SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934*

Paramount Group, Inc.

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

69924R108

(CUSIP Number)

Thomas Armbrust

KG CURA Vermögensverwaltung, G.m.b.H. & Co.

Werner-Otto-Straße 1-7

D-22179 Hamburg, Germany

+49 (40) 6461-3270

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

Copy to:

Gregory B. Astrachan, Esq.

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

(212) 728-8608

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 24, 2014

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.

CUSIP No. 69924R108 Page 2 of 12 Pages

1	NAMES OF REPORTING PERSONS Alexander Otto I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☑ (b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Germany
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 13,656,206 shares
	8	SHARED VOTING POWER 489,289 shares*
	9	SOLE DISPOSITIVE POWER 13,656,206 shares
	10	SHARED DISPOSITIVE POWER 489,289 shares*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,145,495 shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.7%**
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

* Alexander Otto, as sole shareholder of AROSA Vermoegensverwaltungsgesellschaft m.b.H., exercises voting power and dispositive power over all 489,289 shares of common stock, par value $0.01 per share, of Paramount Group, Inc., a Maryland corporation (“Common Stock”), directly held by AROSA Vermoegensverwaltungsgesellschaft m.b.H. See Item 5.

* * The Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons and, therefore, may be deemed to beneficially own the 33,115,587 shares of Common Stock held by all of the Reporting Persons in the aggregate, representing 15.6% of the shares of Common Stock outstanding. See Item 5.

CUSIP No. 69924R108 Page 3 of 12 Pages

1	NAMES OF REPORTING PERSONS AROSA Vermoegensverwaltungsgesellschaft m.b.H. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☑ (b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Germany
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 489,289 shares*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 489,289 shares*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 489,289 shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.2%**
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO

* Alexander Otto, as sole shareholder of AROSA Vermoegensverwaltungsgesellschaft m.b.H., exercises voting power and dispositive power over all 489,289 shares of Common Stock directly held by AROSA Vermoegensverwaltungsgesellschaft m.b.H. See Item 5.

* * The Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons and, therefore, may be deemed to beneficially own the 33,115,587 shares of Common Stock held by all of the Reporting Persons in the aggregate, representing 15.6% of the shares of Common Stock outstanding. See Item 5.

CUSIP No. 69924R108 Page 4 of 12 Pages

1	NAMES OF REPORTING PERSONS Katharina Otto-Bernstein I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☑ (b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS) PF, OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Germany
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 11,831,489 shares
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 11,831,489 shares
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11,831,489 shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.6%*
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

* The Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons and, therefore, may be deemed to beneficially own the 33,115,587 shares of Common Stock held by all of the Reporting Persons in the aggregate, representing 15.6% of the shares of Common Stock outstanding. See Item 5.

CUSIP No. 69924R108 Page 5 of 12 Pages

1	NAMES OF REPORTING PERSONS Maren Otto I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☑ (b) ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS) PF, OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Germany
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 7,138,603 shares
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 7,138,603 shares
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,138,603 shares
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.4%*
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

* The Reporting Person may be deemed to be a member of a “group” with the other Reporting Persons and, therefore, may be deemed to beneficially own the 33,115,587 shares of Common Stock held by all of the Reporting Persons in the aggregate, representing 15.6% of the shares of Common Stock outstanding. See Item 5.

Item 1. Security and Issuer.

This statement on Schedule 13D (this “Schedule 13D”) relates to the common stock, par value $0.01 per share (“Common Stock”), of Paramount Group, Inc., a Maryland corporation (the “Issuer”). The address of the Issuer’s principal executive offices is 1633 Broadway, Suite 1801, New York, New York 10019.

Item 2. Identity and Background.

(a) This Schedule 13D is being filed on behalf of AROSA Vermoegensverwaltungsgesellschaft m.b.H., a German limited liability company (“AROSA”), Alexander Otto, the sole shareholder of AROSA, Katharina Otto-Bernstein and Maren Otto (collectively, the “Reporting Persons”). Each of Thomas Armbrust, Thomas Finne and Henning Eggers is a Managing Director of AROSA.

(b) The principal business address of AROSA is Werner-Otto-Straße 1-7, D-22179 Hamburg, Germany. The principal business address of Mr. Otto is c/o ECE Projektmanagement G.m.b.H & Co. KG, Heegbarg 30, 22391 Hamburg, Germany. The principal business address of each of Ms. Otto, Ms. Otto-Bernstein, Mr. Armbrust, Dr. Finne and Mr. Eggers is c/o KG CURA Vermögensverwaltung, G.m.b.H. & Co., Werner-Otto-Straße 1-7, D-22179 Hamburg, Germany.

(c) The principal business of AROSA is holding investments related to the management of real estate. Mr. Otto is primarily engaged in the business of managing real estate investment businesses and properties. He is part-owner and the Chief Executive Officer of ECE Projektmanagement G.m.b.H & Co. KG (“ECE”), one of Europe’s leading firms in developing and managing international shopping centers. Ms. Otto-Bernstein is primarily engaged in the business of film production. In connection with the IPO (as defined below), she became a director of the Issuer on November 19, 2014. She is also part-owner of ECE and the President of Film Manufacturers Inc., an international production company. Each of Ms. Otto, Mr. Armbrust, Dr. Finne and Mr. Eggers is primarily engaged in the business of managing real estate investment businesses and properties. Ms. Otto is also part-owner of ECE. Mr. Armbrust is the Chairman of the Supervisory Board of ECE and a director of the Issuer. Each of Mr. Armbrust, Dr. Finne and Mr. Eggers is a Managing Director of KG CURA Vermögensverwaltung, G.m.b.H. & Co. (“KG Cura”), a real estate management firm, and a director of certain entities comprising the Issuer’s predecessor entities and their affiliates.

(d-e) During the last five years, none of the Reporting Persons, nor any of the directors or executive officers of AROSA, (i) has been charged or convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or became subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or a finding of any violation with respect to such laws.

(f) Mr. Otto, Ms. Otto-Bernstein, Ms. Otto (together, the “Otto Family Members”), Mr. Armbrust, Dr. Finne and Mr. Eggers are citizens of Germany. AROSA is a limited liability company organized under the laws of Germany.

Item 3. Source and Amount of Funds or Other Consideration.

The information set forth in Item 4 hereof is hereby incorporated by reference into this Item 3, as applicable.

Item 4. Purpose of Transaction. 

Formation Transactions

On November 24, 2014, the Issuer completed the issuance and sale of 150,650,000 shares of Common Stock, pursuant to its initial public offering (the “IPO”) at a price to the public of $17.50 per share, including 19,650,000 shares of Common Stock sold pursuant to the exercise in full of the underwriters’ over-allotment option. These shares were offered pursuant to a Registration Statement on Form S-11 (Registration No. 333-198392), initially publicly filed on August 27, 2014 by the Issuer with the United States Securities and Exchange Commission (the “Commission”), and which, as amended, was declared effective by the Commission on November 18, 2014. The prospectus (the “Prospectus”) for the IPO was filed with the Commission on November 20, 2014 pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933, as amended.

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In connection with the IPO, on November 24, 2014, the Issuer, the Reporting Persons and certain entities controlled by the Reporting Persons engaged in substantially contemporaneous transactions through which the Reporting Persons acquired shares of Common Stock, and the Issuer acquired its initial portfolio of properties and other assets (the “Formation Transactions”). The Reporting Persons acquired the shares of Common Stock described herein for investment purposes. The following summaries of the agreements pursuant to which the Formation Transactions were effectuated are not intended to be complete, and this Schedule 13D does not purport to amend, qualify or in any way modify such agreements.

PGI Merger Agreement

Paramount Group, Inc., a Delaware corporation (“PGI”), the Issuer and the Otto Family Members entered into a merger agreement (the “PGI Merger Agreement”), dated as of November 6, 2014, pursuant to which Ms. Otto, Ms. Otto-Bernstein and Mr. Otto received the right to obtain 4,439,560, 8,790,327 and 12,924,560 shares of Common Stock, respectively, upon the closing of the merger of PGI with and into the Issuer (the “PGI Merger”). On November 24, 2014, Ms. Otto, Ms. Otto-Bernstein and Mr. Otto exercised this right and obtained all of the foregoing shares of Common Stock, subject to an indemnity holdback, immediately following the surrender of all of their equity interests in PGI (the “PGI Shares”) and the PGI Merger. The PGI Merger Agreement, attached hereto as Exhibit 1, is incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

Cosmos Merger Agreement

Ms. Otto-Bernstein entered into a merger agreement (the “Cosmos Merger Agreement”), dated as of November 6, 2014, with the Issuer and Cosmos Rental Investments, Inc., a Delaware corporation wholly owned by Ms. Otto-Bernstein (“Cosmos”), pursuant to which she received the right to obtain 1,898,305 shares of Common Stock upon the closing of the merger of Cosmos with and into the Issuer (the “Cosmos Merger”). On November 24, 2014, Ms. Otto-Bernstein exercised this right and obtained all of the foregoing shares of Common Stock, subject to an indemnity holdback, immediately following the surrender of all of her equity interests in Cosmos and the Cosmos Merger. The Cosmos Merger Agreement, a copy of which is attached hereto as Exhibit 2, is incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

Marathon Contribution Agreement & Marathon Merger Agreement

On November 6, 2014, Ms. Otto and Marathon Rental Investments, Inc., a Delaware corporation wholly owned by Ms. Otto (“Marathon Corp.”), entered into a contribution agreement (the “Marathon Contribution Agreement”) with the Issuer, pursuant to which Marathon Corp. contributed substantially all of its assets and liabilities to the Issuer. Following such contribution and the subsequent conversion of Marathon Corp. into Marathon Rental Investments LLC, a Delaware limited liability company (“Marathon LLC”), Ms. Otto entered into a merger agreement, dated as of November 24, 2014, with the Issuer and Marathon LLC, pursuant to which she received the right to obtain 2,013,329 shares of Common Stock upon the closing of the merger of Marathon LLC with and into the Issuer (the “Marathon Merger”). On November 24, 2014, Ms. Otto exercised this right and obtained all of the foregoing shares of Common Stock, subject to an indemnity holdback, immediately following the surrender of all of her equity interests in Marathon LLC and the Marathon Merger. The Marathon Contribution Agreement and the Marathon Merger Agreement, copies of which are respectively attached hereto as Exhibits 3 and 4, are incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

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Arcade Contribution Agreement & Arcade Merger Agreement

On November 6, 2014, AROSA and Arcade Rental Investments, Inc., a Delaware corporation wholly owned by AROSA (“Arcade Corp.”), entered into a contribution agreement (the “Arcade Contribution Agreement”) with the Issuer, pursuant to which Arcade Corp. contributed substantially all of its assets and liabilities to the Issuer. Following such contribution and the subsequent conversion of Arcade Corp. into Arcade Rental Investments LLC, a Delaware limited liability company (“Arcade LLC”), AROSA entered into a merger agreement, dated as of November 24, 2014, with the Issuer and Arcade LLC, pursuant to which AROSA received the right to obtain 489,289 shares of Common Stock upon the closing of the merger of Arcade LLC with and into the Issuer (the “Arcade Merger”). On November 24, 2014, AROSA exercised this right and obtained the foregoing shares of Common Stock, subject to an indemnity holdback, immediately following the surrender of all of its equity interests in Arcade LLC and the Arcade Merger. The Arcade Contribution Agreement and the Arcade Merger Agreement, copies of which are respectively attached hereto as Exhibits 5 and 6, are incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

Arcade 2 Transaction Agreements

On November 6, 2014, Mr. Otto and Arcade Rental Investments 2, Inc., a Delaware corporation wholly owned by Mr. Otto (“Arcade 2 Corp.”), entered into a contribution agreement (the “Arcade 2 Contribution Agreement”) with the Issuer, pursuant to which Arcade 2 Corp. contributed substantially all of its assets and liabilities to the Issuer. Following such contribution and the subsequent conversion of Arcade 2 Corp. into Arcade Rental Investments 2 LLC, a Delaware limited liability company (“Arcade 2 LLC”), Mr. Otto entered into a merger agreement, dated as of November 24, 2014, with the Issuer and Arcade 2 LLC, pursuant to which he received the right to obtain 699,986 shares of Common Stock upon the closing of the merger of Arcade 2 LLC with and into the Issuer (the “Arcade 2 Merger”). On November 24, 2014, Mr. Otto exercised this right and obtained the foregoing shares of Common Stock, subject to an indemnity holdback, immediately following the surrender of all of his equity interests in Arcade 2 LLC and the Arcade 2 Merger. The Arcade 2 Contribution Agreement and the Arcade 2 Merger Agreement, copies of which are respectively attached hereto as Exhibits 7 and 8, are incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

Grants & Private Share Purchases

Share Purchase Agreement

Ms. Otto, Ms. Otto-Bernstein, Mr. Armbrust, Dr. Finne, the Werner Otto Trust and Gerd Walendy entered into a share purchase agreement with the Issuer (the “Share Purchase Agreement”), dated as of November 6, 2014, pursuant to which Ms. Otto, Ms. Otto-Bernstein, Mr. Armbrust and Dr. Finne agreed to purchase 685,714, 1,142,857, 128,571 and 14,285 shares of Common Stock, respectively, for aggregate purchase prices of $12,000,000.00, $20,000,000.00, $2,250,000.00 and $250,000.00, respectively, at a per share price of $17.50, concurrently with, and subject to, the consummation of the IPO. The Share Purchase Agreement, a copy of which is attached hereto as Exhibit 9, is incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

Grant to Thomas Armbrust

On November 24, 2014, Mr. Armbrust received 5,714 shares of restricted shares of Common Stock concurrently with the completion of the IPO in connection with his service as a director of the Issuer.

Other Operative Agreements

The following summaries of the Registration Rights Agreement, Lock-Up Agreements and Stockholders Agreement are not intended to be complete, and this Schedule 13D does not purport to amend, qualify or in any way modify such agreements. The Registration Rights Agreement, form of Lock-Up Agreement (for continuing investors), form of Lock-Up Agreement (for directors and management) and Stockholders Agreement, copies of which are respectively attached hereto as Exhibits 10, 11, 12 and 13, are incorporated herein by reference, and the summaries contained herein are qualified in their entirety by reference thereto.

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Registration Rights Agreement

On November 6, 2014, the Issuer entered into a Registration Rights Agreement with several entities and individuals, including the Otto Family Members and AROSA (the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Holders (as defined therein), which include the Otto Family Members and AROSA, have the right to cause the Issuer to register with the Commission for resale the shares of Common Stock received from time to time, defined therein as the “Registrable Securities,” and including the shares of Common Stock received by the Otto Family Members and AROSA in the Formation Transactions and, with respect to Ms. Otto and Ms. Otto-Bernstein, the concurrent private placement. Pursuant to the terms of the Registration Rights Agreement, beginning 14 months after the closing date of the IPO, the parties thereto will have the right to demand that the Issuer register the resale and/or facilitate an underwritten offering of their Registrable Securities; provided that the demand relates to Registrable Securities having a market value of at least $40 million and that such parties may not make more than two such demands in any consecutive 12-month period. In addition, beginning 14 months after the closing date of the IPO, upon the request of one or more parties owning at least 1.0% of the total outstanding Common Stock of the Issuer, the Issuer has agreed to file a shelf registration statement registering the offering and sale of such parties’ Registrable Securities on a delayed or continuous basis, or a resale shelf registration statement, and maintain the effectiveness of the resale shelf registration statement for as long as the securities registered thereunder continue to qualify as Registrable Securities under the Registration Rights Agreement. The Issuer has the right, subject to certain limitations, to delay any demand for an underwritten offering by the parties thereto in the event that the Issuer intends to effect its own underwritten offering, and the Registration Rights Agreement does not provide the parties with any piggyback registration rights. The Issuer will bear all expenses incident to registering the shares, except such expenses shall not include any transfer taxes, underwriting, brokerage or similar fees, discounts or commissions or out-of-pocket expenses incurred by the parties exercising their registration rights. The Registration Rights Agreement also includes customary cross-indemnification provisions relating to liabilities under the applicable securities laws incurred in connection with the registration of any Registrable Securities. Any party to the agreement may transfer its rights to one or more members of the Otto family, any trust or family foundation established in favor of such individuals and entities owned and controlled by members of the Otto family. The Registration Rights Agreement will terminate when the Registrable Securities all may be sold under Rule 144 within 90 days and constitute less than the lesser of 5.0% of the total outstanding shares of Common Stock or $40 million (based on the average Market Value, as defined therein, over a period of 10 consecutive trading days).

Lock-Up Agreements

Pursuant to certain agreements by and between the Reporting Persons and the underwriters of the IPO (the “Lock-up Agreements”), the Reporting Persons have each agreed not to, directly or indirectly, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise dispose of or transfer any Common Stock or securities convertible into or exercisable or exchangeable for Common Stock, including common units, (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock, including common units, (iii) exercise any rights with respect to the registration of any of the locked-up securities, or (iv) file, or cause to be filed, any registration statement under the Securities Act with respect to the locked-up securities, in each case, during a period of 180 days from the date of the Prospectus. The foregoing lock-up provision applies to Common Stock and to securities convertible into or exchangeable or exercisable for or repayable with Common Stock, including common units. Subject to exceptions for certain continuing investors, it also applies to Common Stock owned now or acquired later by the person executing the Lock-up Agreement or for which the person executing the Lock-Up Agreement later acquires the power of disposition.

Stockholders Agreement

The Issuer entered into a stockholders agreement with the Otto Family Members, dated November 6, 2014, which provides the Otto Family Members and their permitted assignees with the right, collectively, to designate up to three director nominees to the Board of Directors of the Issuer (the “Stockholders Agreement”). The number of director nominees that the Otto Family Members and their permitted assignees have the right to designate may be reduced in the future, as follows, based on reductions in the percentage of the total outstanding shares of Common Stock owned by (i) the Otto Family Members, (ii) their lineal descendants or (iii) the entities they own or control collectively following the closing of the IPO (collectively, the “Related Otto Parties”):

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• from and after the time that the shares of Common Stock owned by the Related Otto Parties has been 3.25% less of the total outstanding Common Stock of the Issuer than the initial Otto family ownership percentage following the closing of the IPO for a period of 12 consecutive months, the number of director nominees that the Otto Family Members and their permitted assignees will have the right to designate will be reduced to two;

• from and after the time that the shares of Common Stock owned by the Related Otto Parties has been 6.50% less of the total outstanding Common Stock of the Issuer than the initial Otto family ownership percentage following the closing of the IPO for a period of 12 consecutive months, the number of director nominees that the Otto Family Members and their permitted assignees will have the right to designate will be reduced to one; and

• from and after the time that the shares of Common Stock owned by the Related Otto Parties has been 9.75% less of the total outstanding Common Stock of the Issuer than the initial Otto family ownership percentage following the closing of the IPO for a period of 12 consecutive months, the rights to designate director nominees under the Stockholders Agreement will cease, and the Stockholders Agreement will terminate.

