instruments of Payment not yet processed for collection and dated
not later than such date do not provide for total subscription proceeds that equal or exceed the Pennsylvania Minimum, the Escrow Agent shall promptly so notify the Company, and thereafter the Company shall send to each Pennsylvania Subscriber by
certified mail within ten (10) calendar days after the end of the Initial Escrow Period a notification in the form of Exhibit B. If, pursuant to such notification, a Pennsylvania Subscriber requests the return of its subscription funds
within ten (10) calendar days after receipt of the notification (the “Request Period”), the Escrow Agent shall promptly refund directly to such Pennsylvania Subscriber the subscription funds deposited in the Escrow Account on
behalf of such Pennsylvania Subscriber or shall return the Instruments of Payment delivered to the Escrow Agent with respect to such Pennsylvania Subscriber’s subscription but not yet processed for collection prior to such time, to the address
provided by the Dealer Manager or the Company or their respective agents to the Escrow Agent, which the Escrow Agent shall be entitled to rely upon, together with any interest income thereon. Notwithstanding the above, if the Escrow Agent has not
received an executed IRS Form W-9 for such Pennsylvania Subscriber, the Escrow Agent shall have no obligation to return funds to any Pennsylvania Subscriber until after it has received an executed and valid IRS Form W-9 executed by the Pennsylvania
Subscriber and shall thereupon remit an amount to such Pennsylvania Subscriber in accordance with the provisions hereof, withholding the applicable percentage for backup withholding required by the Internal Revenue Code, as then in effect, from any
interest income earned on subscription proceeds attributable to such Pennsylvania Subscriber. However, the Escrow Agent shall not be required to remit such payments until the Escrow Agent has collected funds represented by such payments. 

  
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 (c) The subscription funds of Pennsylvania Subscribers who do not request the return of their
subscription funds within the Request Period shall remain in the Escrow Account for successive 120 calendar day escrow periods (each such successive period a “Successive Escrow Period”), each commencing automatically upon the
termination of the prior Successive Escrow Period, and the Company and Escrow Agent shall follow the notification and payment procedure set forth in Section 3(b) above with respect to the Initial Escrow Period for each Successive Escrow
Period until the occurrence of the earliest of (i) the termination of the Offering, (ii) the receipt and acceptance by the Company of subscriptions for Shares equal to or greater than the Pennsylvania Minimum and the disbursement of the
Subscriber Funds in the Escrow Account on the terms specified herein, or (iii) all subscription funds from Pennsylvania Subscribers held in the Escrow Account having been returned to the Pennsylvania Subscribers in accordance with the
provisions hereof. 
  

	4.	Operation of Escrow for Other Subscribers. 

 Subject to Section 2(d) above,
funds maintained in the Escrow Account for Other Subscribers may only be disbursed in compliance with the provisions of this Section 4. The Escrow Agent shall continue to deposit funds received from the Other Subscribers into the Escrow
Account until such time as the Company notifies the Escrow Agent in writing that total subscription proceeds from the Offering (including amounts in the Escrow Account previously disbursed as directed by the Company and the amounts then held in the
Escrow Account) from all jurisdictions (except for proceeds received from Pennsylvania Subscribers, if the Other State Minimum is less than the Pennsylvania Minimum) equal or exceed such amount required by such other state identified by written
notice from the Company to the Escrow Agent (the “Other State Minimum”), whereupon the Escrow Agent shall disburse to the Company, at the Company’s request, any funds from the Other Subscribers, as applicable, received by the
Escrow Agent for accepted subscriptions, but not those funds of a subscriber whose subscription has been rejected or rescinded of which the Escrow Agent has been notified by the Company, pursuant to Section 2 above or otherwise in
accordance with the Company’s written request. 
  