The initial Otto family ownership percentage, approximately 14.8%, is based on the shares of Common Stock received in the Formation Transactions by the Related Otto Parties. Other than transfers or assignments with other Related Otto Parties, each of the Related Otto Parties does not have the right to transfer or assign any rights under the Stockholders Agreement without the consent of a majority of the directors that are not affiliated with the Related Otto Parties.

Communications

As a result of the Reporting Persons’ ongoing review and evaluation of the business of the Issuer, the Reporting Persons may communicate with other members of the Issuer’s Board of Directors, members of the Issuer’s management and/or other stockholders of the Issuer from time to time with respect to operational, strategic, financial or governance matters or otherwise work with management and the Issuer’s Board of Directors to create stockholder value.

Plans or Proposals

Other than as described in this Item 4, the Reporting Persons do not have any current plans or proposals that relate to or that would result in any of the transactions or other matters specified in clauses (a) through (j) of Item 4 of Schedule 13D; provided that each of the Reporting Persons may, at any time, review or reconsider his, her or its position with respect to the Issuer and reserve the right to develop such plans or proposals.

Item 5. Interests of Securities of the Issuer.

(a-b) The information set forth in Item 4 is incorporated by reference.

All calculations of percentages of beneficial ownership in this Item 5 and elsewhere in this Schedule 13D are based on the 211,897,023 shares of Common Stock issued in the initial public offering, the formation transactions and the concurrent private placements, all as provided in the Prospectus and the Issuer’s Form 8-K, dated as of November 18, 2014, which includes (a) 131,000,000 shares of Common Stock issued in the IPO, (b) 57,327,026 shares of Common Stock issued in connection with the formation transactions described in the Prospectus, (c) 3,914,283 shares of Common Stock issued in connection with the concurrent private placements, (d) 5,714 shares of restricted stock granted to a non-employee director concurrently with the completion of the IPO and (e) 19,650,000 shares of Common Stock issued in connection with the exercise in full of the underwriters’ option to purchase an additional 19,650,000 shares of Common Stock from the Issuer to cover over-allotments in the IPO, and which excludes (i) 1,500,000 shares underlying options granted to the Issuer’s executive officers and other employees prior to or concurrently with the completion of the IPO, (ii) shares available for future issuance under the Issuer’s 2014 Equity Incentive Plan and (iii) 51,752,973 shares of the Issuer’s common stock that may be issued, at the Issuer’s option, upon exchange of 46,810,117 common units in the operating partnership to be issued in the formation transactions and 4,942,856 common units in the operating partnership that, subject to the satisfaction of certain conditions, are issuable upon conversion of 4,942,856 LTIP units to be granted to the Issuer’s executive officers, non-employee directors and employees concurrently with the completion of the IPO – all as described in the Prospectus.

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By virtue of the various agreements and arrangements among the Reporting Persons described in this Schedule 13D, the Reporting Persons may be deemed to constitute a “group” within the meaning of Section 13(d)(3) under the Act and Rule 13d-5(b)(1) thereunder, and each member of the “group” may be deemed to beneficially own all shares of Common Stock held by all members of the “group.” Accordingly, each of the Reporting Persons may be deemed to beneficially own 33,115,587 shares of Common Stock, constituting beneficial ownership of 15.6% of the shares of the Common Stock.

As of the close of business on November 24, 2014, AROSA directly held 489,289 shares of Common Stock, representing approximately 0.2% of the shares of Common Stock, and Mr. Otto directly held 13,656,206 shares of Common Stock, representing approximately 6.4% of the shares of Common Stock. Mr. Otto, the sole shareholder of AROSA, exercises voting power and dispositive power with respect to all shares of Common Stock owned by AROSA. In total, Mr. Otto exercises voting and dispositive power over 14,145,495 shares of Common Stock, representing approximately 6.7% of the shares of Common Stock.

As of the close of business on November 24, 2014, Ms. Otto-Bernstein directly held 11,831,489 shares of Common Stock, representing approximately 5.6% of the shares of Common Stock. As of the close of business on November 24, 2014, Ms. Otto directly held 7,138,603 shares of Common Stock, representing approximately 3.4% of the shares of Common Stock. As of the close of business on November 24, 2014, Mr. Armbrust directly held 134,285 shares of Common Stock, representing approximately 0.06% of the shares of Common Stock. As of the close of business on November 24, 2014, Dr. Finne directly held 14,285 shares of Common Stock, representing approximately 0.006% of the shares of Common Stock. Ms. Otto-Bernstein, Ms. Otto, Mr. Armbrust and Dr. Finne exercise sole voting power and sole dispositive power with respect to all shares of Common Stock that they each respectively hold directly.

(c)     On November 18, 2014, Mr. Otto received 30,660 shares of Common Stock following the Issuer’s declaration of a dividend. Except as described in this Item 5(c) and Item 4, none of the Reporting Persons, nor, to their knowledge, any of the directors or executive officers of AROSA, has effected any transaction in Common Stock during the past 60 days.

(d)     Except as set forth in this Item 5, no person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock that may be deemed to be beneficially owned by the Reporting Persons.

(e) Not applicable.

Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to Securities of the Issuer.

The information set forth in Item 4 hereof is hereby incorporated by reference into this Item 6, as applicable. The description of the terms of the investment by the Reporting Persons is qualified by reference to the agreements filed as Exhibits 1 through 13 to this Schedule 13D.

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Item 7. Material to Be Filed as Exhibits

The following documents are filed as exhibits to this Schedule 13D:

Exhibit Number	Description
1	PGI Merger Agreement.
2	Cosmos Merger Agreement.
3	Marathon Contribution Agreement.
4	Marathon Merger Agreement (incorporated by reference to Exhibit 10.5 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
5	Arcade Contribution Agreement.
6	Arcade Merger Agreement (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
7	Arcade 2 Contribution Agreement.
8	Arcade 2 Merger Agreement (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
9	Share Purchase Agreement.
10	Registration Rights Agreement.
11	Form of Lock-up Agreement (for continuing investors).
12	Form of Lock-up Agreement (for directors and management).
13	Stockholders Agreement.
14	Agreement regarding filing of joint Schedule 13D (filed herewith).
15.1	Power of Attorney of Katharina Otto-Bernstein (incorporated by reference to Exhibit 24 to the Form 3 filed by Katharina Otto-Bernstein with the Commission on November 26, 2014).
15.2	Power of Attorney of Alexander Otto (incorporated by reference to Exhibit 24 to the Form 3 filed by Alexander Otto with the Commission on November 18, 2014).
15.3	Power of Attorney of Maren Otto (incorporated by reference to Exhibit 24 to the Form 3 filed by Maren Otto with the Commission on November 26, 2014).

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SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 4, 2014	ALEXANDER OTTO
	By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Alexander Otto
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
Dated: December 4, 2014	AROSA Vermoegensverwaltungsgesellschaft m.b.H.
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
	By:	/s/ Thomas Finne
		Thomas Finne
		Managing Director
Dated: December 4, 2014	KATHARINA OTTO-BERNSTEIN
	By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Katharina Otto-Bernstein
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
Dated: December 4, 2014	MAREN OTTO By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Maren Otto
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director

EXHIBIT INDEX

Exhibit Number	Description
1	PGI Merger Agreement.
2	Cosmos Merger Agreement.
3	Marathon Contribution Agreement.
4	Marathon Merger Agreement (incorporated by reference to Exhibit 10.5 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
5	Arcade Contribution Agreement.
6	Arcade Merger Agreement (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
7	Arcade 2 Contribution Agreement.
8	Arcade 2 Merger Agreement (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by the Issuer with the Commission on November 24, 2014).
9	Share Purchase Agreement.
10	Registration Rights Agreement.
11	Form of Lock-up Agreement (for continuing investors).
12	Form of Lock-up Agreement (for directors and management).
13	Stockholders Agreement.
14	Agreement regarding filing of joint Schedule 13D (filed herewith).
15.1	Power of Attorney of Katharina Otto-Bernstein (incorporated by reference to Exhibit 24 to the Form 3 filed by Katharina Otto-Bernstein with the Commission on November 26, 2014).
15.2	Power of Attorney of Alexander Otto (incorporated by reference to Exhibit 24 to the Form 3 filed by Alexander Otto with the Commission on November 18, 2014).
15.3	Power of Attorney of Maren Otto (incorporated by reference to Exhibit 24 to the Form 3 filed by Maren Otto with the Commission on November 26, 2014).

EX-99.1

Exhibit 1

AGREEMENT and plan of merger

by and among

PARAMOUNT GROUP, INC.,
a Delaware corporation,

PARAMOUNT GROUP, INC.,
a Maryland corporation,

and

THE STOCKHOLDERS

Dated as of November 6, 2014

Table OF CONTENTS

		Page
Article I THE MERGER		2
Section 1.01	The Merger	2
Section 1.02	Merger Closing	2
Section 1.03	Effective Time	2
Section 1.04	Effect of the Merger	3
Section 1.05	Organizational Documents	3
Section 1.06	Directors and Officers of the Surviving Entity	3
Section 1.07	Conversion of Equity Interests	3
Section 1.08	Tax Treatment of Merger	3
Section 1.09	Payment of Merger Consideration	4
Article II CLOSING; TERM OF AGREEMENT		4
Section 2.01	Conditions Precedent	4
Section 2.02	Closing Deliveries	7
Section 2.03	Term of the Agreement	7
Section 2.04	Effect of Termination	7
Section 2.05	Tax Withholding	7
Section 2.06	Transaction Costs	7
Section 2.07	Further Action	8
Article III REPRESENTATIONS AND WARRANTIES  OF THE COMPANY		8
Section 3.01	Organization; Authority	8
Section 3.02	Due Authorization	8
Section 3.03	Consents and Approvals	8
Section 3.04	Tax Matters	9
Section 3.05	No Violation	9
Section 3.06	Validity of Company Shares	9
Section 3.07	Litigation	9
Section 3.08	Broker	9
Section 3.09	No Other Representations or Warranties	9
Article IV REPRESENTATIONS AND WARRANTIES OF PGI		10
Section 4.01	Organization; Authority	10
Section 4.02	Capitalization	11
Section 4.03	Due Authorization	11
Section 4.04	Consents and Approvals	11
Section 4.05	Tax Matters	11
Section 4.06	No Violation	12
Section 4.07	Solvency	13
Section 4.08	Litigation	13
Section 4.09	Licenses and Permits	13
Section 4.10	The Properties	13
Section 4.11	Insurance	15

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Section 4.12	Environmental Matters	15
Section 4.13	Holding Period	15
Section 4.14	Investments	15
Section 4.15	Broker	16
Section 4.16	Eminent Domain	16
Section 4.17	Assets and Liabilities	16
Section 4.18	No Other Representations or Warranties	17
Article V INDEMNIFICATION		17
Section 5.01	Company Indemnification	17
Section 5.02	PGI Indemnification	18
Section 5.03	Notice of Claims	19
Section 5.04	Third Party Claims	19
Section 5.05	Survival of Representations and Warranties	19
Section 5.06	Establishment of Indemnity Holdback Escrow	20
Section 5.07	Exclusive Remedy	20
Section 5.08	Tax Treatment	20
Article VI COVENANTS; ADDITIONAL AGREEMENTS		20
Section 6.01	Certain Covenants of PGI	20
Section 6.02	Stockholders’ Representative	21
Section 6.03	Tax Covenants	21
Section 6.04	Tax Protection Provisions	22
Section 6.05	Liability for Transfer Taxes	24
Section 6.06	Commercially Reasonable Efforts By the Company and PGI	24
Article VII GENERAL PROVISIONS		24
Section 7.01	Notices	24
Section 7.02	Definitions	25
Section 7.03	Counterparts	27
Section 7.04	Entire Agreement; Third-Party Beneficiaries	28
Section 7.05	Governing Law	28
Section 7.06	Assignment	28
Section 7.07	Jurisdiction	28
Section 7.08	Dispute Resolution	28
Section 7.09	Severability	29
Section 7.10	Rules of Construction	30
Section 7.11	Equitable Remedies	30
Section 7.12	Time of the Essence	30
Section 7.13	Descriptive Headings	30
Section 7.14	No Personal Liability Conferred	31
Section 7.15	Amendments	31

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EXHIBITS
Exhibit A	Properties
Exhibit B	Escrow Agreement
Exhibit C	Lock-up Agreement
Exhibit D	Form of Letter of Transmittal
Exhibit E	Fund Contribution Agreements
Exhibit F	Fund GP Entities
SCHEDULES
Schedule 1.07	Merger Consideration

iii

DEFINED TERMS

Term	Section
Accredited Investor	Section 7.02
Affiliate	Section 7.02
Agreement	Introduction
Business Day	Section 7.02
Certificate of Merger	Section 1.03
Claim	Section 5.03
Claim Notice	Section 5.03
Closing Documents	Section 2.02
Code	Section 7.02
Company	Introduction
Company Cap	Section 5.07
Company Common Stock	Recitals
Company Deductible	Section 5.01
Company Indemnified Party	Section 5.02
Company Material Adverse Effect	Section 7.02
Company Shares	Recitals
Company’s Knowledge	Section 7.02
Covenant Period	Section 6.04
Disclosure Letter	Article IV
Dispute	Section 7.08
Effective Time	Section 1.03
Environmental Laws	Section 7.02
Equity Interest	Section 1.07
Escrow Agreement	Recitals
Expiration Date	Section 5.05
FIRPTA Notice	Section 2.01
Formation Transactions	Recitals
Fund Contribution Agreements	Section 7.02
Fund GP Entities	Section 7.02
Governmental Authority	Section 7.02
Incremental Transfer Taxes	Section 7.02
Indemnified Party	Section 5.03
Indemnifying Party	Section 5.03
Indemnity Holdback Amount	Recitals
Indemnity Holdback Escrow	Recitals
IPO	Recitals
IPO Closing	Section 1.02
JV Entities	Section 4.01
Laws	Section 7.02
Leases	Section 4.10
Liens	Section 7.02
Lock-up Agreement	Recitals
Losses	Section 5.01

iv

Term	Section
Merger	Recitals
Merger Closing	Section 1.02
Merger Closing Date	Section 1.02
Merger Consideration	Section 1.07
MRI	Section 7.02
New York Transfer Taxes	Section 6.03
No Gain Covenant	Section 6.04
No-Tax Position	Section 6.04
OP Units	Section 7.02
Operating Partnership	Recitals
Organizational Documents	Section 7.02
Outside Date	Section 2.03
Paramount Funds	Section 7.02
Permitted Activities	Section 4.17
Permitted Distributions	Section 4.17
Permitted Liens	Section 7.02
Person	Section 7.02
PGI	Introduction
PGI Deductible	Section 5.02
PGI Indemnified Party	Section 5.01
PGI Material Adverse Effect	Section 7.02
PGI-MRI Merger	Section 4.17
PGI Subsidiary	Section 4.01
PGI’s Knowledge	Section 7.02
Price to the Public	Section 7.02
Prohibited Event	Section 6.04
Properties	Recitals
Property	Recitals
Property Interests	Recitals
Registration Rights Agreement	Recitals
Registration Statement	Recitals
REIT	Recitals
SEC	Recitals
Securities Act	Section 7.02
Stockholder	Recitals
Stockholders	Recitals
Stockholders Agreement	Recitals
Stockholders’ Representative	Section 6.02
Subsidiary	Section 7.02
Surviving Entity	Section 1.01
Tax	Section 7.02
Taxes	Section 7.02
Tax Return	Section 7.02
Third Party Claims	Section 5.04

v

Term	Section
Transfer Tax Amount	Section 7.02

vi

AGREEMENT and plan of merger

THIS AGREEMENT AND PLAN OF MERGER (including all exhibits and schedules, this “Agreement”) is made and entered into as of November 6, 2014, by and among PARAMOUNT GROUP, INC., a Delaware corporation (“PGI”), PARAMOUNT GROUP, INC., a Maryland corporation (the “Company”), and the stockholders whose names appear on the signature pages hereto (each, a “Stockholder” and together, the “Stockholders”). Capitalized terms used and not defined in the body of this Agreement shall have the meanings set forth in Section 7.02 hereto.

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of the common stock, par value $0.01 per share (“Company Common Stock”), of the Company, which will operate as a self-administered and self-managed real estate investment trust (“REIT”) within the meaning of Sections 856 through 860 of the Code;

WHEREAS, in connection with the IPO, the Company, which is the sole general partner of Paramount Group Operating Partnership LP (the “Operating Partnership”), desires to engage in a series of transactions through which the Company and the Operating Partnership will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (collectively, the “Formation Transactions”), which transactions are more specifically set forth in the Company’s Registration Statement on Form S-11 (the “Registration Statement”) filed with the Securities and Exchange Commission (“SEC”), as amended from time to time;

WHEREAS, PGI owns, directly or indirectly, interests (the “Property Interests”) in the properties set forth on Exhibit A hereto, under the heading “PGI” (each, a “Property” and together the “Properties”);

WHEREAS, as part of the Formation Transactions, PGI will merge with and into the Company, with the Company as the surviving entity (the “Merger”) and in consideration thereof each Stockholder will receive shares of Company Common Stock (“Company Shares”);

WHEREAS, the board of directors of the Company and the stockholder of the Company have approved and authorized the Merger in accordance with applicable Laws and the Company’s Organizational Documents;

WHEREAS, the board of directors of PGI and the Stockholders have approved and authorized the Merger in accordance with applicable Laws and PGI’s Organizational Documents;

WHEREAS, at the Merger Closing, the Company will deposit the number of Company Shares set forth as the Indemnity Holdback Amount opposite each Stockholder’s name on Schedule 1.07 under the heading “PGI,” which represents approximately the number of Company Shares issued in the Merger equal to $19,000,000 divided by the Price to the Public (collectively, the “Indemnity Holdback Amount”) into an Indemnity Holdback Escrow (as defined in the Escrow Agreement) pursuant to the Escrow Agreement in the form of Exhibit B attached hereto (the “Escrow Agreement”), in order to provide a remedy for a Company Indemnified Party as provided in Section 5.02;

WHEREAS, concurrently with the execution of this Agreement, the Company has entered into a registration rights agreement with the Stockholders (the “Registration Rights Agreement”);

WHEREAS, concurrently with the execution of this Agreement, the Company has entered into a stockholders agreement with the Stockholders (the “Stockholders Agreement”);

WHEREAS, concurrently with the execution of this Agreement, each Stockholder has executed and delivered a lock-up agreement to the underwriters of the IPO, a copy of which is attached as Exhibit C hereto (the “Lock-up Agreement”); and

WHEREAS, it is intended that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the receipt and sufficiency of which is hereby acknowledged and agreed, the parties hereto, intending to be legally bound hereby, agree as follows:

Article I

THE MERGER

Section 1.01         The Merger. At the Effective Time, subject to and upon the terms and conditions of this Agreement and in accordance with applicable Laws, PGI shall be merged with and into the Company, whereby the separate existence of PGI shall cease, and the Company shall continue its existence under Maryland General Corporation Law as the surviving entity in the Merger (sometimes referred to as the “Surviving Entity”).