	5.	Identity of Subscribers. 

 The Company or the Dealer Manager shall furnish to the Escrow
Agent with each delivery of an Instrument of Payment, a list of the Subscribers who have paid for the Shares showing the name, address, tax identification number, amount and class of Shares subscribed for and the amount paid and deposited with the
Escrow Agent. This information comprising the identity of Subscribers shall be provided to the Escrow Agent in the format set forth on Exhibit A to this Escrow Agreement (the “List of Subscribers”). All Subscriber Funds so
deposited shall not be subject to any liens or charges by the Company, the Dealer Manager or the Escrow Agent, or judgments or creditors’ claims against the Company, until released to the Company as hereinafter provided. The Company understands
and agrees that the Company shall not be entitled to any Subscriber Funds on deposit in the Escrow Account and no such funds shall become the property of the Company except when released to the Company pursuant to this Escrow Agreement. The Company,
the Dealer Manager and the Escrow Agent will treat all Subscriber information as confidential. The Escrow Agent shall not be required to accept any funds from Subscribers that are not accompanied by the information on the List of Subscribers. 

 

	6.	Rejected Subscriptions. 

 In the event the Escrow Agent receives written notice from the
Company or the Dealer Manager that the Company or Dealer Manager has rejected a Subscriber’s subscription, the Escrow Agent shall pay 

  
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to the applicable Subscriber, within ten (10) business days after receiving notice of the rejection, by first class United States Mail at the address appearing on the List of Subscribers, or
at such other address or wire instructions as are furnished to the Escrow Agent by the Subscriber in writing, all collected sums paid by the Subscriber for Shares and received by the Escrow Agent, together with all interest earned thereon; provided
the Escrow Agent shall have no obligation to return funds to any Subscriber until after it has received an executed and valid IRS Form W-9 executed by the Subscriber. 
  

	7.	Term of Escrow. 

 Unless otherwise provided in this Escrow Agreement, final termination
of this Escrow Agreement shall occur on the date that (a) all funds held in the Escrow Account are distributed either to the Company or to Subscribers and the Company has informed the Escrow Agent in writing to close the Escrow Account,
(b) all funds held in the Escrow Account are distributed to a successor escrow agent upon written instructions from the Company or (c) the Escrow Agent receives written notice from the Company or the Dealer Manager that the Company
terminated the Offering. After the termination of this Escrow Agreement, the Company and the Dealer Manager shall not deposit, and the Escrow Agent shall not accept, any additional amounts representing payments by prospective Subscribers. 

 

	8.	Duty and Limitation on Liability of the Escrow Agent. 

 (a) The Escrow Agent’s
rights and responsibilities shall be governed solely by this Escrow Agreement. Neither the Offering documents, nor any other agreement or document shall govern the Escrow Agent even if such other agreement or document is referred to herein, is
deposited with, or is otherwise known to, the Escrow Agent. 
 (b) The Escrow Agent shall be under no duty to determine whether the Company
or the Dealer Manager is complying with the requirements of the Offering or applicable securities or other laws in tendering the Subscriber Funds to the Escrow Agent. The Escrow Agent shall not be responsible for, or be required to enforce, any of
the terms or conditions of any Offering document or other agreement between the Company or the Dealer Manager and any other party. 
 (c)
The Escrow Agent may conclusively rely upon and shall be fully protected in acting upon any statement, certificate, notice, request, consent, order, opinion or advice of counsel, or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties. The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or other document. Upon or before the execution of this Escrow Agreement, the
Company and the Dealer Manager shall deliver to the Escrow Agent authorized signers’ lists in the form of Exhibit C to this Escrow Agreement. The Escrow Agent shall not be bound by any notice of demand, or any waiver, modification,
termination or rescission of this Escrow Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it
shall give its prior written consent thereto. The Escrow Agent shall not be responsible, may conclusively rely upon and shall be protected, indemnified and held harmless by the Company and by the Dealer Manager, acting jointly and severally, for the
sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of any document or property received, held or delivered by it hereunder, or of the signature or endorsement thereon, or for any description therein; nor shall
the Escrow Agent be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document, property or this Escrow Agreement. 

(d) The Escrow Agent shall be under no obligation to institute and/or defend any action, suit or proceeding in connection with this Escrow
Agreement unless first indemnified to its satisfaction. 

  
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 (e) The Escrow Agent may consult outside counsel of its own choice with respect to any question
arising under this Escrow Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon the advice of such counsel. 