Section 1.02         Merger Closing. Unless this Agreement shall have been terminated pursuant to Section 2.03, and subject to satisfaction or waiver of the conditions in Section 2.01, the closing of the Merger and the other transactions contemplated hereby (the “Merger Closing” or the “Merger Closing Date”) shall occur concurrently with the closing of the IPO (the “IPO Closing”), or up to one (1) day prior to, but conditioned upon the subsequent occurrence of, the IPO Closing.  The Merger Closing shall take place at the offices of Goodwin Procter llp, 620 Eighth Avenue, New York, NY 10018, or as mutually agreed between the Company and PGI. In connection with the foregoing, the parties hereto hereby agree that the specific order in which the Merger Closing, the IPO Closing and the closing of the other transactions that are part of or related to the Formation Transactions occur shall be as determined by the Company.

Section 1.03         Effective Time. On the Merger Closing Date (or on such other date as the Company and PGI may agree) the Company and PGI shall file, or shall cause to be filed, a certificate of merger or similar document with respect to the Merger (the “Certificate of Merger”) as may be required by applicable Laws with the Secretary of State of each applicable jurisdiction, providing that the Merger shall become effective upon filing or, if agreed upon by the Company and PGI, as of such other date or time as is set forth in the Certificate of Merger (the “Effective Time”), together with any certificates and other filings or recordings related thereto, in such forms as are required by, and executed in accordance with, the relevant provisions of applicable Laws.

2

Section 1.04         Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger and applicable Laws.

Section 1.05         Organizational Documents. At the Effective Time, the Organizational Documents of the Company, as in effect immediately prior to the Effective Time, shall be the Organizational Documents of the Surviving Entity until thereafter amended as provided therein or in accordance with applicable Laws.

Section 1.06         Directors and Officers of the Surviving Entity. The directors and officers of the Company immediately prior to the Effective Time shall be and become the directors and officers of the Surviving Entity as of the Effective Time, each to hold office in accordance with the Organizational Documents of the Surviving Entity.

Section 1.07         Conversion of Equity Interests.

(a)          Under and subject to the terms and conditions of this Agreement, each Stockholder is entitled to receive as a result of and upon consummation of the Merger, the Merger Consideration set forth under the heading “PGI” in Schedule 1.07.

(b)          At the Effective Time, by virtue of the Merger and without any action on the part of the Company, PGI or any Stockholder, each outstanding share of common stock, par value $1.00, in PGI (each an “Equity Interest”) shall be converted automatically into the right of each Stockholder to receive Company Shares, in the amount set forth opposite his or her name under the heading “PGI” in Schedule 1.07 (the “Merger Consideration”).

(c)          No fractional Company Shares shall be issued to a Stockholder pursuant to this Agreement. If aggregating all Company Shares that a Stockholder otherwise would be entitled to receive pursuant to this Agreement would require the issuance of a fractional Company Share, such Stockholder shall instead be entitled to receive one full Company Share in lieu of such fractional Company Share.

(d)          From and after the Effective Time, each Equity Interest converted into the right to receive the Merger Consideration pursuant to Section 1.07(b) shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of such Equity Interest so converted shall thereafter cease to have any rights as a stockholder, except the right to receive the Merger Consideration applicable thereto.

Section 1.08         Tax Treatment of Merger. It is intended that, for U.S. federal income tax purposes, the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement constitutes, and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3.

3

Section 1.09         Payment of Merger Consideration.

(a)          After the Effective Time, upon surrender by a Stockholder of its Equity Interests together with a duly executed letter of transmittal in the form attached hereto as Exhibit D and the certificates, if any, evidencing such Equity Interests to the Company, such Stockholder shall be entitled to receive from the Company in exchange therefor the portion of the Merger Consideration to which such Stockholder is entitled (less such Stockholder’s respective portion of the Indemnity Holdback Amount). Risk of loss and title to the Equity Interests of a Stockholder shall pass only upon delivery to the Company of such duly executed letter of transmittal and the certificates, if any, evidencing such Equity Interests.

(b)          Notwithstanding any other provisions of this Agreement, dividends or other distributions payable on any portion of the Merger Consideration after the Effective Time, but prior to the delivery of such portion of the Merger Consideration to a Stockholder pursuant to Section 1.09(a) above, shall be paid promptly by the Company to the Stockholder of record, as set forth in Schedule 1.07(b), entitled to receive such portion of the Merger Consideration upon compliance with the procedures set forth in this Section, less the amount of any withholding taxes which may be required thereon as reasonably determined by the Company. At and after the Effective Time, there shall be no transfers on the applicable record books of the Equity Interests that are outstanding immediately prior to the Effective Time.

(c)          On the Merger Closing Date, the Company will deposit the Indemnity Holdback Amount with the Escrow Agent (as defined in the Escrow Agreement) in accordance with the terms and conditions of the Escrow Agreement. The approval of the Merger and this Agreement by the Stockholders shall constitute approval of the Escrow Agreement and of all of the arrangements relating thereto, including without limitation the placement of the Indemnity Holdback Amount in escrow and the appointment of the Stockholders’ Representative.

Article II

CLOSING; TERM OF AGREEMENT

Section 2.01         Conditions Precedent.

(a)          Condition to Each Party’s Obligations. The respective obligation of each party to effect the transactions contemplated by this Agreement to occur on the Merger Closing Date is subject to the satisfaction or waiver on or prior to the Merger Closing of the following conditions:

(i)          Consents. The requisite consent of the Stockholders approving the Merger shall have been obtained. This condition may not be waived by any party.

(ii)         Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the SEC seeking a stop order. This condition may not be waived by any party.

4

(iii)        IPO Proceeds. The Company shall have received substantially currently with the Merger Closing hereunder the proceeds from the IPO. This condition may not be waived by any party.

(iv)        No Injunction. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.

(b)          Conditions to Obligations of the Company. The obligations of the Company to effect the transactions contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Merger Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Company in whole or in part):

(i)          Representations and Warranties of PGI. (i) The representations and warranties of PGI set forth in Section 4.17 shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time, (ii) each representation and warranty of PGI contained in this Agreement (other than in Section 4.17) that is qualified by materiality or PGI Material Adverse Effect shall be true and correct in all respects as of the date of this Agreement and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (iii) each representation and warranty of PGI contained in this Agreement (other than in Section 4.17) that is not qualified by materiality or PGI Material Adverse Effect shall be true and correct as of the date of this Agreement and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a PGI Material Adverse Effect.

(ii)         Performance by PGI. PGI shall have performed in all material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Merger Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for PGI to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of PGI to consummate the transactions contemplated by this Agreement) shall have been obtained.

5

(iv)        FIRPTA Notice. Each Stockholder shall have provided the Company with a properly executed FIRPTA notice substantially in the form set forth in (A)(x) Treasury Regulation Section 1.1445-2(d)(2) or (y) Treasury Regulation Section 1.1445-2(b)(2) (the “FIRPTA Notice”) sufficient to avoid any withholding under Section 1445 of the Code, as applicable or (B) provided cash (in such amount as determined by the Company in its reasonable discretion) to the Company sufficient to pay any applicable withholding under the Code.

(v)         Closing Documents. PGI shall have executed and delivered to the Company the documents to which it is a party which are required to be delivered pursuant to Section 2.02.

(c)          Conditions to Obligations of PGI. The obligation of PGI to effect the transactions contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Merger Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by PGI in whole or in part):

(i)          Representations and Warranties. (i) Each representation and warranty of the Company contained in this Agreement that is qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (ii) each representation and warranty of the Company contained in this Agreement that is not qualified by materiality or Company Material Adverse Effect shall be true and correct as of the date of this Agreement and as of the Effective Time as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Company Material Adverse Effect.

(ii)         Performance by the Company. The Company shall have performed in all material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Merger Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Company to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement) shall have been obtained.

(iv)        Offering Price. PGI shall have approved the Price to the Public.

(v)         Closing Documents. The Company shall have executed, acknowledged and delivered to PGI the documents required to be delivered pursuant to Section 2.02.

6

Section 2.02         Closing Deliveries. On the Merger Closing Date, each of the parties shall make, execute, acknowledge and deliver the legal documents and other items to which it is a party or for which it is otherwise responsible that are necessary to carry out the intention of this Agreement and the other transactions contemplated to take place in connection therewith (collectively, the “Closing Documents”). The Closing Documents and other items to be delivered include the delivery by the Company to the Escrow Agent (as defined in the Escrow Agreement) evidence of the issuance of the Company Shares that constitutes the Indemnity Holdback Amount to the Escrow Agent pursuant to this Agreement.

Section 2.03         Term of the Agreement. This Agreement shall terminate automatically if the Merger Closing or the IPO Closing shall not have been consummated on or prior to March 31, 2015 (such date is hereinafter referred to as the “Outside Date”). In addition, this Agreement may be terminated before the Merger Closing by a document signed by the Company and PGI.

Section 2.04         Effect of Termination. In the event of termination of this Agreement for any reason, all obligations on the part of the Company and PGI under this Agreement shall terminate, except that the obligations set forth in Article VII shall survive, provided, that nothing in this Agreement shall relieve any party hereto from liability for any breach of this Agreement or any failure to perform its obligations under this Agreement.

Section 2.05         Tax Withholding. The Company shall be entitled to deduct and withhold, or cause to be deducted and withheld, from the Merger Consideration payable (or deemed payable) pursuant to this Agreement, including the Indemnity Holdback Amount, to the Stockholders, such amounts as the Company is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. Tax law (as determined by the Company in its reasonable discretion). To the extent that amounts are so deducted and withheld by the Company, such amounts shall be treated for all purposes of this Agreement as having been paid to the applicable Stockholder. Each Stockholder shall (A) to the extent requested by PGI, contribute cash prior to the Merger equal to (i) any withholding Taxes that would otherwise be required to be withheld by the Company in connection with the Merger (taking into account any gross-up attributable to such amounts) and (ii) any withholding Taxes that PGI failed to withhold with respect to distributions to the Stockholders prior to the Closing and (B) indemnify and hold harmless the Company for any withholding Taxes relating to the Company’s failure to withhold from such Stockholder’s portion of the Merger Consideration as required by applicable Laws, and for any Taxes of such Stockholder (including those described in subclause (A)(ii) above), other than Taxes attributable to the Company’s breach of its covenants in Section 6.04, provided, however, that, in either case, such Stockholder shall not be liable for any penalties that may become payable in respect thereof, and provided further that, for the avoidance of doubt, the indemnification obligation of the Stockholders pursuant to this clause (B) shall neither be limited to the Indemnity Holdback Amount nor subject to the PGI Deductible.

Section 2.06         Transaction Costs. Subject to Section 6.03, if the Merger Closing occurs, the Company shall be solely responsible for all transaction costs and expenses of the Company and the Stockholder that have not previously been paid in connection with this Agreement, which include, but are not limited to, lender consent fees, legal, accounting and consultant fees.

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Section 2.07         Further Action. If, at any time after the Effective Time, the Surviving Entity shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of PGI acquired or to be acquired by the Surviving Entity as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, the Surviving Entity shall be authorized to execute and deliver, in the name and on behalf of PGI, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of PGI, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Entity or otherwise to carry out this Agreement.

Article III

REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company hereby represents and warrants to PGI as set forth below which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of that earlier date):

Section 3.01         Organization; Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Maryland. The Company has all requisite power and authority to enter into this Agreement and all agreements contemplated hereby to which it is party and to carry out the transactions contemplated hereby and thereby, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.02         Due Authorization. The execution, delivery and performance of this Agreement by the Company have been duly and validly authorized by all necessary action of the Company. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of the Company pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 3.03         Consents and Approvals. Except in connection with the IPO and the consummation of the Formation Transactions or as shall have been obtained on or prior to the Merger Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Company in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Company Material Adverse Effect.

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Section 3.04         Tax Matters. At the effective time of the IPO and at the Merger Closing, the Company shall be organized in a manner so as to qualify for taxation as a REIT pursuant to Sections 856 through 860 of the Code. The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31 of the year in which the Merger Closing takes place.

Section 3.05         No Violation. None of the execution, delivery or performance of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any material right of termination, acceleration, cancellation or other material right under, (a) the Organizational Documents of the Company, (b) any agreement, document or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Company or any its Subsidiaries (or its assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.06         Validity of Company Shares. The Company Shares, when issued and delivered pursuant to the terms of this Agreement will be duly authorized by the Company and will be validly issued by the Company, free and clear of all Liens created by the Company (other than Liens created by the charter of the Company, the Escrow Agreement, the Lock-up Agreement or this Agreement).

Section 3.07         Litigation. There is no action, suit or proceeding pending or, to the Company’s Knowledge, threatened against the Company, the Operating Partnership or any of their Subsidiaries which is reasonably expected to have a Company Material Adverse Effect or which challenges or impairs the ability of the Company to execute or deliver, or perform its obligations under, this Agreement and the documents executed by it pursuant to this Agreement or to consummate the transactions contemplated hereby or thereby.

Section 3.08         Broker. None of the Company nor any of its Subsidiaries nor any of their managers, members, partners, officers, directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of PGI or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Agreement.

Section 3.09         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article III, the Company shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby.

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Article IV

REPRESENTATIONS AND WARRANTIES OF PGI

Except as disclosed in the disclosure letter delivered to the Company by PGI on the date hereof (the “Disclosure Letter”), PGI hereby represents and warrants to the Company as set forth below, and each Stockholder hereby represents and warrants to the Company as set forth in Section 4.14 below, which representations are true and correct as of the date hereof (or such other date specifically set forth below and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 4.01         Organization; Authority.

(a)          PGI is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. PGI has all requisite power and authority to enter into this Agreement and all agreements contemplated hereby to which it is party and to carry out the transactions contemplated hereby and thereby, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a PGI Material Adverse Effect.

(b)          Section 4.01(b) of the Disclosure Letter, sets forth as of the date hereof, with respect to PGI, (i) the name and the jurisdiction of organization or incorporation, as the case may be, of each Subsidiary of PGI (each a “PGI Subsidiary”) and (ii) the ownership interest of PGI or another PGI Subsidiary in each such PGI Subsidiary. Each PGI Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a PGI Material Adverse Effect.

(c)          PGI or the PGI Subsidiaries own the equity interests in the Persons set forth on Section 4.01(c) of the Disclosure Letter (together with the Subsidiaries of such Persons, the “JV Entities”) in the stated percentage set forth on Section 4.01(c) of the Disclosure Letter.

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Section 4.02         Capitalization. Section 4.02 of the Disclosure Letter sets forth, as of the date hereof, a true, correct and complete description of the capitalization of PGI as set forth in the books and records of PGI. All of the issued and outstanding equity interests of PGI are validly issued and are not subject to appraisal, dissenters or similar rights. There are no outstanding rights to purchase subscriptions, warrants, options or any other security convertible into or exchangeable for equity interests in PGI. Except as provided for or contemplated by this Agreement or any other agreements referenced herein, there are no, and, as of the Merger Closing, there will not be any rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements, instruments or understandings of any kind outstanding entitling any Person to acquire any equity interests in the PGI Subsidiaries or JV Entities (other than the Paramount Funds or their Subsidiaries), except pursuant to Permitted Liens or rights established pursuant to the terms of the Organizational Documents and related agreements with respect to the PGI Subsidiaries and JV Entities that have been previously disclosed to the Company. There are no outstanding rights to purchase subscriptions, warrants, options or any other security convertible or exchangeable for equity interests in the Fund GP Entities except for those subject to those certain Contribution Agreements set forth in Section 4.02 of the Disclosure Letter entered into by members of management of such Fund GP Entity concurrently with the execution of this Agreement.

Section 4.03         Due Authorization. The execution, delivery and performance of this Agreement by PGI have been duly and validly authorized by all necessary action required of PGI. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of PGI pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of PGI, enforceable against PGI, in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding in law or in equity).

Section 4.04         Consents and Approvals. Except as shall have been satisfied on or prior to the Merger Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by PGI or any PGI Subsidiary or JV Entity in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a PGI Material Adverse Effect.

Section 4.05         Tax Matters.

(a)          PGI and each PGI Subsidiary and JV Entity has timely filed, or will timely file, all Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) in accordance with all applicable Laws. All such Tax Returns are correct and complete in all material respects, and PGI and each PGI Subsidiary and JV Entity has paid (or had paid on its behalf) all Taxes required to be paid by it (whether or not shown on such Tax Returns), and no deficiencies for any Taxes have been proposed, asserted or assessed in writing against PGI, or any PGI Subsidiary or JV Entity, and no requests for waivers of the time to assess any such Taxes are pending and no such waivers have been granted.

(b)          There are no Liens as a result of any unpaid Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or property of PGI, any PGI Subsidiary or any JV Entity.

(c)          Except as would not reasonably be expected to have a PGI Material Adverse Effect, there are no pending or, to PGI’s Knowledge, threatened audits, assessments or other actions for or relating to a liability in respect of income or non-income Taxes of PGI, any PGI Subsidiary or any JV Entity.

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(d)          PGI has entered into this Agreement for good and valid business reasons.

(e)          The Stockholders have no plan or intention to sell, exchange or transfer Equity Interests for consideration other than Company Common Stock, in contemplation of the Merger, to the Company (or any party related to the Company) or sell, exchange or transfer any Company Common Stock received in the Merger to the Company (or any party related to the Company).

(f)          PGI has not agreed to assume, nor will assume, directly or indirectly, any expense or other liability, whether fixed or contingent, of the Stockholders in connection with or as part of the Merger or any related transaction.

(g)         No part of the Merger Consideration will be received by a Stockholder as a creditor, employee or in any capacity other than as a stockholder of PGI.

(h)         PGI is a “United States real property holding corporation” for U.S. federal income tax purposes.

(i)          PGI holds cash or cash equivalents (excluding any cash or cash equivalents taken into account in the net amount of tangible assets and liabilities set forth in Section 4.17 of the Disclosure Letter) in an amount that is at least equal to the unpaid Taxes owed by it for all taxable periods ending on or prior to the Merger Closing Date.

(j)          None of PGI or any PGI Subsidiary is or ever has been a party to or bound by, or could have any liability under, any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement (other than commercial agreements entered into in the ordinary course of business, the principal purpose of which is not related to Taxes).

(k)         None of PGI or any PGI Subsidiary has any liability for Taxes of any person arising from the application of Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or foreign law (other than in respect of being a member of a consolidated group the common parent of which is PGI), or as a transferee or successor.

Section 4.06         No Violation. None of the execution, delivery or performance of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under, (a) the Organizational Documents of PGI or any PGI Subsidiary or any JV Entity, (b) any agreement, document or instrument to which PGI, any PGI Subsidiary or any JV Entity is a party or by which PGI, any PGI Subsidiary or any JV Entity is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on PGI, any PGI Subsidiary or any JV Entity (or their assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a PGI Material Adverse Effect. None of the execution, delivery or performance of any Fund Contribution Agreement, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under the Organizational Documents of any Paramount Fund, including, without limitation, any side letter entered into by a Paramount Fund with its investors.

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Section 4.07         Solvency. PGI has been and will be solvent at all times prior to the Merger. No bankruptcy or similar insolvency proceeding has been filed or is currently contemplated by PGI, any PGI Subsidiary or any JV Entity.

Section 4.08         Litigation. As of the date hereof, there is no action, suit or proceeding pending or, to PGI’s Knowledge, threatened against PGI, any PGI Subsidiary or any JV Entity which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a PGI Material Adverse Effect. As of the date hereof, there is no action, suit or proceeding pending or, to PGI’s Knowledge, threatened against PGI, any PGI Subsidiary or any JV Entity which challenges or impairs the ability of PGI to execute or deliver, or perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 4.09         Licenses and Permits To PGI’s Knowledge, all notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management, leasing and operation of the Properties have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and (to the extent required in connection with the transactions contemplated by this Agreement) are assignable to the Company, except in each case for items that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect. To PGI’s Knowledge, neither PGI, any PGI Subsidiary, any JV Entity nor any third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect, nor has any of them received within the past one year any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of them, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority and that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect.

Section 4.10         The Properties.

(a)          The Properties are owned directly, in fee simple, by the Persons set forth on Section 4.10 of the Disclosure Letter or their direct or indirect wholly owned subsidiaries. Each PGI Subsidiary or JV Entity listed as owning a Property on Section 4.10 of the Disclosure Letter is insured under a policy of title insurance as the owner of the fee simple estate (or, in the case of certain Properties, the leasehold estate) of such Property, in each case free and clear of all Liens except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property. Prior to the effective time of the transactions contemplated in this Agreement, no PGI Subsidiary or JV Entity shall take or omit to take any action to cause any Lien to attach to any Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property.

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(b)          Except for matters that would not, individually or in the aggregate, have a PGI Material Adverse Effect, (i) no PGI Subsidiary, JV Entity, nor any other party to any agreement affecting any Property to which PGI, a PGI Subsidiary or JV Entity is a party (other than a Lease (as such term is hereinafter defined) for space within such Property), has given or received any notice of default with respect to any term or condition of any such agreement, including, without limitation, any ground lease, (ii) no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of any PGI Subsidiary or JV Entity, except for Permitted Liens, and (iii) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space leases) are valid and binding and in full force and effect. No PGI Subsidiary or JV Entity has granted an option or right of first refusal or offer pursuant to the leases with respect to the sale of any Property.

(c)          As presently conducted, none of the operation of the buildings, fixtures and other improvements comprising a part of the Properties is in violation of any applicable building code, zoning ordinance or other law or regulation, except for such violations that would not, individually or in the aggregate, have a PGI Material Adverse Effect. Neither PGI nor any PGI Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened proceedings for the rezoning of any Property or portion thereof except for such notices or proceedings that would not, individually, or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect.

(d)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect, (i) to PGI’s Knowledge, neither PGI, any PGI Subsidiary nor any JV Entity, nor any other party to any Lease, has given or received any notice of default with respect to any term or condition of any such Lease, (ii) to PGI’s Knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of PGI, the PGI Subsidiaries or the JV Entities, except for Permitted Liens, and (iii) each of the leases (and all amendments thereto or modifications thereof) to which any PGI, any PGI Subsidiary or any JV Entity is a party or by which PGI, any PGI Subsidiary or any JV Entity or any Property is bound or subject (collectively, the “Leases”) is and will be valid and binding and in full force and effect.

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(e)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect, each of the Leases to which PGI, any PGI Subsidiary or any JV Entity is a party or by which PGI, any PGI Subsidiary, any JV Entity or any Property is bound or subject, is in full force and effect, and constitutes the legal, valid and binding obligation of PGI or the applicable PGI Subsidiary or JV Entity, and to PGI’s Knowledge, each other party thereto, enforceable against each PGI Subsidiary or JV Entity, and to PGI’s Knowledge, each other party thereto, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(f)          To PGI’s Knowledge, except as previously disclosed to the Company, no tenant under any such Lease is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings, except for matters that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect.

Section 4.11         Insurance. PGI or the applicable PGI Subsidiary or JV Entity has in place the public liability, casualty and other insurance coverage with respect to each Property as PGI reasonably deems necessary. Each of the insurance policies with respect to the Properties is in full force and effect in all material respects and none of PGI or the applicable PGI Subsidiary or JV Entity is in default (in any material respect) under any such policies.

Section 4.12         Environmental Matters. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a PGI Material Adverse Effect, (a) PGI, the PGI Subsidiaries and the JV Entities are in compliance with all applicable Environmental Laws, (b) neither PGI, any PGI Subsidiary nor any JV Entity has received within the past three years any written notice from any Governmental Authority or third party alleging that PGI, any PGI Subsidiary, any JV Entity or any Property is not in compliance with applicable Environmental Laws , and (c)  there has not been a release of a hazardous substance on any Property that would require investigation or remediation under applicable Environmental Laws. The representations and warranties contained in this Section 4.12 constitute the sole and exclusive representations and warranties made by PGI concerning environmental matters.

Section 4.13         Holding Period. PGI acknowledges that it has been advised, and it has advised the Stockholders, that the Company Shares issued pursuant to this Agreement are “restricted securities” (unless registered in accordance with applicable U.S. securities Laws) under applicable U.S. federal securities Laws and may be disposed of only pursuant to an effective registration statement or an exemption therefrom and PGI understands that, and has informed the Stockholders that, the Company has no obligation or intention to register any of the Company Shares, except pursuant to the Registration Rights Agreement. Accordingly, the Stockholders may have to bear indefinitely, the economic risks of an investment in such Company Shares and a notation shall be made in the appropriate records of the Company indicating that the Company Shares are subject to restrictions on transfer.

Section 4.14         Investments. Each Stockholder acknowledges that the Company intends the offer and issuance of Company Shares to the Stockholders as Merger Consideration to be exempt from registration under the Securities Act and applicable state securities laws and that the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties contained herein. In furtherance thereof, each Stockholder represents and warrants to the Company as follows:

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(a)          such Stockholder is an Accredited Investor; and

(b)          such Stockholder is acquiring the Merger Consideration solely for its own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof in violation of the securities Laws.

Section 4.15         Broker. None of PGI, any PGI Subsidiary, any JV Entity or any of their respective managers, members, partners, officers directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Company, the Operating Partnership or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Agreement.

Section 4.16         Eminent Domain. There is no existing or, to PGI’s Knowledge threatened, in writing condemnation, eminent domain or similar proceeding that would affect any of the Properties. Neither PGI nor any PGI Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened condemnation, eminent domain or similar proceeding that would affect any of the Properties.

Section 4.17         Assets and Liabilities.

(a)          On July 18, 2014, pursuant to a filing of a certificate of merger with the Secretary of State of the State of Delaware, MRI merged with and into PGI with PGI as the surviving corporation (the “PGI-MRI Merger”).

(b)          Section 4.17 of the Disclosure Letter accurately sets forth, in all material respects, as of June 30, 2014 and September 30, 2014, (a) all outstanding indebtedness of PGI and the PGI Subsidiaries (other than the Paramount Funds and their respective Subsidiaries), MRI and its Subsidiaries and each JV Entity, (b) all interest rate swap liabilities of such entities and (c) the net amount of all other tangible assets and liabilities of such entities (other than deferred tax liabilities, if any, and their interests in the Properties and the Paramount Funds and their respective Subsidiaries), which consists of cash, cash equivalents, accounts receivable and accounts payable and any other assets set forth on Section 4.17 of the Disclosure Letter.  Except for distributions set forth on Section 4.17 of the Disclosure Letter (“Permitted Distributions”) or as contemplated by this Agreement or as otherwise set forth on Section 4.17 of the Disclosure Letter (“Permitted Activities”), since September 30, 2014, PGI has not (i) made any distributions or (ii) entered into any transactions with an Affiliate other than on an arm’s-length basis.

(c)          Section 4.17 of the Disclosure Letter accurately sets forth all contributions made to PGI by its Stockholders since September 30, 2014.

(d)          PGI, together with PGI Subsidiaries that are wholly owned, directly or indirectly, by PGI, owns the interests in Paramount Group Real Estate Fund V (CIP), L.P. set forth on Section 4.17 of the Disclosure Letter in addition to the interests owned as a result of PGI’s ownership in the Fund GP Entities.

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Section 4.18         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article IV, PGI shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby or thereby.

Article V

INDEMNIFICATION

Section 5.01         Company Indemnification.

(a)          Subject to the indemnification limitations set forth in this Agreement, from and after the Merger Closing Date, the Company shall indemnify and hold harmless each Stockholder and their respective officers, employees, partners, members, agents, representatives and Affiliates (each of which is a “PGI Indemnified Party”) from and against any and all charges, complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “Losses”) in excess of the greater of (i) 4.5% of the Company Cap or (ii) $250,000, in each case in the aggregate (the “Company Deductible”), arising out of or relating to, asserted against, imposed upon or incurred by a PGI Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Company contained in this Agreement or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Company pursuant to this Agreement; provided, however, that the Company shall not have any obligation under this Section 5.01 to indemnify any PGI Indemnified Party against any Losses to the extent that such Losses arise by virtue of PGI’s breach of this Agreement, gross negligence, willful misconduct or fraud.

(b)          Any indemnification payment made by the Company to a Stockholder pursuant to this Agreement shall be made to such Stockholder in shares of Company Common Stock, the number of which shall equal the dollar value of the indemnification payment, divided by the price of a share of Company Common Stock as of the close of market on the date of such indemnification payment.

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Section 5.02         PGI Indemnification.

(a)          Subject to the indemnification limitations set forth in this Agreement, from and after the Merger Closing Date, the PGI Indemnity Holdback Amount shall be used to indemnify and hold harmless the Company, the Operating Partnership and each of their respective directors, officers, employees, agents, representatives and Affiliates (each of which is a “Company Indemnified Party”) from and against any and all Losses in excess of the greater of (i) 4.5% of the Indemnity Holdback Amount or (ii) $250,000, in each case in the aggregate (the “PGI Deductible”), arising out of or relating to, asserted against, imposed upon or incurred by such Company Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of PGI or in any schedule, exhibit, certificate or affidavit or any other document delivered by PGI pursuant to this Agreement; provided, however, that PGI shall not have any obligation under this Section 5.02 to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Company’s breach of this Agreement, gross negligence, willful misconduct or fraud; provided further, however, that, to the extent such Losses relate to breach of a representation, warranty or covenant of PGI regarding a Person or the assets and liabilities of a Person that the Company or the Operating Partnership has or acquires an interest in from a Person other than PGI, the indemnification pursuant to this Section 5.02(a) shall be limited to the portion of such Losses attributable to the interest acquired from PGI pursuant to this Agreement. Each Stockholder hereby grants to the Company a security interest in the Company Shares held as the Indemnity Holdback Amount to secure the obligations set forth in this Section 5.02. In addition, to the extent that any (i) OP Units that PGI (or the Surviving Entity or its successors in interests)  receives, or would otherwise be entitled to receive, in connection with the Formation Transactions with respect to the interests in Fund V CIP held directly or indirectly by PGI at the Effective Time or (ii) OP Units or shares of Company Common Stock that are held by the Fund GP Entities are paid to the Company or the Operating Partnership in order to satisfy indemnification obligations to which such OP Units or shares of Company Common Stock are subject in connection with the Company’s or Operating Partnership’s acquisition of the assets of the Paramount Funds in the Formation Transactions, the Company or the Operating Partnership will be entitled to receive a number of Company Shares from the Indemnity Holdback Amount equal to such number of OP Units or shares of Company Common Stock paid to the Company or the Operating Partnership in order to indemnify the Company or the Operating Partnership for the loss of such OP Units or shares of Company Common Stock.

(b)          Subject to the indemnification limitations set forth in this Agreement from and after the Merger Closing Date, in the event that a Company Indemnified Party incurs Losses (as defined in the applicable Fund Contribution Agreement) for which it is entitled to indemnification pursuant to the applicable Fund Contribution Agreement greater than the applicable Indemnity Holdback Amount set forth therein, then the Indemnity Holdback Amount shall be used to indemnify such Company Indemnified Party for such Losses. For the avoidance of doubt, the parties hereto acknowledge and agree that no indemnification obligation shall arise under this Section 5.02(b) unless and until the indemnification remedy set forth in the applicable Fund Contribution Agreement has been utilized to the fullest extent provided for therein and in no event shall this Section 5.02(b) be deemed to extend the survival of any representation and warranty of any Contributor set forth in any Fund Contribution Agreement. In addition, the parties agree and acknowledge, for the purposes of this Section 5.02(b) with regard to the determination of whether the deductible has been satisfied, only the deductible set forth in the applicable Fund Contribution Agreement shall apply when making such determination and not the Company Deductible set forth herein.

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Section 5.03         Notice of Claims  At the time when any PGI Indemnified Party or Company Indemnified Party, as applicable, (as applicable, an “Indemnified Party”) learns of any potential claim (a “Claim”) under this Article V that is asserted against the Indemnified Party that is subject to indemnification by the Company or in respect of PGI from the Indemnity Holdback Amount, as applicable, under this Article V (as applicable, the “Indemnifying Party”), such Indemnified Party will promptly give written notice (a “Claim Notice”) to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholders’ Representative); provided that failure to do so shall not prevent recovery under this Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by Law, the Indemnified Party shall deliver to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholders’ Representative), promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to a Third Party Claim (defined below), and failure to do so shall prevent recovery under this Agreement to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.

Section 5.04         Third Party Claims. The Indemnifying Party (through the Stockholders’ Representative in the event the Indemnified Party is a Company Indemnified Party) shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties (“Third Party Claims”), through counsel chosen by the Indemnifying Party (or in the case of the Company Indemnified Parties, by the Stockholders’ Representative), if it gives written notice of its intention to do so to the Indemnified Parties within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their expense provided, further, that if any such Third Party Claim relates to Taxes of PGI, any PGI Subsidiary or any JV Entity or seeks non-monetary damages or asserts damages in excess of the Indemnity Holdback Amount against a Company Indemnified Party, then, notwithstanding anything in this Agreement to the contrary, the Company (or a Subsidiary of the Company) shall have the right to control any such Third Party Claim. Without limiting the foregoing, in the event that the Indemnifying Party exercises the right to undertake any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party (unless prohibited by Law), at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the one hand, or the Indemnifying Party (or in the case of the Company Indemnified Parties, the Stockholders’ Representative), on the other hand, without the other’s consent (which shall not be unreasonably withheld or delayed) unless (a) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party and (b) each Indemnified Party that is party to such claim is released from all liability with respect to such claim, provided that the Stockholders’ Representative shall be deemed to have consented to any proposed compromise or settlement to which it has not objected to by written notice within 30 days after notice of such proposed compromise or settlement was provided by a Company Indemnified Party.

Section 5.05         Survival of Representations and Warranties. All representations and warranties of PGI in Article IV and the Company in Article III, respectively, contained in this Agreement shall survive after the Merger Closing until the first anniversary of the Merger Closing Date (the “Expiration Date”). If written notice of a Claim in accordance with the provisions of Section 5.03 has been given prior to the Expiration Date, then the relevant representation and warranty shall survive, but only with respect to such specific Claim, until such Claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

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Section 5.06         Establishment of Indemnity Holdback Escrow. On the Merger Closing Date, the Company will deposit the Indemnity Holdback Amount with the Escrow Agent in accordance with the terms and conditions of the Escrow Agreement. The Company agrees that the Company Shares that comprise the Indemnity Holdback Amount may be released, or collateral may be substituted for such Company Shares, in accordance with the terms of the Escrow Agreement.

Section 5.07         Exclusive Remedy.

(a)          Except as set forth in Sections 2.05, 6.03(f) and 6.05, (i) the sole and exclusive remedy for Company Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with this Agreement and any of the agreements, documents or instruments executed and delivered in connection herewith and any of the transactions contemplated hereby shall be indemnification pursuant to the provisions of this Article V and (ii) neither PGI nor any Stockholder shall be liable or obligated to make payments under this Agreement to the extent such payments in the aggregate exceed the Indemnity Holdback Amount. For the avoidance of doubt, the parties agree and acknowledge that the foregoing shall not be deemed to modify the indemnification remedy set forth in each Fund Contribution Agreement.