(f) The Escrow Agent shall not be liable for any action taken or omitted by it except to the extent that a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of loss. 
 (g) The Escrow Agent is
acting solely as escrow agent hereunder and owes no duties, covenants or obligations, fiduciary or otherwise, to any person by reason of this Escrow Agreement, except as otherwise explicitly set forth in this Escrow Agreement, and no implied duties,
covenants or obligations, fiduciary or otherwise shall be read into this Escrow Agreement against the Escrow Agent. The Escrow Agent shall have no duty to enforce any obligation of any person, other than as provided herein. The Escrow Agent shall be
under no liability to anyone by reason of any failure on the part of any party hereto or any maker, endorser or other signatory of any document or any other person to perform such person’s obligations under any such document. The Escrow Agent
is not responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of this Escrow Agreement or with respect to the form of execution of the same. The Escrow Agent shall not be liable for any action taken or omitted
by it, or any action suffered by it to be taken or omitted, in good faith, and in the exercise of its own best judgment. 
 (h) In the event
of any disagreement between any of the parties to this Escrow Agreement, or between any of them and any other person, including any Subscriber, resulting in adverse or conflicting claims or demands being made in connection with the matters covered
by this Escrow Agreement, or in the event that the Escrow Agent is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action
hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to
continue so to refrain from acting until (i) the rights of all interested parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (ii) all differences shall have been adjudged and all doubt resolved
by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons. Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the order, judgment, decree or
levy of any court, with jurisdiction, and the Escrow Agent is hereby authorized in its sole discretion to comply with and obey any such orders, judgments, decrees or levies. In the event that the Escrow Agent shall become involved in any arbitration
or litigation relating to the Subscriber Funds, the Escrow Agent is authorized to comply with any decision reached through such arbitration or litigation. 

(i) In the event that any controversy should arise with respect to this Escrow Agreement, the Escrow Agent shall have the right, at its
option, to institute an interpleader action in any court of competent jurisdiction to determine the rights of the parties. 
 (j) IN NO
EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION. 
 (k) The parties agree that the Escrow Agent had no role in
the preparation of the Offering documents, has not reviewed any such documents, and makes no representations or warranties with respect to the information contained therein or omitted therefrom. 

  
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 (l) The Escrow Agent shall have no obligation, duty or liability with respect to compliance with
any federal or state securities, disclosure or tax laws concerning the Offering documents or the issuance, offering or sale of the Shares. 

(m) The Escrow Agent shall have no duty or obligation to monitor the application and use of the Subscriber Funds once transferred to the
Company, that being the sole obligation and responsibility of the Company. 
  

	9.	Escrow Agent’s Fee. 

 The Escrow Agent shall be entitled to compensation for its
services as stated in the fee schedule attached hereto as Exhibit D, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder is intended as full compensation for the Escrow Agent’s
services as contemplated by this Escrow Agreement; provided, however, that in the event that the conditions for the disbursement of funds under this Escrow Agreement are not fulfilled, or the Escrow Agent renders any material service not
contemplated in this Escrow Agreement, or there is any assignment of interest in the subject matter of this Escrow Agreement, or any material modification hereof, or if any material controversy arises hereunder, or the Escrow Agent is made a party
to any litigation relating to this Escrow Agreement, or the subject matter hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney’s
fees and expenses, occasioned by any delay, controversy, litigation or event, and the same shall be paid by the Company. The Company’s obligations under this Section 9 shall survive the resignation or removal of the Escrow Agent and
the assignment or termination of this Escrow Agreement. 
  

	10.	Investment of Subscriber Funds; Income Allocation and Reporting. 

 (a) The Escrow Agent
shall invest the Subscriber Funds, including any and all interest and investment income, in accordance with the written instructions provided to the Escrow Agent and signed by the Company. In the absence of written investment instructions from the
Company, the Escrow Agent shall deposit and invest the Subscriber Funds, including any and all interest and investment income, in UMB Money Market Special, a UMB money market deposit account. Any interest received by the Escrow Agent with respect to
the Subscriber Funds, including reinvested interest shall become part of the Subscriber Funds, and shall be disbursed pursuant to this Escrow Agreement. The Company agrees that, for tax reporting purposes, all interest or other taxable income earned
on the Subscriber Funds in any tax year shall be taxable to the Company. Notwithstanding anything herein to the contrary, funds in the Escrow Account may only be invested in “Short Term Investments” in compliance with Rule 15c2-4 of the
Securities Exchange Act of 1934, as amended 
 (b) The Escrow Agent shall be entitled to sell or redeem any such investments as the Escrow
Agent deems necessary to make any payments or distributions required under this Escrow Agreement. The Escrow Agent shall have no responsibility or liability for any loss which may result from any investment or sale of investment made pursuant to
this Escrow Agreement. The parties acknowledge that the Escrow Agent is not providing investment supervision, recommendations, or advice. 