(b)          Except as set forth in Section 6.04, (i) the sole and exclusive remedy for PGI Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with this Agreement and any of the agreements, documents or instruments executed and delivered in connection herewith and any of the transactions contemplated hereby shall be indemnification pursuant to the provisions of this Article V and (ii) the Company shall not be liable or obligated to make payments under this Agreement to the extent such payments in the aggregate exceed the dollar amount obtained by multiplying the number of Company Shares included in the Indemnity Holdback Amount by the Price to the Public (the “Company Cap”).

Section 5.08         Tax Treatment. All indemnity payments made under this Agreement shall be treated as adjustments to the consideration paid hereunder for U.S. federal income tax purposes, unless otherwise required by applicable Laws.

Article VI

COVENANTS; ADDITIONAL AGREEMENTS

Section 6.01         Certain Covenants of PGI. From the date hereof through the Merger Closing, except as otherwise provided for, or as contemplated by this Agreement or the Formation Transaction Documentation, PGI shall and shall cause the PGI Subsidiaries and JV Entities, to the extent PGI or the PGI Subsidiaries control such JV Entities, to use commercially reasonable efforts to conduct their business and operate and maintain the Properties in the ordinary course, consistent with past practices. In addition, PGI:

(a)          will not make any distributions, other than Permitted Distributions;

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(b)          except for Permitted Activities, will not enter into any transactions with an Affiliate other than on an arm’s-length basis;

(c)          will not sell, transfer or otherwise dispose of its Property Interests; and

(d)          will not mortgage, pledge, hypothecate, encumber (or permit to become encumbered) all or any portion of its Property Interests, except for Permitted Liens.

Section 6.02         Stockholders’ Representative. PGI and the Stockholders hereby appoint Dr. Thomas Finne as the representative for the Stockholders (the “Stockholders’ Representative”) and the Stockholders’ Representative shall have the authority to take the actions provided herein and receive notices on behalf of the Stockholders subsequent to the Merger Closing; provided that the Stockholders entitled to receive a majority of the Merger Consideration shall have the right, at any time, to remove and replace the Stockholders’ Representative by written notice to the Company executed by such Stockholders and delivered to the Company.

Section 6.03         Tax Covenants.

(a)          Each party hereto (i) shall cause all Tax Returns relating to the Merger to be filed on the basis of treating the Merger as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) shall not take any position on any Tax Return, or take any other reporting position, that is inconsistent with such treatment, unless otherwise required by applicable Laws.

(b)          PGI shall provide the Company with such reasonable cooperation and information relating to PGI, any PGI Subsidiary and any JV Entity as the Company reasonably requires in (i) filing any Tax Return, amended Tax Return or claim for Tax refund, (ii) determining any liability for Taxes or a right to a Tax refund, (iii) conducting or defending any proceeding in respect of Taxes or (iv) performing Tax diligence, including with respect to the impact of the transactions contemplated herein on the Company’s qualification as a REIT for U.S. federal income Tax purposes and the qualification of the Merger as a reorganization under Section 368(a) of the Code.

(c)          The Company shall be responsible for the prosecution of any claim or audit instituted after the Merger Closing Date with respect to Taxes of PGI, any PGI Subsidiary or any JV Entity attributable to any taxable period, or portion thereof, ending on or before the Merger Closing Date.

(d)          Following the Merger Closing, to the extent a Stockholder has provided a FIRPTA Notice pursuant to Section 2.01(b)(iv)(A)(x), instead of a FIRPTA Notice pursuant to Section 2.01(b)(iv)(A)(y) or cash sufficient to fund withholding pursuant to Section 2.01(b)(iv)(B), such Stockholder shall provide the Company with evidence satisfactory to the Company that such Stockholder has complied with the requirements of Temporary Treasury Regulations Section 1.897-5T(d)(1)(iii), as modified by IRS Notice 89-57, with respect to the Merger.

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(e)          Within 20 days after the Merger Closing, the Company shall submit to the Internal Revenue Service any FIRPTA Notices provided to it pursuant to Section 2.01(b)(iv)(A) in accordance with the requirements of Treasury Regulation Section 1.1445-2(d)(2)(i)(B).

(f)          The Stockholders shall (i) cause to be timely paid any New York City and New York State real property transfer taxes payable by the Stockholders as a result of, or in connection with, the Merger (collectively, the “New York Transfer Taxes”); provided, that the parties hereto acknowledge and agree that such amount of New York Transfer Taxes payable shall reflect the Company’s status as a REIT; (ii) cause to be timely and properly filed, with the Company’s cooperation, all Tax Returns with respect to such New York Transfer Taxes and (iii) provide evidence satisfactory to the Company of such payment and filing. If the actual amount of New York Transfer Taxes (expressly excluding any increase in New York Transfer Taxes payable in connection with the Merger due to any subsequent direct or indirect transfers or dispositions by any Stockholder or its Affiliates of Company Common Stock issued as Merger Consideration) owed by the Stockholders is less than the Transfer Tax Amount, then, promptly after payment of such amount is made or caused to be made by the Stockholders or is due (if payment is not made by the due date), the Stockholders shall pay the amount of such difference to the Company. If the actual amount of New York Transfer Taxes owed and actually paid by the Stockholders is greater than the Transfer Tax Amount, then, promptly after payment of such amount is made or caused to be made by the Stockholders (subject to the Stockholder’s obligation to provide evidence satisfactory to the Company of such payment and filing), the Company shall issue shares of Company Common Stock to the Stockholders, the number of which shall equal the dollar amount of such excess amount divided by the price of a share of Company Common Stock at the close of market as of the date of such payment.  The Stockholders shall use commercially reasonable efforts not to pay more than the Transfer Tax Amount, and notwithstanding anything to the contrary contained herein, prior to such payment, the Company shall have the right to review and approve (which approval shall not be unreasonably withheld, conditioned or delayed) the amount of such payment. 

Section 6.04         Tax Protection Provisions.

(a)          With respect to the period commencing on, and including, the Effective Time and ending on, and including, December 31, 2014 (the “Covenant Period”), the Company shall not, and shall cause the Operating Partnership to not, both (x) incur, directly or indirectly, any gain from the sale or exchange of a U.S. real property interest (as described in Section 897(c) of the Code) and (y) distribute any such gain or any interest in U.S. real property if the effect thereof would be to cause a Stockholder to be treated for U.S. federal income tax purposes, as recognizing “effectively connected income” as a result of the operation of Section 897 of the Code, solely as a result of such distribution, during a taxable year of the Stockholder ending on or before December 31, 2014, (“Prohibited Event”), provided, however, the Company shall not be deemed to have violated this undertaking to the extent the Prohibited Event was caused by an unaffiliated third party’s actions or exercise of its rights, including, without limitation, a third party’s exercise of buy-sell or forced sale rights, gain incurred by an entity not controlled by the Company or the Operating Partnership where the gain is allocated to the Company or the Operating Partnership as a result of its direct or indirect investment in the entity, or other similar event over which neither the Company nor the Operating Partnership would reasonably be expected to exercise control that results in a Prohibited Event (such covenant being referred to as the “No Gain Covenant”). The parties agree that the sole remedy for a violation of the No Gain Covenant shall be indemnification pursuant to, and subject to the conditions of, this Section 6.04 and, for the avoidance of doubt, not specific performance. Accordingly, for example, the Company may make a distribution in violation of No Gain Covenant to the extent it reasonably determines such distribution is required for the Company to maintain its qualification as a REIT for U.S. federal income tax purposes; provided that, in connection with such distribution, the Company will be required to indemnify the Stockholders pursuant to, and subject to the conditions of, this Section 6.04.

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(b)          If the Company becomes aware that a gain described in clause (x) of the first sentence of Section 6.04(a) is planned or scheduled to be incurred due to the actions or exercise of rights by an unaffiliated third party, the Company will use, and will cause the Operating Partnership to use, reasonable efforts to seek to have such third party delay the Prohibited Event until after the end of the Covenant Period; provided, however, that the Company shall not be required to incur any costs or expense in obtaining such delay but will permit the Stockholders to fund such costs and expenses if the Company or Operating Partnership is otherwise able through the use of its reasonable efforts to obtain such delay and, notwithstanding the occurrence of such Prohibited Event, the Company shall not, and shall cause the Operating Partnership to not, make a distribution with respect thereto, except to the extent it determines in good faith that such distribution is required for the Company to maintain its qualification as a REIT for U.S. federal income tax purposes.

(c)          If a Prohibited Event occurs in violation of the No Gain Covenant, each Stockholder agrees as follows: (w) if notified of the occurrence of such Prohibited Event, to make the filings required by Treasury Regulations Section 1.897-5T(d)(1)(iii) with its U.S. federal income tax return (or amended return) for the year in which the Effective Time occurs; (x) that such Stockholder will take the position for U.S. federal income tax purposes that notwithstanding the occurrence of such Prohibited Event, a subsequent disposition of Company Shares received in the Merger and any other Formation Transaction by such Stockholder is not subject to U.S. federal income tax (under Section 897 of the Code) if the Company Shares are not a “U.S. real property interest” with respect to such Stockholder at the time of the disposition (“No-Tax Position”) unless such Stockholder receives an opinion from a Big 4 accounting firm (or other mutually agreeable firm) that there is no substantial authority for asserting the No-Tax Position; (y) in the event the No-Tax Position is challenged by the Internal Revenue Service, such Stockholder will use reasonable best efforts to contest the challenge provided that the Company indemnifies, or causes the Operating Partnership to indemnify, for such Stockholder’s reasonable defense costs; and without limitation (z) otherwise to cooperate with the Company and/or Operating Partnership to mitigate any losses that may arise as a result of such Prohibited Event.

(d)          If a Prohibited Event occurs in violation of the No Gain Covenant, the Company will indemnify each Stockholder for the incremental net income tax liability actually incurred by such Stockholder as a result of such violation of the No Gain Covenant to the extent that (x) such violation causes such Stockholder’s receipt of Company Shares in the Merger and any other Formation Transaction to be treated as a taxable exchange under Section 897 of the Code or (y) such breach causes gain from an actual sale or other disposition of Company Shares received in the Merger and any other Formation Transaction by such Stockholder to be taxed under Section 897 of the Code, provided, however, that (i) such Stockholder shall not be indemnified for any such tax liability under this Section 6.04 if such Stockholder breached a covenant in Section 6.04(c) and, (ii) for the avoidance of doubt, to the extent gain realized in the Merger and any other Formation Transaction, as applicable, or a disposition of Company Shares received in the Merger and any other Formation Transaction, as applicable, would be subject to U.S. federal income tax regardless of such violation of the No Gain Covenant, the Company will have no liability hereunder for such violation.

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(e)          The indemnification notice and claim procedures set forth in Section 5.03 shall apply to the indemnification obligations set forth in this Section 6.04.

Section 6.05         Liability for Transfer Taxes. Each Stockholder agrees to indemnify the Company for any Incremental Transfer Taxes incurred as a result of any direct or indirect transfers of the Company Shares issued as Merger Consideration or interests therein within two years after the IPO Closing Date, provided that such Company Shares shall be the Company’s sole recourse with respect to such indemnification obligation. Each Stockholder hereby grants a security interest in 50% of the Company Shares to be received by such Stockholder as Merger Consideration to the Company and hereby irrevocably appoints the Company, and any of its agents, officers, or employees as its attorney-in fact, which shall be deemed coupled with an interest, with full power to prepare, execute and deliver any documents, instruments and agreements as may be appropriate to perfect and continue such security interest in favor of the Company. The security interest granted pursuant to this Section 6.05 shall attach to Company Shares that are not included in the Indemnity Holdback Amount. The Company agrees that the security interest in the Company Shares may be released, or collateral may be substituted for such Company Shares, in accordance with the terms of the Escrow Agreement.

Section 6.06         Commercially Reasonable Efforts By the Company and PGI. Each of the Company and PGI shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Laws or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Agreement, and (b) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits or authorizations.

Article VII

GENERAL PROVISIONS

Section 7.01         Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when (a) delivered personally, (b) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid, (c) one (1) Business Day after being sent by a nationally recognized overnight courier or (d) transmitted by facsimile if confirmed within 24 hours thereafter by a signed original sent in the manner provided in clause (a), (b) or (c) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such party):

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Address of the Company:	Paramount Group, Inc. 1633 Broadway, Suite 1801 New York, New York 10019 Facsimile: (212) 237-3197 Attn:  General Counsel
Address of PGI:	c/o Paramount Group, Inc. 1633 Broadway, Suite 1801 New York, New York 10019 Facsimile: (212) 237-3197 Attn:  General Counsel
Address of the Stockholders and the Stockholders’ Representative:	c/o CURA Vermögensverwaltung, G.m.b.H. & Co., KG Werner-Otto-Straße 1-7 D-22179 Hamburg, Germany Attention: Thomas Armbrust Fax: +49-40-6461-2960

Section 7.02         Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)          “Accredited Investor” means an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act.

(b)          “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(c)          “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.

(d)          “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.

(e)          “Company’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(f)          “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Company and the Operating Partnership and their Subsidiaries, taken as a whole, after giving effect to the Formation Transactions and the IPO.

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(g)          “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.

(h)          “Fund Contribution Agreements” means those Contribution Agreements set forth on Exhibit E.

(i)          “Fund GP Entities” means those entities set forth on Exhibit F.

(j)          “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(k)          “Incremental Transfer Taxes” means any additional transfer taxes attributable to the transactions contemplated by this Agreement and the other Formation Transactions as a result of the failure of any such transaction to qualify as a “real estate investment trust transfer” under New York Tax Law section 1402 or under New York City Administrative Code section 11-2102 due to direct or indirect transfers of Company Shares issued as Merger Consideration occurring within two years after the IPO Closing Date.

(l)          “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority.

(m)          “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.

(n)          “MRI” means Metropolitan Rental Investments, Inc.

(o)          “OP Units” means the limited partnership interests of Paramount Group Operating Partnership LP.

(p)          “Organizational Documents” means with respect to any entity, the certificate of formation, limited liability company or operating agreement, certificate of incorporation, bylaws, certificate of limited partnership agreement and any other governing agreement, as applicable.

(q)          “Paramount Funds” means the private equity real estate funds managed by PGI or a PGI Subsidiary, including the Fund GP Entities.

(r)          “Permitted Liens” means (i) Liens for unpaid Taxes (other than statutory liens for Taxes not yet due and payable); (ii) zoning Laws generally applicable to the districts in which the Properties are located; (iii) easements for public utilities, encroachments, rights of access and/or other non-monetary matters that do not materially interfere with the use of the Properties; (iv) Liens securing Permitted Activities; (v) Liens arising in the ordinary course of business; (vii) Liens securing indebtedness outstanding as of September 30, 2014 or incurred on an arms’ length basis thereafter and (viii) any exceptions contained in the title policies relating to the Properties as of the Merger Closing Date.

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(s)          “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

(t)          “PGI Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of PGI and its Subsidiaries, taken as a whole, including such entities’ direct and indirect interests in the JV Entities.

(u)          “PGI’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(v)         “Price to the Public” means the public offering price of a share of Company Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the Registration Statement.

(w)          “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(x)          “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii) (A) 50% or more of the voting power of the voting capital stock or other equity interests, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.

(y)          “Tax” (and, with its correlative meaning, “Taxes”) means any and all taxes, including any interest, penalties, or other additions to tax that may become payable in respect thereof, which taxes shall include, without limiting the generality of the foregoing, all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, unclaimed property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

(z)          “Tax Return” means any return, statement, schedule, declaration, claim for refund, report, document or form filed or required to be filed with respect to Taxes, including any amendment, attachment and supplement thereof.

(aa)         “Transfer Tax Amount” means $218,000.

Section 7.03         Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. All counterparts shall collectively constitute one agreement (or amendment, as applicable). The exchange of counterparts of this Agreement among the parties by means of facsimile transmission or by electronic transmission (pdf) which shall contain authentic reproductions shall constitute a valid exchange of this Agreement and shall be binding upon the parties hereto.

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Section 7.04         Entire Agreement; Third-Party Beneficiaries. This Agreement and the Escrow Agreement, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties hereto.

Section 7.05         Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Section 7.06         Assignment. This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that this Agreement may not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Company may assign its rights and obligations hereunder to an Affiliate.

Section 7.07         Jurisdiction. The parties hereto hereby (a) submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York City, New York, with respect to any dispute arising out of this Agreement or any transaction contemplated hereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.08         Dispute Resolution. The parties intend that this Section 7.08 will be valid, binding, enforceable, exclusive and irrevocable and that it shall survive any termination of this Agreement.

(a)          Upon any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 7.08(c) below without regard to any such 10-day negotiation period.

28

(b)          Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 7.08(a) above shall be submitted to final and binding arbitration in New York before one neutral and impartial arbitrator, in accordance with the Laws of the State of New York for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days following a demand for arbitration, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.

(c)          Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

(d)          The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.

Section 7.09         Severability. Each provision of this Agreement will be interpreted so as to be effective and valid under applicable Laws, but if any provision is held invalid, illegal or unenforceable under applicable Laws in any jurisdiction, then such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein.

29

Section 7.10         Rules of Construction.

(a)          The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

(b)          The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including fin the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

Section 7.11         Equitable Remedies. The parties agree that irreparable damage would occur to the Company, on the one hand, and PGI, on the other hand, in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Company, on the one hand, and PGI, on the other hand, shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions hereof in any federal or state court located in New York, this being in addition to any other remedy to which the parties are entitled under this Agreement or otherwise at law or in equity.

Section 7.12         Time of the Essence. Time is of the essence with respect to all obligations under this Agreement.

Section 7.13         Descriptive Headings. The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

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Section 7.14         No Personal Liability Conferred. This Agreement shall not create or permit any personal liability or obligation on the part of any officer, director, partner, employee or shareholder of the Company or PGI.

Section 7.15         Amendments. This Agreement may be amended by appropriate instrument, without the consent of PGI, at any time prior to the Merger Closing Date; provided, that no such amendment, modification or supplement shall be made that alters the amount or changes the form of the consideration to be delivered to PGI.

[Signature pages follow]

31

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective duly authorized officers or representatives, all as of the date first written above.