(c) At any time pursuant to this Escrow Agreement interest income earned on Subscriber Funds deposited in the Escrow Account (“Escrow
Income”) is to be paid to a Subscriber, the Escrow Agent shall promptly provide directly to such Subscriber the amount of Escrow Income payable to such Subscriber; provided that the Escrow Agent is in possession of such Subscriber’s
executed IRS Form W-9. In the event an executed IRS Form W-9 is not received for each Subscriber the Escrow Agent shall have no obligation to return Escrow Income to any Subscriber until after it has received an executed and valid IRS

  
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Form W-9 executed by the Subscriber and shall remit an amount to the Subscribers in accordance with the provisions hereof, withholding the applicable percentage for backup withholding required by
the Internal Revenue Code, as then in effect, from any Escrow Income attributable to those Subscribers for whom the Escrow Agent does not possess an executed IRS Form W-9. Escrow Income shall be remitted to Subscribers at the address provided by the
Dealer Manager or the Company to the Escrow Agent, which the Escrow Agent shall be entitled to rely upon, and without any deductions for escrow expenses. 

(d) The Company agrees to indemnify and hold the Escrow Agent harmless from and against any and all taxes, additions for late payment,
interest, penalties and other expenses that may be assessed against the Escrow Agent on or with respect to the Subscriber Funds unless any such tax, addition for late payment, interest, penalties and other expenses shall be determined by a court of
competent jurisdiction to have been primarily caused by the Escrow Agent’s gross negligence or willful misconduct. The terms of this paragraph shall survive the assignment or termination of this Escrow Agreement and the resignation or removal
of the Escrow Agent. 
  

	11.	Notices. 

 All notices, requests, demands, and other communications under this Escrow
Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the business day of transmission if sent by facsimile to the
facsimile number given below, with written confirmation of receipt, (c) on the business day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service, or
(d) on the fifth business day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows,
provided, however, that notice to the Escrow Agent will be deemed given upon receipt by the Escrow Agent: 
  

			
	If to the Company:	  	 Steadfast Apartment REIT III, Inc.
 18100 Von
Karman Avenue, Suite 500
 Irvine, CA 92612
 Attn: Treasurer

Phone: (949) 852-0700
 Facsimile: (949) 852-0143

		
	If to Dealer Manager:	  	 Steadfast Capital Markets Group, LLC
 18100 Von
Karman Avenue, Suite 500
 Irvine, CA 92612
 Attn: Compliance
Officer
 Phone: (949) 852-0700
 Facsimile: (949)
852-0143

		
	If to Escrow Agent:	  	 UMB Bank, N.A.
 1010 Grand Blvd, 4th Floor

Mail Stop: 1020409
 Kansas City, MO 64106

Attn: Lara Stevens
 Phone: (816) 860-3017

Facsimile: (816) 860-3029

 Any party may change its address for purposes of this Section 11 by giving the other party written notice of the
new address in the manner set forth above. 

  
 9 

	12.	Indemnification of Escrow Agent. 

 The Company and the Dealer Manager hereby jointly and
severally indemnify, defend and hold harmless the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees and expenses, which the Escrow Agent may suffer or incur
by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to this Escrow Agreement or any transaction to which this Escrow Agreement relates unless such loss, liability, cost, damage or
expense is finally determined by a court of competent jurisdiction to have been primarily caused by the gross negligence or willful misconduct of the Escrow Agent. The terms of this Section 12 shall survive the assignment or termination
of this Escrow Agreement and the resignation or removal of the Escrow Agent. 
  