PARAMOUNT GROUP, INC.,
a Delaware corporation
By:	/s/ Gage R. Johnson
	Name: Gage R. Johnson
	Title: Sr. Vice President and Special Agent
PARAMOUNT GROUP, INC.,
a Maryland corporation
By:	/s/ Albert Behler
	Name: Albert Behler
	Title: President and C.E.O

[Signature Page to PGI Merger Agreement]

STOCKHOLDER
By:	/s/ Maren Otto
	Name:  Maren Otto

[Signature Page to PGI Merger Agreement]

STOCKHOLDER
By:	/s/ Katharina Otto-Bernstein
	Name:  Katharina Otto-Bernstein

[Signature Page to PGI Merger Agreement]

STOCKHOLDER
By:	/s/ Alexander Otto
	Name:  Alexander Otto

[Signature Page to PGI Merger Agreement]

EXHIBIT A

Properties

[See attached]

A-1

EXHIBIT B

Escrow Agreement

[See attached]

B-1

EXHIBIT C

Lock-up Agreement

[See attached]

C-1

EXHIBIT D

Form of Letter of Transmittal

[See attached]

D-1

EXHIBIT E

Fund Contribution Agreements

Contribution Agreements between the Operating Partnership or the Company, as applicable and each of the following entities:

Paramount Group Real Estate Fund I, L.P.

Paramount Group Real Estate Fund III, L.P.

Paramount Group Real Estate Fund IV, L.P.

PGREF IV Parallel Fund Sub US LP

Paramount Group Real Estate Fund V (Core), L.P.

Paramount Group Real Estate Fund V (CIP), L.P.

PGREF V (Core) Parallel Fund Sub US LP

E-1

EXHIBIT F

Fund GP Entities

Fund GP Entity:	Fund(s) managed by Fund GP Entity
Paramount GREF, L.L.C.	Paramount Group Real Estate Fund I, L.P.
	Paramount Group Real Estate Fund II, L.P.
Paramount GREF III, L.L.C.	Paramount Group Real Estate Fund III, L.P.
Paramount GREF IV, L.L.C.	Paramount Group Real Estate Fund IV, L.P.
	PGREF IV Parallel Fund (Cayman), L.P.
Paramount GREF V, L.L.C.	Paramount Group Real Estate Fund V (Core), L.P.
	PGREF V (Core) Parallel Fund (Cayman), L.P.
Paramount GREF V (CIP), L.L.C.	Paramount Group Real Estate Fund V (CIP), L.P.
PGRESS GP LLC	Paramount Group Real Estate Special Situations Fund, L.P.
	Paramount Group Real Estate Special Situations Fund-A, L.P.
	Paramount Group Real Estate Special Situations Fund-H, L.P.
Paramount GREF VII, LLC	Paramount Group Real Estate Fund VII, LP
	Paramount Group Real Estate Fund VII-H, LP (Cayman)
Paramount GREF VIII, LLC	Paramount Group Real Estate Fund VIII, LP
Paramount GREF RDF, LLC	Paramount Group Residential Development Fund, LP

F-1

SCHEDULE 1.07

Merger Consideration

PGI

Stockholder	Merger Consideration	Indemnity Holdback Amount
Maren Otto	4,439,560 Company Shares	184,294 Company Shares
Katharina Otto-Bernstein	8,790,327 Company Shares	364,901 Company Shares
Alexander Otto	12,924,560 Company Shares	536,520 Company Shares

Schedule 1.07

EX-99.2

Exhibit 2

AGREEMENT and plan of merger

by and among

COSMOS RENTAL INVESTMENTS, INC.,
a Delaware corporation,

PARAMOUNT GROUP, INC.,
a Maryland corporation,

and

THE STOCKHOLDER

Dated as of November 6, 2014

TABLE OF CONTENTS

		Page
Article I THE MERGER		2
Section 1.01	The Merger	2
Section 1.02	Merger Closing	2
Section 1.03	Effective Time	3
Section 1.04	Effect of the Merger	3
Section 1.05	Organizational Documents	3
Section 1.06	Directors and Officers of the Surviving Entity	3
Section 1.07	Conversion of Equity Interests	3
Section 1.08	Tax Treatment of Merger	3
Section 1.09	Payment of Merger Consideration	4
Article II CLOSING; TERM OF AGREEMENT		4
Section 2.01	Conditions Precedent	4
Section 2.02	Closing Deliveries	6
Section 2.03	Term of the Agreement	7
Section 2.04	Effect of Termination	7
Section 2.05	Tax Withholding	7
Section 2.06	Transaction Costs	7
Section 2.07	Further Action	7
Article III REPRESENTATIONS AND WARRANTIES  OF THE COMPANY		8
Section 3.01	Organization; Authority	8
Section 3.02	Due Authorization	8
Section 3.03	Consents and Approvals	8
Section 3.04	Tax Matters	8
Section 3.05	No Violation	9
Section 3.06	Validity of Company Shares	9
Section 3.07	Litigation	9
Section 3.08	Broker	9
Section 3.09	No Other Representations or Warranties	9
Article IV REPRESENTATIONS AND WARRANTIES OF COSMOS		9
Section 4.01	Organization; Authority	10
Section 4.02	Capitalization	10
Section 4.03	Due Authorization	11
Section 4.04	Consents and Approvals	11
Section 4.05	Tax Matters	11
Section 4.06	No Violation	12
Section 4.07	Solvency	12
Section 4.08	Litigation	12
Section 4.09	Licenses and Permits	13
Section 4.10	The Properties	13
Section 4.11	Insurance	15

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Section 4.12	Environmental Matters	15
Section 4.13	Holding Period	15
Section 4.14	Investments	15
Section 4.15	Broker	15
Section 4.16	Eminent Domain	16
Section 4.17	Assets and Liabilities	16
Section 4.18	No Other Representations or Warranties	16
Article V INDEMNIFICATION		16
Section 5.01	Company Indemnification	16
Section 5.02	Cosmos Indemnification	17
Section 5.03	Notice of Claims	18
Section 5.04	Third Party Claims	18
Section 5.05	Survival of Representations and Warranties	19
Section 5.06	Establishment of Indemnity Holdback Escrow	19
Section 5.07	Exclusive Remedy	19
Section 5.08	Tax Treatment	19
Article VI COVENANTS; ADDITIONAL AGREEMENTS		19
Section 6.01	Certain Covenants of Cosmos	19
Section 6.02	Stockholder’s Representative	20
Section 6.03	Tax Covenants	20
Section 6.04	Liability for Transfer Taxes	21
Section 6.05	Commercially Reasonable Efforts By the Company and Cosmos	21
Article VII GENERAL PROVISIONS		21
Section 7.01	Notices	21
Section 7.02	Definitions	22
Section 7.03	Counterparts	24
Section 7.04	Entire Agreement; Third-Party Beneficiaries	24
Section 7.05	Governing Law	24
Section 7.06	Assignment	25
Section 7.07	Jurisdiction	25
Section 7.08	Dispute Resolution	25
Section 7.09	Severability	26
Section 7.10	Rules of Construction	26
Section 7.11	Equitable Remedies	27
Section 7.12	Time of the Essence	27
Section 7.13	Descriptive Headings	27
Section 7.14	No Personal Liability Conferred	27
Section 7.15	Amendments	27

ii

EXHIBITS
Exhibit A	Properties
Exhibit B	Escrow Agreement
Exhibit C	Lock-up Agreement
Exhibit D	Form of Letter of Transmittal
SCHEDULES
Schedule 1.07	Merger Consideration

iii

DEFINED TERMS

Term	Section
Accredited Investor	Section 7.02
Affiliate	Section 7.02
Agreement	Introduction
Business Day	Section 7.02
Certificate of Merger	Section 1.03
Claim	Section 5.03
Claim Notice	Section 5.03
Closing Documents	Section 2.02
Code	Section 7.02
Company	Introduction
Company Cap	Section 5.07
Company Common Stock	Recitals
Company Indemnified Party	Section 5.02
Company Material Adverse Effect	Section 7.02
Company Shares	Recitals
Company’s Knowledge	Section 7.02
Cosmos	Introduction
Cosmos Indemnified Party	Section 5.01
Cosmos Material Adverse Effect	Section 7.02
Cosmos Subsidiary	Section 4.01
Cosmos’s Knowledge	Section 7.02
Disclosure Letter	Article IV
Dispute	Section 7.08
Effective Time	Section 1.03
Environmental Laws	Section 7.02
Equity Interest	Section 1.07
Escrow Agreement	Recitals
Expiration Date	Section 5.05
Formation Transactions	Recitals
Fund V CIP	Section 4.17
Governmental Authority	Section 7.02
Incremental Transfer Taxes	Section 7.02
Indemnified Party	Section 5.03
Indemnifying Party	Section 5.03
Indemnity Holdback Amount	Recitals
IPO	Recitals
IPO Closing	Section 1.02
JV Entities	Section 4.01
Laws	Section 7.02
Leases	Section 4.10

iv

Term	Section
Liens	Section 7.02
Lock-up Agreement	Recitals
Losses	Section 5.01
Merger	Recitals
Merger Closing	Section 1.02
Merger Closing Date	Section 1.02
Merger Consideration	Section 1.07
New York Transfer Taxes	Section 6.03
Operating Partnership	Recitals
OP Units	Section 7.02
Organizational Documents	Section 7.02
Outside Date	Section 2.03
Permitted Activities	Section 4.17
Permitted Distributions	Section 4.17
Permitted Liens	Section 7.02
Person	Section 7.02
Price to the Public	Section 7.02
Properties	Recitals
Property	Recitals
Property Interests	Recitals
Registration Rights Agreement	Recitals
Registration Statement	Recitals
REIT	Recitals
SEC	Recitals
Securities Act	Section 7.02
Stockholder	Recitals
Stockholders Agreement	Recitals
Subsidiary	Section 7.02
Surviving Entity	Section 1.01
Tax	Section 7.02
Tax Return	Section 7.02
Third Party Claims	Section 5.04

v

AGREEMENT and plan of merger

THIS AGREEMENT AND PLAN OF MERGER (including all exhibits and schedules, this “Agreement”) is made and entered into as of November 6, 2014, by and among COSMOS RENTAL INVESTMENTS, INC., a Delaware corporation (“Cosmos”), PARAMOUNT GROUP, INC., a Maryland corporation (the “Company”), and the stockholder whose name appears on the signature page hereto (the “Stockholder”). Capitalized terms used and not defined in the body of this Agreement shall have the meanings set forth in Section 7.02 hereto.

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of the common stock, par value $0.01 per share (“Company Common Stock”), of the Company, which will operate as a self-administered and self-managed real estate investment trust (“REIT”) within the meaning of Sections 856 through 860 of the Code;

WHEREAS, in connection with the IPO, the Company, which is the sole general partner of Paramount Group Operating Partnership LP (the “Operating Partnership”), desires to engage in a series of transactions through which the Company and the Operating Partnership will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (collectively, the “Formation Transactions”), which transactions are more specifically set forth in the Company’s Registration Statement on Form S-11 (the “Registration Statement”) filed with the Securities and Exchange Commission (“SEC”), as amended from time to time;

WHEREAS, Cosmos owns, directly or indirectly, interests (the “Property Interests”) in the properties set forth on Exhibit A hereto, under the heading “Cosmos” (each, a “Property” and together the “Properties”);

WHEREAS, as part of the Formation Transactions, Cosmos will merge with and into the Company, with the Company as the surviving entity (the “Merger”) and in consideration thereof the Stockholder will receive shares of Company Common Stock (“Company Shares”);

WHEREAS, the board of directors of the Company and the stockholder of the Company have approved and authorized the Merger in accordance with applicable Laws and the Company’s Organizational Documents;

WHEREAS, the board of directors of Cosmos and the Stockholder have approved and authorized the Merger in accordance with applicable Laws and Cosmos’s Organizational Documents;

WHEREAS, at the Merger Closing, the Company will deposit the number of Company Shares set forth as the Indemnity Holdback Amount opposite the Stockholder’s name on Schedule 1.07 under the heading “Cosmos”, which represents approximately 1.5% of the Merger Consideration issuable or payable to the Stockholder pursuant to this Agreement (collectively, the “Indemnity Holdback Amount”) into an Indemnity Holdback Escrow (as defined in the Escrow Agreement) pursuant to the Escrow Agreement in the form of Exhibit B attached hereto (the “Escrow Agreement”), in order to provide a remedy for a Company Indemnified Party as provided in Section 5.02;

WHEREAS, concurrently with the execution of this Agreement, the Company has entered into a registration rights agreement with the Stockholder (the “Registration Rights Agreement”);

WHEREAS, concurrently with the execution of this Agreement, the Company has entered into a stockholders agreement with the Stockholder and the other individuals named therein (the “Stockholders Agreement”);

WHEREAS, concurrently with the execution of this Agreement, the Stockholder has executed and delivered a lock-up agreement to the underwriters of the IPO, a copy of which is attached as Exhibit C hereto (the “Lock-up Agreement”); and

WHEREAS, it is intended that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the receipt and sufficiency of which is hereby acknowledged and agreed, the parties hereto, intending to be legally bound hereby, agree as follows:

Article I

THE MERGER

Section 1.01         The Merger. At the Effective Time, subject to and upon the terms and conditions of this Agreement and in accordance with applicable Laws, Cosmos shall be merged with and into the Company, whereby the separate existence of Cosmos shall cease, and the Company shall continue its existence under Maryland General Corporation Law as the surviving entity in the Merger (sometimes referred to as the “Surviving Entity”).

Section 1.02         Merger Closing. Unless this Agreement shall have been terminated pursuant to Section 2.03, and subject to satisfaction or waiver of the conditions in Section 2.01, the closing of the Merger and the other transactions contemplated hereby (the “Merger Closing” or the “Merger Closing Date”) shall occur concurrently with the closing of the IPO (the “IPO Closing”), or up to one (1) day prior to, but conditioned upon the subsequent occurrence of, the IPO Closing.  The Merger Closing shall take place at the offices of Goodwin Procter llp, 620 Eighth Avenue, New York, NY 10018, or as mutually agreed between the Company and Cosmos. In connection with the foregoing, the parties hereto hereby agree that the specific order in which the Merger Closing, the IPO Closing and the closing of the other transactions that are part of or related to the Formation Transactions occur shall be as determined by the Company.

2

Section 1.03        Effective Time. On the Merger Closing Date (or on such other date as the Company and Cosmos may agree) the Company and Cosmos shall file, or shall cause to be filed, a certificate of merger or similar document with respect to the Merger (the “Certificate of Merger”) as may be required by applicable Laws with the Secretary of State of each applicable jurisdiction, providing that the Merger shall become effective upon filing or, if agreed upon by the Company and Cosmos, as of such other date or time as is set forth in the Certificate of Merger (the “Effective Time”), together with any certificates and other filings or recordings related thereto, in such forms as are required by, and executed in accordance with, the relevant provisions of applicable Laws.

Section 1.04        Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Certificate of Merger and applicable Laws.

Section 1.05        Organizational Documents. At the Effective Time, the Organizational Documents of the Company, as in effect immediately prior to the Effective Time, shall be the Organizational Documents of the Surviving Entity until thereafter amended as provided therein or in accordance with applicable Laws.

Section 1.06        Directors and Officers of the Surviving Entity. The directors and officers of the Company immediately prior to the Effective Time shall be and become the directors and officers of the Surviving Entity as of the Effective Time, each to hold office in accordance with the Organizational Documents of the Surviving Entity.

Section 1.07        Conversion of Equity Interests.

(a)       Under and subject to the terms and conditions of this Agreement, the Stockholder is entitled to receive as a result of and upon consummation of the Merger, the Merger Consideration set forth under the heading “Cosmos” in Schedule 1.07.

(b)       At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Cosmos or the Stockholder, each outstanding share of (i) common stock, par value $1,000.00, and (ii) Series A preferred stock, par value $1,000.00, in Cosmos (each an “Equity Interest”) shall be converted automatically into the right of the Stockholder to receive Company Shares, in the amount set forth opposite her name under the heading “Cosmos” in Schedule 1.07 (the “Merger Consideration”).

(c)       No fractional Company Shares shall be issued to the Stockholder pursuant to this Agreement. If aggregating all Company Shares that the Stockholder otherwise would be entitled to receive pursuant to this Agreement would require the issuance of a fractional Company Share, the Stockholder shall instead be entitled to receive one full Company Share in lieu of such fractional Company Share.

(d)       From and after the Effective Time, each Equity Interest converted into the right to receive the Merger Consideration pursuant to Section 1.07(b) shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and the holder of such Equity Interest so converted shall thereafter cease to have any rights as a stockholder, except the right to receive the Merger Consideration applicable thereto.

Section 1.08        Tax Treatment of Merger. It is intended that, for U.S. federal income tax purposes, the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement constitutes, and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3.

3

Section 1.09       Payment of Merger Consideration.

(a)       After the Effective Time, upon surrender by the Stockholder of her Equity Interests together with a duly executed letter of transmittal in the form attached hereto as Exhibit D and the certificates, if any, evidencing such Equity Interests to the Company, the Stockholder shall be entitled to receive from the Company in exchange therefor the portion of the Merger Consideration to which the Stockholder is entitled (less the Indemnity Holdback Amount). Risk of loss and title to the Equity Interests of the Stockholder shall pass only upon delivery to the Company of such duly executed letter of transmittal and the certificates, if any, evidencing such Equity Interests.

(b)       Notwithstanding any other provisions of this Agreement, dividends or other distributions payable on any portion of the Merger Consideration after the Effective Time, but prior to the delivery of such portion of the Merger Consideration to the Stockholder pursuant to Section 1.09(a) above, shall be paid promptly by the Company to the Stockholder, as set forth in Schedule 1.07, entitled to receive such portion of the Merger Consideration upon compliance with the procedures set forth in this Section, less the amount of any withholding taxes which may be required thereon as reasonably determined by the Company. At and after the Effective Time, there shall be no transfers on the applicable record books of the Equity Interests that are outstanding immediately prior to the Effective Time.

(c)       On the Merger Closing Date, the Company will deposit the Indemnity Holdback Amount with the Escrow Agent (as defined in the Escrow Agreement) in accordance with the terms and conditions of the Escrow Agreement. The approval of the Merger and this Agreement by the Stockholder shall constitute approval of the Escrow Agreement and of all of the arrangements relating thereto, including without limitation the placement of the Indemnity Holdback Amount in escrow and the appointment of the Stockholder’s Representative.

Article II

CLOSING; TERM OF AGREEMENT

Section 2.01       Conditions Precedent.

(a)       Condition to Each Party’s Obligations. The respective obligation of each party to effect the transactions contemplated by this Agreement to occur on the Merger Closing Date is subject to the satisfaction or waiver on or prior to the Merger Closing of the following conditions:

(i)         Consent. The requisite consent of the Stockholder approving the Merger shall have been obtained. This condition may not be waived by any party.