	13.	Resignation. 

 The Escrow Agent may resign upon thirty (30) calendar days’
advance written notice to the Company. If a successor escrow agent is not appointed within the thirty (30) calendar day period following such notice, the Escrow Agent may petition any court of competent jurisdiction to name a successor escrow
agent or interplead the Subscriber Funds with such court, whereupon the Escrow Agent’s duties hereunder shall terminate. 
  

	14.	Successors and Assigns. 

 Except as otherwise provided in this Escrow Agreement, no party
hereto shall assign this Escrow Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and
effect. This Escrow Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. Any corporation or association into which the Escrow Agent may be converted or merged, or with which it
may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets in whole or in part, or any corporation or association resulting from any such conversion, sale, merger, consolidation or
transfer to which the Escrow Agent is a party, shall be and become the successor escrow agent under this Escrow Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution
or filing of any instrument or paper or the performance any further act. 
  

	15.	Governing Law; Jurisdiction. 

 This Escrow Agreement shall be construed, performed, and
enforced in accordance with, and governed by, the internal laws of the State of California, without giving effect to the principles of conflicts of laws thereof. 
  

	16.	Severability. 

 In the event that any part of this Escrow Agreement is declared by any
court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Escrow Agreement shall remain in full force and effect. 

 

	17.	Amendments; Waivers. 

 This Escrow Agreement may be amended or modified, and any of the
terms, covenants, representations, warranties, or conditions hereof may be waived, only by a written instrument executed by 

  
 10 

 
the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or
warranty contained in this Escrow Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation, or
warranty of this Escrow Agreement. The Company and the Dealer Manager agree that any requested waiver, modification or amendment of this Escrow Agreement shall be consistent with the terms of the Offering. 

 

	18.	Entire Agreement. 

 This Escrow Agreement contains the entire understanding among the
parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow. 

 

	19.	References to Escrow Agent. 

 No printed or other matter in any language (including,
without limitation, the Offering document, any supplement or amendment relating thereto, notices, reports and promotional material) which mentions the Escrow Agent’s name or the rights, powers, or duties of the Escrow Agent shall be issued by
the Company or the Dealer Manager, or on the Company’s or Dealer Manager’s behalf unless the Escrow Agent shall first have given its specific written consent thereto. 

 

	20.	Section Headings. 

 The section headings in this Escrow Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this Escrow Agreement. 
  

	21.	Counterparts. 

 This Escrow Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same instrument. 
  

	22.	Electronic Transactions. 

 The parties hereto agree that the transactions described
herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such
original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 
  

	23.	Patriot Act Compliance; Tax Matters. 

 Pursuant to the subscription agreement completed
by Subscribers, the Company and the Dealer Manager agree to provide the Escrow Agent completed IRS Forms W-9 (or IRS Forms W-8, in the case of non-U.S. persons) and other forms and documents that the Escrow Agent may reasonably request
(collectively, “Tax Reporting Documentation”) at the time of execution of this Escrow Agreement and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time.
The parties hereto understand that if such Tax Reporting Documentation is not so certified to the Escrow Agent, the Escrow Agent may be required by the Internal Revenue Code, as it may be amended from time to time, to withhold a portion of any
interest or other income earned on the investment of monies or other property held by the Escrow Agent pursuant to this Escrow Agreement. The 

  
 11 

 
Company shall be treated as the owner of the Subscriber Funds for federal and state income tax purposes and the Company will report all income, if any, that is earned on, or derived from, the
Subscriber Funds as its income, in such proportions, in the taxable year or years in which such income is properly includible and pay any taxes attributable thereto. 

[Signature page follows] 

  
 12 

 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed
the day and year first set forth above. 
  

			
	STEADFAST APARTMENT REIT III, INC.
	
	  

	Name:	 	Kevin J. Keating
	Title:	 	Treasurer
	
	 STEADFAST CAPITAL MARKETS GROUP, LLC,

as Dealer Manager

	
	  

	Name:	 	Phillip D. Meserve
	Title:	 	President and CEO
	
	UMB BANK, N.A., as Escrow Agent
	
	  

	Name:	 	Casey Gunning
	Title:	 	Senior Vice President

  
 13 

 EXHIBIT A 

LIST OF SUBSCRIBERS 
 Pursuant to the
Escrow Agreement dated             , 2015 by and between Steadfast Apartment REIT III, Inc. (the “Company”), Steadfast Capital Markets Group, LLC (the “Dealer
Manager”) and UMB Bank, N.A., as escrow agent (the “Escrow Agent”), the Company and the Dealer Manager hereby certify that the following investors have paid money for the purchase of the Shares in the Company and the money
has been deposited with the Escrow Agent: 
  

	1.	Name of Subscriber: 

 Address: 

Tax Identification Number: 

Amount and class of Securities subscribed for: 

Amount of money paid and deposited with Escrow Agent: 
  

	2.	Name of Subscriber: 

 Address: 

Tax Identification Number: 

Amount and class of Securities subscribed for: 

Amount of money paid and deposited with Escrow Agent: 
  

			
	STEADFAST CAPITAL MARKETS GROUP, LLC,
	as Dealer Manager
		
	By:	 	  

		
	Its:	 	
	
	STEADFAST APARTMENT REIT III, INC.
		
	By:	 	  

		
	Its:	 	

  
 14 

 EXHIBIT B 

FORM OF NOTICE TO PENNSYLVANIA SUBSCRIBERS 

Name: 
 Address: 

Dear                    : 

You have tendered a subscription to purchase shares of common stock of Steadfast Apartment REIT III, Inc. (the “Company”).
Your subscription is currently being held in escrow. The guidelines of the Pennsylvania Securities Commission do not permit the Company to accept subscriptions from Pennsylvania residents until an aggregate of $50,000,000 of gross offering proceeds
(the “Pennsylvania Minimum”) have been received by the Company. The Pennsylvania guidelines provide that until this minimum amount of offering proceeds is received by the Company, every one hundred twenty (120) calendar days
during the offering period Pennsylvania Subscribers may request that their subscription be returned. 
 If you wish to continue your
subscription in escrow until the Pennsylvania Minimum subscription amount is received, nothing further is required. 
 If you wish to
terminate your subscription for the Company’s common stock and have your subscription returned to you please so indicate by signing, dating and returning this notice to the Company’s escrow agent at the following address: 

UMB Bank, N.A. 
 1010 Grand Blvd,
4th Floor 
 Mail Stop: 1020409 

Kansas City, MO 64106 
 Attn:
             
 * * * 

I hereby terminate my prior subscription to purchase shares of common stock of Steadfast Apartment REIT III, Inc. and request the return of my
subscription funds. I certify to Steadfast Apartment REIT III, Inc. that I am a resident of Pennsylvania. 
  

			
	Signature:	 	  

		
	Name:	 	  

		
	Date:	 	  

  
 15 

 EXHIBIT C 

CERTIFICATE AS TO AUTHORIZED SIGNATURES 

Account Name:                      Subscription Escrow

 The specimen signatures shown below are the specimen signatures of the individuals who have been designated as Authorized Representatives of, and are
authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Steadfast Apartment REIT III, Inc. 
  

					
	Name/Title	 	 	 	Specimen Signature
			
	  
	 		 	  

			
	  
	 		 	  

			
	  
	 		 	  

			
	  
	 		 	  

  
 16 

 EXHIBIT D 

ESCROW AGENT FEE 
  

			
	 Acceptance Fee
	  	
	 Review escrow agreement, establish account
	  	$3,000
		
	 Annual Fees
	  	
	 Annual Escrow Agent
	  	$3,000
		
	 Transactional Fees
	  	
	 Outgoing Wire Transfer
	  	$35 each
	 Overnight Delivery/Mailings
	  	$16.50 each
	 IRS Tax Reporting
	  	$10 per 1099

 Acceptance fee and first year Annual Escrow Agent fee will be payable at the initiation of the escrow. Thereafter, the Annual
Escrow Agent fees will be billed in advance and transactional fees, if any, will be billed in arrears. Other fees and expenses will be billed as incurred. 

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not
limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate. In addition to the specified
fees, all expenses related to the administration of the Escrow Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees,
accounting fees, etc., will be reimbursable. 

  
 17

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