(ii)         Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the SEC seeking a stop order. This condition may not be waived by any party.

4

(iii)         IPO Proceeds. The Company shall have received substantially currently with the Merger Closing hereunder the proceeds from the IPO. This condition may not be waived by any party.

(iv)         No Injunction. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.

(b)      Conditions to Obligations of the Company. The obligation of the Company to effect the transactions contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Merger Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Company in whole or in part):

(i)         Representations and Warranties of Cosmos. (i) The representations and warranties of Cosmos set forth in Section 4.17 shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time, (ii) each representation and warranty of Cosmos contained in this Agreement (other than in Section 4.17) that is qualified by materiality or Cosmos Material Adverse Effect shall be true and correct in all respects as of the date of this Agreement and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (iii) each representation and warranty of Cosmos contained in this Agreement (other than in Section 4.17) that is not qualified by materiality or Cosmos Material Adverse Effect shall be true and correct as of the date of this Agreement and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Cosmos Material Adverse Effect.

(ii)         Performance by Cosmos. Cosmos shall have performed in all material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Merger Closing Date.

(iii)         Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for Cosmos to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of Cosmos to consummate the transactions contemplated by this Agreement) shall have been obtained.

(iv)         FIRPTA Notice. The Stockholder shall have provided the Company with a properly executed FIRPTA notice substantially in the form set forth in Treasury Regulation Section 1.1445-2(b)(2) sufficient to avoid any withholding under Section 1445 of the Code.

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(v)         Closing Documents. Cosmos shall have executed and delivered to the Company the documents to which it is a party which are required to be delivered pursuant to Section 2.02.

(c)        Conditions to Obligations of Cosmos. The obligation of Cosmos to effect the transactions contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Merger Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by Cosmos in whole or in part):

(i)         Representations and Warranties. (i) Each representation and warranty of the Company contained in this Agreement that is qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (ii) each representation and warranty of the Company contained in this Agreement that is not qualified by materiality or Company Material Adverse Effect shall be true and correct as of the date of this Agreement and as of the Effective Time as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Company Material Adverse Effect.

(ii)         Performance by the Company. The Company shall have performed in all material respects all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Merger Closing Date.

(iii)         Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Company to consummate the transactions contemplated hereby (except for those the absence of which would not have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement) shall have been obtained.

(iv)         Offering Price. Cosmos shall have approved the Price to the Public.

(v)         Closing Documents. The Company shall have executed, acknowledged and delivered to Cosmos the documents required to be delivered pursuant to Section 2.02.

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Section 2.02         Closing Deliveries. On the Merger Closing Date, each of the parties shall make, execute, acknowledge and deliver the legal documents and other items to which it is a party or for which it is otherwise responsible that are necessary to carry out the intention of this Agreement and the other transactions contemplated to take place in connection therewith (collectively, the “Closing Documents”). The Closing Documents and other items to be delivered including the delivery by the Company to the Escrow Agent (as defined in the Escrow Agreement) evidence of the issuance of the Company Shares that constitutes the Indemnity Holdback Amount to the Escrow Agent pursuant to this Agreement.

Section 2.03         Term of the Agreement. This Agreement shall terminate automatically if the Merger Closing or the IPO Closing shall not have been consummated on or prior to March 31, 2015 (such date is hereinafter referred to as the “Outside Date”). In addition, this Agreement may be terminated before the Merger Closing by a document signed by the Company and Cosmos.

Section 2.04         Effect of Termination. In the event of termination of this Agreement for any reason, all obligations on the part of the Company and Cosmos under this Agreement shall terminate, except that the obligations set forth in Article VII shall survive, provided, that nothing in this Agreement shall relieve any party hereto from liability for any breach of this Agreement or any failure to perform its obligations under this Agreement.

Section 2.05         Tax Withholding. The Company shall be entitled to deduct and withhold, or cause to be deducted and withheld, from the Merger Consideration payable (or deemed payable) pursuant to this Agreement, including the Indemnity Holdback Amount, to the Stockholder, such amounts as the Company is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. Tax law (as determined by the Company in its reasonable discretion). To the extent that amounts are so deducted and withheld by the Company, such amounts shall be treated for all purposes of this Agreement as having been paid to the Stockholder.

Section 2.06         Transaction Costs. Subject to Section 6.03, if the Merger Closing occurs, the Company shall be solely responsible for all transaction costs and expenses of the Company and the Stockholder that have not previously been paid in connection with this Agreement, which include, but are not limited to, lender consent fees, legal, accounting and consultant fees.

Section 2.07         Further Action. If, at any time after the Effective Time, the Surviving Entity shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of Cosmos acquired or to be acquired by the Surviving Entity as a result of, or in connection with, the Merger or otherwise to carry out this Agreement, the Surviving Entity shall be authorized to execute and deliver, in the name and on behalf of Cosmos, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of Cosmos, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Entity or otherwise to carry out this Agreement.

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Article III

REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company hereby represents and warrants to Cosmos as set forth below which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of that earlier date):

Section 3.01         Organization; Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Maryland. The Company has all requisite power and authority to enter into this Agreement and all agreements contemplated hereby to which it is party and to carry out the transactions contemplated hereby and thereby, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.02         Due Authorization. The execution, delivery and performance of this Agreement by the Company have been duly and validly authorized by all necessary action of the Company. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of the Company pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 3.03         Consents and Approvals. Except in connection with the IPO and the consummation of the Formation Transactions or as shall have been obtained on or prior to the Merger Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Company in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.04         Tax Matters. At the effective time of the IPO and at the Merger Closing, the Company shall be organized in a manner so as to qualify for taxation as a REIT pursuant to Sections 856 through 860 of the Code. The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31 of the year in which the Merger Closing takes place.

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Section 3.05         No Violation. None of the execution, delivery or performance of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any material right of termination, acceleration, cancellation or other material right under, (a) the Organizational Documents of the Company, (b) any agreement, document or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Company or any of its Subsidiaries (or its assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.06         Validity of Company Shares. The Company Shares, when issued and delivered pursuant to the terms of this Agreement will be duly authorized by the Company and will be validly issued by the Company, free and clear of all Liens created by the Company (other than Liens created by the charter of the Company, the Escrow Agreement, the Lock-up Agreement or this Agreement).

Section 3.07         Litigation. There is no action, suit or proceeding pending or, to the Company’s Knowledge, threatened against the Company, the Operating Partnership or any of their Subsidiaries which is reasonably expected to have a Company Material Adverse Effect or which challenges or impairs the ability of the Company to execute or deliver, or perform its obligations under, this Agreement and the documents executed by it pursuant to this Agreement or to consummate the transactions contemplated hereby or thereby.

Section 3.08         Broker. None of the Company nor any of its Subsidiaries nor any of their managers, members, partners, officers, directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of Cosmos or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Agreement.

Section 3.09         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article III, the Company shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby.

Article IV

REPRESENTATIONS AND WARRANTIES OF COSMOS

Except as disclosed in the disclosure letter delivered to the Company by Cosmos on the date hereof (the “Disclosure Letter”), Cosmos hereby represents and warrants to the Company as set forth below, and the Stockholder hereby represents and warrants to the Company as set forth in Section 4.14 below, which representations are true and correct as of the date hereof (or such other date specifically set forth below and as of the Merger Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

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Section 4.01       Organization; Authority

(a)       Cosmos is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Cosmos has all requisite power and authority to enter into this Agreement and all agreements contemplated hereby to which it is party and to carry out the transactions contemplated hereby and thereby, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Cosmos Material Adverse Effect.

(b)       Section 4.01(b) of the Disclosure Letter, sets forth as of the date hereof, with respect to Cosmos, (i) the name and the jurisdiction of organization or incorporation, as the case may be, of each Subsidiary of Cosmos (each a “Cosmos Subsidiary”) and (ii) the ownership interest of Cosmos or another Cosmos Subsidiary in each such Cosmos Subsidiary. Each Cosmos Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a Cosmos Material Adverse Effect.

(c)         Cosmos or the Cosmos Subsidiaries own the equity interests in the Persons set forth on Section 4.01(c) of the Disclosure Letter (together with the Subsidiaries of such Persons, the “JV Entities”) in the stated percentage set forth on Section 4.01(c) of the Disclosure Letter.

Section 4.02         Capitalization. Section 4.02 of the Disclosure Letter sets forth, as of the date hereof, a true, correct and complete description of the capitalization of Cosmos as set forth in the books and records of Cosmos. All of the issued and outstanding equity interests of Cosmos are validly issued and are not subject to appraisal, dissenters or similar rights. There are no outstanding rights to purchase subscriptions, warrants, options or any other security convertible into or exchangeable for equity interests in Cosmos. Except as provided for or contemplated by this Agreement or any other agreements referenced herein, there are no, and, as of the Merger Closing, there will not be any rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements, instruments or understandings of any kind outstanding entitling any Person to acquire any equity interests in the Cosmos Subsidiaries or JV Entities, except pursuant to Permitted Liens or rights established pursuant to the terms of the Organizational Documents and related agreements with respect to the Cosmos Subsidiaries and JV Entities that have been previously disclosed to the Company.

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Section 4.03         Due Authorization. The execution, delivery and performance of this Agreement by Cosmos have been duly and validly authorized by all necessary action required of Cosmos. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of Cosmos pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of Cosmos, enforceable against Cosmos, in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding in law or in equity).

Section 4.04         Consents and Approvals. Except as shall have been satisfied on or prior to the Merger Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by Cosmos or any Cosmos Subsidiary or JV Entity in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Cosmos Material Adverse Effect.

Section 4.05        Tax Matters.

(a)       Cosmos and each Cosmos Subsidiary and JV Entity has timely filed, or will timely file, all Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) in accordance with all applicable Laws. All such Tax Returns are correct and complete in all material respects, and Cosmos and each Cosmos Subsidiary and JV Entity has paid (or had paid on its behalf) all Taxes required to be paid by it (whether or not shown on such Tax Returns), and no deficiencies for any Taxes have been proposed, asserted or assessed in writing against Cosmos, or any Cosmos Subsidiary or JV Entity and no requests for waivers of the time to assess any such Taxes are pending and no such waivers have been granted.

(b)      There are no Liens as a result of any unpaid Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or property of Cosmos, any Cosmos Subsidiary or any JV Entity.

(c)       Except as would not reasonably be expected to have a Cosmos Material Adverse Effect, there are no pending or, to Cosmos’ Knowledge, threatened audits, assessments or other actions for or relating to a liability in respect of income or non-income Taxes of Cosmos, any Cosmos Subsidiary or any JV Entity.

(d)       Cosmos has entered into this Agreement for good and valid business reasons.

(e)       The Stockholder has no plan or intention to sell, exchange or transfer Equity Interests for consideration other than Company Common Stock, in contemplation of the Merger, to the Company (or any party related to the Company) or sell, exchange or transfer any Company Common Stock received in the Merger to the Company (or any party related to the Company).

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(f)       Cosmos has not agreed to assume, nor will assume, directly or indirectly, any expense or other liability, whether fixed or contingent, of the Stockholder in connection with or as part of the Merger or any related transaction.

(g)       No part of the Merger Consideration will be received by the Stockholder as a creditor, employee or in any capacity other than as a stockholder of Cosmos.

(h)       Cosmos is a “United States real property holding corporation” for U.S. federal income tax purposes.

(i)        Cosmos holds cash or cash equivalents (excluding any cash or cash equivalents taken into account in the net amount of tangible assets and liabilities set forth in Section 4.17 of the Disclosure Letter) in an amount that is at least equal to the unpaid Taxes owed by it for all taxable periods ending on or prior to the Merger Closing Date.

(j)        None of Cosmos or any Cosmos Subsidiary is or ever has been a party to or bound by, or could have any liability under, any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement (other than commercial agreements entered into in the ordinary course of business, the principal purpose of which is not related to Taxes).

(k)      None of Cosmos or any Cosmos Subsidiary has any liability for Taxes of any person arising from the application of Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or foreign law (other than in respect of being a member of a consolidated group the common parent of which is Cosmos), or as a transferee or successor.

Section 4.06         No Violation. None of the execution, delivery or performance of this Agreement, any agreement contemplated hereby between the parties to this Agreement and the transactions contemplated hereby between the parties to this Agreement does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under, (a) the Organizational Documents of Cosmos or any Cosmos Subsidiary or any JV Entity, (b) any agreement, document or instrument to which Cosmos, any Cosmos Subsidiary or any JV Entity is a party or by which Cosmos, any Cosmos Subsidiary or any JV Entity is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on Cosmos, any Cosmos Subsidiary or any JV Entity (or their assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Cosmos Material Adverse Effect.

Section 4.07         Solvency. Cosmos has been and will be solvent at all times prior to the Merger. No bankruptcy or similar insolvency proceeding has been filed or is currently contemplated by Cosmos, any Cosmos Subsidiary or any JV Entity.

Section 4.08         Litigation. As of the date hereof, there is no action, suit or proceeding pending or, to Cosmos’s Knowledge, threatened against Cosmos, any Cosmos Subsidiary or any JV Entity which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a Cosmos Material Adverse Effect. As of the date hereof, there is no action, suit or proceeding pending or, to Cosmos’s Knowledge, threatened against Cosmos, any Cosmos Subsidiary or any JV Entity which challenges or impairs the ability of Cosmos to execute or deliver, or perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

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Section 4.09         Licenses and Permits    To Cosmos’s Knowledge, all notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management, leasing and operation of the Properties have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and (to the extent required in connection with the transactions contemplated by this Agreement) are assignable to the Company, except in each case for items that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect. To Cosmos’s Knowledge, neither Cosmos, any Cosmos Subsidiary, any JV Entity nor any third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect, nor has any of them received within the past one year any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of them, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority and that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect.

Section 4.10         The Properties.

(a)         The Properties are owned directly, in fee simple, by the Persons set forth on Section 4.10 of the Disclosure Letter or their direct or indirect wholly owned subsidiaries. Each Cosmos Subsidiary or JV Entity listed as owning a Property on Section 4.10 of the Disclosure Letter is insured under a policy of title insurance as the owner of the fee simple estate (or, in the case of certain Properties, the leasehold estate) of such Property, in each case free and clear of all Liens except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property. Prior to the effective time of the transactions contemplated in this Agreement, no Cosmos Subsidiary or JV Entity shall take or omit to take any action to cause any Lien to attach to any Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property.

(b)         Except for matters that would not, individually or in the aggregate, have a Cosmos Material Adverse Effect, (i) no Cosmos Subsidiary, JV Entity, nor any other party to any agreement affecting any Property to which Cosmos, a Cosmos Subsidiary or JV Entity is a party (other than a Lease (as such term is hereinafter defined) for space within such Property), has given or received any notice of default with respect to any term or condition of any such agreement, including, without limitation, any ground lease, (ii) no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of any Cosmos Subsidiary or JV Entity, except for Permitted Liens, and (iii) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space leases) are valid and binding and in full force and effect. No Cosmos Subsidiary or JV Entity has granted an option or right of first refusal or offer pursuant to the leases with respect to the sale of any Property.

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(c)         As presently conducted, none of the operation of the buildings, fixtures and other improvements comprising a part of the Properties is in violation of any applicable building code, zoning ordinance or other law or regulation, except for such violations that would not, individually or in the aggregate, have a Cosmos Material Adverse Effect. Neither Cosmos nor any Cosmos Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened proceedings for the rezoning of any Property or portion thereof except for such notices or proceedings that would not, individually, or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect.

(d)         Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect, (i) to Cosmos’s Knowledge, neither Cosmos, any Cosmos Subsidiary nor any JV Entity, nor any other party to any Lease, has given or received any notice of default with respect to any term or condition of any such Lease, (ii) to Cosmos’s Knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of Cosmos, the Cosmos’s Subsidiaries or the JV Entities, except for Permitted Liens, and (iii) each of the leases (and all amendments thereto or modifications thereof) to which any Cosmos, any Cosmos Subsidiary or any JV Entity is a party or by which Cosmos, any Cosmos Subsidiary or any JV Entity or any Property is bound or subject (collectively, the “Leases”) is and will be valid and binding and in full force and effect.

(e)         Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect, each of the Leases to which Cosmos, any Cosmos Subsidiary or any JV Entity is a party or by which Cosmos, any Cosmos Subsidiary, any JV Entity or any Property is bound or subject, is in full force and effect, and constitutes the legal, valid and binding obligation of Cosmos or the applicable Cosmos Subsidiary or JV Entity, and to Cosmos’s Knowledge, each other party thereto, enforceable against each Cosmos Subsidiary or JV Entity, and to Cosmos’s Knowledge, each other party thereto, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(f)         To Cosmos’s Knowledge, except as previously disclosed to the Company, no tenant under any such Lease is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings, except for matters that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect.

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Section 4.11         Insurance. Cosmos or the applicable Cosmos Subsidiary or JV Entity has in place the public liability, casualty and other insurance coverage with respect to each Property as Cosmos reasonably deems necessary. Each of the insurance policies with respect to the Properties is in full force and effect in all material respects and none of Cosmos or the applicable Cosmos Subsidiary or JV Entity is in default (in any material respect) under any such policies.

Section 4.12         Environmental Matters. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Cosmos Material Adverse Effect, (a) Cosmos, the Cosmos Subsidiaries and the JV Entities are in compliance with all applicable Environmental Laws, (b) neither Cosmos, any Cosmos Subsidiary nor any JV Entity has received within the past three years any written notice from any Governmental Authority or third party alleging that Cosmos, any Cosmos Subsidiary, any JV Entity or any Property is not in compliance with applicable Environmental Laws , and (c)  there has not been a release of a hazardous substance on any Property that would require investigation or remediation under applicable Environmental Laws. The representations and warranties contained in this Section 4.12 constitute the sole and exclusive representations and warranties made by Cosmos concerning environmental matters.

Section 4.13         Holding Period. Cosmos acknowledges that it has been advised, and it has advised the Stockholder, that the Company Shares issued pursuant to this Agreement are “restricted securities” (unless registered in accordance with applicable U.S. securities Laws) under applicable U.S. federal securities Laws and may be disposed of only pursuant to an effective registration statement or an exemption therefrom and Cosmos understands that, and has informed the Stockholder that, the Company has no obligation or intention to register any of the Company Shares, except pursuant to the Registration Rights Agreement. Accordingly, the Stockholder may have to bear indefinitely, the economic risks of an investment in such Company Shares and a notation shall be made in the appropriate records of the Company indicating that the Company Shares are subject to restrictions on transfer.

Section 4.14         Investments. The Stockholder acknowledges that the Company intends the offer and issuance of Company Shares to the Stockholder as Merger Consideration to be exempt from registration under the Securities Act and applicable state securities laws and that the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties contained herein. In furtherance thereof, the Stockholder represents and warrants to the Company as follows:

(a)         the Stockholder is an Accredited Investor; and

(b)         the Stockholder is acquiring the Merger Consideration solely for her own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof in violation of the securities Laws.

Section 4.15         Broker. None of Cosmos, any Cosmos Subsidiary, any JV Entity or any of their respective managers, members, partners, officers directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Company, the Operating Partnership or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Agreement.

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Section 4.16         Eminent Domain. There is no existing or, to Cosmos’s Knowledge threatened, in writing condemnation, eminent domain or similar proceeding that would affect any of the Properties. Neither Cosmos nor any Cosmos Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened condemnation, eminent domain or similar proceeding that would affect any of the Properties.

Section 4.17         Assets and Liabilities.

(a)         Section 4.17 of the Disclosure Letter accurately sets forth, in all material respects, as of June 30, 2014 and September 30, 2014, (a) all outstanding indebtedness of Cosmos and the Cosmos Subsidiaries and each JV Entity, (b) all interest rate swap liabilities of such entities and (c) the net amount of all other tangible assets and liabilities of such entities (other than deferred tax liabilities, if any), which consists of cash, cash equivalents, accounts receivable and accounts payable.

(b)         Except for distributions set forth on Section 4.17 of the Disclosure Letter (“Permitted Distributions”) or as contemplated by this Agreement or as otherwise set forth on Section 4.17 of the Disclosure Letter (“Permitted Activities”), since September 30, 2014, Cosmos has not (i) made any distributions or (ii) entered into any transactions with an Affiliate other than on an arm’s-length basis.

(c)         Section 4.17 of the Disclosure Letter accurately sets forth all contributions made to Cosmos by the Stockholder since September 30, 2014.

(d)         Cosmos, together with Cosmos Subsidiaries that are wholly owned, directly or indirectly by Cosmos, owns the interests in Paramount Group Real Estate Fund V (CIP), L.P. (“Fund V CIP”) as set forth on Section 4.17 of the Disclosure Letter.

Section 4.18         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article IV, Cosmos shall not be deemed to have made any other representation or warranty in connection with this Agreement or the transactions contemplated hereby or thereby.

Article V

INDEMNIFICATION

Section 5.01         Company Indemnification.

(a)         Subject to the indemnification limitations set forth in this Agreement, from and after the Merger Closing Date, the Company shall indemnify and hold harmless the Stockholder and her employees, partners, members, agents, representatives and Affiliates (each of which is a “Cosmos Indemnified Party”) from and against any and all charges, complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “Losses”) in excess of the greater of (i) 4.5% of the Company Cap or (ii) $250,000, in each case in the aggregate, arising out of or relating to, asserted against, imposed upon or incurred by a Cosmos Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Company contained in this Agreement or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Company pursuant to this Agreement; provided, however, that the Company shall not have any obligation under this Section 5.01 to indemnify any Cosmos Indemnified Party against any Losses to the extent that such Losses arise by virtue of Cosmos’s breach of this Agreement, gross negligence, willful misconduct or fraud.

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(b)         Any indemnification payment made by the Company to the Stockholder pursuant to this ‎Agreement shall be made to the Stockholder in shares of Company Common Stock, the number of which shall equal the dollar value of the indemnification payment divided by the price of a share of Company Common Stock as of the close of market on the date of such indemnification payment.

Section 5.02         Cosmos Indemnification. Subject to the indemnification limitations set forth in this Agreement, from and after the Merger Closing Date, the Indemnity Holdback Amount shall be used to indemnify and hold harmless the Company, the Operating Partnership and each of their respective directors, officers, employees, agents, representatives and Affiliates (each of which is a “Company Indemnified Party”) from and against any and all Losses in excess of the greater of (i) 4.5% of the Indemnity Holdback Amount or (ii) $250,000, in each case in the aggregate, arising out of or relating to, asserted against, imposed upon or incurred by such Company Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of Cosmos or in any schedule, exhibit, certificate or affidavit or any other document delivered by Cosmos pursuant to this Agreement; provided, however, that Cosmos shall not have any obligation under this Section 5.02 to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Company’s breach of this Agreement, gross negligence, willful misconduct or fraud; provided further, however, that, to the extent such Losses relate to breach of a representation, warranty or covenant of Cosmos regarding a Person or the assets and liabilities of a Person that the Company or the Operating Partnership has or acquires an interest in from a Person other than Cosmos, the indemnification pursuant to this Section 5.02 shall be limited to the portion of such Losses attributable to the interest acquired from Cosmos pursuant to this Agreement. The Stockholder hereby grants to the Company a security interest in the Company Shares held as the Indemnity Holdback Amount to secure the obligations set forth in this Section 5.02. In addition, to the extent that any OP Units that Cosmos (or the Surviving Entity or its successors in interest) receive, or would otherwise be entitled to receive, in connection with the Formation Transactions with respect to the interests in Fund V CIP held directly or indirectly by Cosmos at the Effective Time are paid to the Company or the Operating Partnership in order to satisfy indemnification obligations to which such OP Units are subject in connection with the Company’s or Operating Partnership’s acquisition of the assets of Fund V CIP in the Formation Transactions, the Company or the Operating Partnership will be entitled to receive a number of shares of Company Shares from the Indemnity Holdback Amount equal to such number of OP Units paid to the Company or the Operating Partnership in order to indemnify the Company or the Operating Partnership for the loss of such OP Units.

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Section 5.03         Notice of Claims    At the time when any Cosmos Indemnified Party or Company Indemnified Party, as applicable, (as applicable, an “Indemnified Party”) learns of any potential claim (a “Claim”) under this Article V that is asserted against the Indemnified Party that is subject to indemnification by the Company or in respect of Cosmos from the Indemnity Holdback Amount, as applicable, under this Article V (as applicable, the “Indemnifying Party”), such Indemnified Party will promptly give written notice (a “Claim Notice”) to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative); provided that failure to do so shall not prevent recovery under this Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by Law, the Indemnified Party shall deliver to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to a Third Party Claim (defined below), and failure to do so shall prevent recovery under this Agreement to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.

Section 5.04         Third Party Claims. The Indemnifying Party (through the Stockholder’s Representative in the event the Indemnified Party is a Company Indemnified Party) shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties (“Third Party Claims”), through counsel chosen by the Indemnifying Party (or in the case of the Company Indemnified Parties, by the Stockholder’s Representative), if it gives written notice of its intention to do so to the Indemnified Parties within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their expense provided, further, that if any such Third Party Claim relates to Taxes of Cosmos, any Cosmos Subsidiary or any JV Entity or seeks non-monetary damages or asserts damages in excess of the Indemnity Holdback Amount against a Company Indemnified Party, then, notwithstanding anything in this Agreement to the contrary, the Company (or a Subsidiary of the Company) shall have the right to control any such Third Party Claim. Without limiting the foregoing, in the event that the Indemnifying Party exercises the right to undertake any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party (unless prohibited by Law), at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the one hand, or the Indemnifying Party (or in the case of the Company Indemnified Parties, the Stockholder’s Representative), on the other hand, without the other’s consent (which shall not be unreasonably withheld or delayed) unless (a) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party and (b) each Indemnified Party that is party to such claim is released from all liability with respect to such claim provided that the Stockholder’s Representative shall be deemed to have consented to any proposed compromise or settlement to which he has not objected to by written notice within 30 days after notice of such proposed compromise or settlement was provided by a Company Indemnified Party.

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Section 5.05         Survival of Representations and Warranties. All representations and warranties of Cosmos in Article IV and the Company in Article III, respectively, contained in this Agreement shall survive after the Merger Closing until the first anniversary of the Merger Closing Date (the “Expiration Date”). If written notice of a Claim in accordance with the provisions of Section 5.03 has been given prior to the Expiration Date, then the relevant representation and warranty shall survive, but only with respect to such specific Claim, until such Claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

Section 5.06         Establishment of Indemnity Holdback Escrow. On the Merger Closing Date, the Company will deposit the Indemnity Holdback Amount with the Escrow Agent in accordance with the terms and conditions of the Escrow Agreement. The Company agrees that the Company Shares that comprise the Indemnity Holdback Amount may be released, or collateral may be substituted for such Company Shares, in accordance with the terms of the Escrow Agreement.

Section 5.07         Exclusive Remedy.

(a)         Except as set forth in Sections 2.05 and 6.04, (i) the sole and exclusive remedy for Company Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with this Agreement and any of the agreements, documents or instruments executed and delivered in connection herewith and any of the transactions contemplated hereby shall be indemnification pursuant to the provisions of this Article V and (ii) neither Cosmos nor the Stockholder shall be liable or obligated to make payments under this Agreement to the extent such payments in the aggregate exceed the Indemnity Holdback Amount.

(b)         The sole and exclusive remedy for Cosmos Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with this Agreement and any of the agreements, documents or instruments executed and delivered in connection herewith and any of the transactions contemplated hereby shall be indemnification pursuant to the provisions of this Article V and the Company shall not be liable or obligated to make payments under this Agreement to the extent such payments in the aggregate exceed the dollar amount obtained by multiplying the number of Company Shares included in the Indemnity Holdback Amount by the Price to the Public (the “Company Cap”).

Section 5.08         Tax Treatment. All indemnity payments made under this Agreement shall be treated as adjustments to the consideration paid hereunder for U.S. federal income tax purposes, unless otherwise required by applicable Laws.

Article VI

COVENANTS; ADDITIONAL AGREEMENTS

Section 6.01         Certain Covenants of Cosmos. From the date hereof through the Merger Closing, except as otherwise provided for, or as contemplated by this Agreement or the Formation Transaction Documentation, Cosmos shall and shall cause the Cosmos Subsidiaries and JV Entities, to the extent Cosmos or the Cosmos Subsidiaries control such JV Entities, to use commercially reasonable efforts to conduct their business and operate and maintain the Properties in the ordinary course, consistent with past practices. In addition, Cosmos:

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(a)       will not make any distributions, other than Permitted Distributions;

(b)       except for Permitted Activities, will not enter into any transactions with an Affiliate other than on an arm’s-length basis;

(c)       will not sell, transfer or otherwise dispose of its Property Interests; and

(d)       will not mortgage, pledge, hypothecate, encumber (or permit to become encumbered) all or any portion of its Property Interests, except for Permitted Liens.

Section 6.02        Stockholder’s Representative. Cosmos and the Stockholder hereby appoint Dr. Thomas Finne as the representative for the Stockholder (the “Stockholder’s Representative”) and the Stockholder’s Representative shall have the authority to take the actions provided herein and receive notices on behalf of the Stockholder subsequent to the Merger Closing; provided that the Stockholder shall have the right, at any time, to remove and replace the Stockholder’s Representative by written notice to the Company executed by the Stockholder and delivered to the Company.

Section 6.03         Tax Covenants.

(a)         Each party hereto (i) shall cause all Tax Returns relating to the Merger to be filed on the basis of treating the Merger as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) shall not take any position on any Tax Return, or take any other reporting position, that is inconsistent with such treatment, unless otherwise required by applicable Laws.

(b)         Cosmos shall provide the Company with such reasonable cooperation and information relating to Cosmos, any Cosmos Subsidiary and any JV Entity as the Company reasonably requires in (i) filing any Tax Return, amended Tax Return or claim for Tax refund, (ii) determining any liability for Taxes or a right to a Tax refund, (iii) conducting or defending any proceeding in respect of Taxes or (iv) performing Tax diligence, including with respect to the impact of the transactions contemplated herein on the Company’s qualification as a REIT for U.S. federal income Tax purposes and the qualification of the Merger as a reorganization under Section 368(a) of the Code.

(c)         The Company shall be responsible for the prosecution of any claim or audit instituted after the Merger Closing Date with respect to Taxes of Cosmos, any Cosmos Subsidiary or any JV Entity attributable to any taxable period, or portion thereof, ending on or before the Merger Closing Date.

(d)         The Company shall (i) cause to be timely paid any New York City and New York State real property transfer taxes payable by the Stockholder as a result of, or in connection with, the Merger (collectively, the “New York Transfer Taxes”); provided, that the parties hereto acknowledge and agree that such amount of New York Transfer Taxes payable shall reflect the Company’s status as a REIT; and (ii) timely and properly file, with the Stockholder’s cooperation, all Tax Returns with respect to such New York Transfer Taxes.

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Section 6.04         Liability for Transfer Taxes. The Stockholder agrees to indemnify the Company for any Incremental Transfer Taxes incurred as a result of any direct or indirect transfers of the Company Shares issued as Merger Consideration or interests therein within two years after the IPO Closing Date, provided that such Company Shares shall be the Company’s sole recourse with respect to such indemnification obligation. The Stockholder hereby grants a security interest in 50% of the Company Shares to be received by the Stockholder as Merger Consideration to the Company and hereby irrevocably appoints the Company, and any of its agents, officers, or employees as its attorney-in fact, which shall be deemed coupled with an interest, with full power to prepare, execute and deliver any documents, instruments and agreements as may be appropriate to perfect and continue such security interest in favor of the Company. The security interest granted pursuant to this Section 6.04 shall attach to Company Shares that are not included in the Indemnity Holdback Amount. The Company agrees that the security interest in the Company Shares may be released, or collateral may be substituted for such Company Shares, in accordance with the terms of the Escrow Agreement.

Section 6.05         Commercially Reasonable Efforts By the Company and Cosmos. Each of the Company and Cosmos shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Laws or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Agreement, and (b) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits or authorizations.

Article VII

GENERAL PROVISIONS

Section 7.01         Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given when (a) delivered personally, (b) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid, (c) one (1) Business Day after being sent by a nationally recognized overnight courier or (d) transmitted by facsimile if confirmed within 24 hours thereafter by a signed original sent in the manner provided in clause (a), (b) or (c) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such party):

Address of the Company: Paramount Group, Inc.
1633 Broadway, Suite 1801
New York, New York 10019
Facsimile: (212) 237-3197
Attn:  General Counsel

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Address of Cosmos:	c/o Paramount Group, Inc. 1633 Broadway, Suite 1801 New York, New York 10019 Facsimile: (212) 237-3197 Attn:  General Counsel
Address of the Stockholder and the Stockholder’s Representative:	c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG Werner-Otto-Straße 1-7 D-22179 Hamburg, Germany Attention: Thomas Armbrust Fax: +49-40-6461-2960

Section 7.02        Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

(a)       “Accredited Investor” means an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act.

(b)       “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(c)       “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.

(d)       “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.

(e)       “Company’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(f)        “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Company and the Operating Partnership and their Subsidiaries, taken as a whole, after giving effect to the Formation Transactions and the IPO.

(g)       “Cosmos Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of Cosmos and its Subsidiaries, taken as a whole, including such entities’ direct and indirect interests in the JV Entities.

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(h)       “Cosmos’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(i)        “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.

(j)        “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(k)       “Incremental Transfer Taxes” means any additional transfer taxes attributable to the transactions contemplated by this Agreement and the other Formation Transactions as a result of the failure of any such transaction to qualify as a "real estate investment trust transfer" under New York Tax Law section 1402 or under New York City Administrative Code section 11-2102 due to direct or indirect transfers of the Company Shares issued as Merger Consideration occurring within two years after the IPO Closing Date.

(l)        “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority.

(m)      “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.

(n)      “OP Units” means the limited partnership interests of Paramount Group Operating Partnership LP.

(o)      “Organizational Documents” means with respect to any entity, the certificate of formation, limited liability company or operating agreement, certificate of incorporation, bylaws, certificate of limited partnership agreement and any other governing agreement, as applicable.

(p)      “Permitted Liens” means (i) Liens for unpaid Taxes (other than statutory liens for Taxes not yet due and payable); (ii) zoning Laws generally applicable to the districts in which the Properties are located; (iii) easements for public utilities, encroachments, rights of access and/or other non-monetary matters that do not materially interfere with the use of the Properties; (iv) Liens securing Permitted Activities; (v) Liens arising in the ordinary course of business; (vii) Liens securing indebtedness outstanding as of September 30, 2014 or incurred on an arms’ length basis thereafter and (viii) any exceptions contained in the title policies relating to the Properties as of the Merger Closing Date.

(q)      “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

(r)       “Price to the Public” means the public offering price of a share of Company Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the Registration Statement.

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(s)        “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(t)        “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii) (A) 50% or more of the voting power of the voting capital stock or other equity interests, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.

(u)       “Tax” (and, with its correlative meaning, “Taxes”) means any and all taxes, including any interest, penalties, or other additions to tax that may become payable in respect thereof, which taxes shall include, without limiting the generality of the foregoing, all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, unclaimed property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

(v)       “Tax Return” means any return, statement, schedule, declaration, claim for refund, report, document or form filed or required to be filed with respect to Taxes, including any amendment, attachment and supplement thereof.

Section 7.03         Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. All counterparts shall collectively constitute one agreement (or amendment, as applicable). The exchange of counterparts of this Agreement among the parties by means of facsimile transmission or by electronic transmission (pdf) which shall contain authentic reproductions shall constitute a valid exchange of this Agreement and shall be binding upon the parties hereto.

Section 7.04         Entire Agreement; Third-Party Beneficiaries. This Agreement and the Escrow Agreement, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties hereto.

Section 7.05         Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

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Section 7.06         Assignment. This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that this Agreement may not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Company may assign its rights and obligations hereunder to an Affiliate.

Section 7.07         Jurisdiction. The parties hereto hereby (a) submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York City, New York, with respect to any dispute arising out of this Agreement or any transaction contemplated hereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.08         Dispute Resolution. The parties intend that this Section 7.08 will be valid, binding, enforceable, exclusive and irrevocable and that it shall survive any termination of this Agreement.

(a)         Upon any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 7.08(c) below without regard to any such 10-day negotiation period.

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(b)         Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 7.08(a) above shall be submitted to final and binding arbitration in New York before one neutral and impartial arbitrator, in accordance with the Laws of the State of New York for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days following a demand for arbitration, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.

(c)         Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

(d)         The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.

Section 7.09         Severability. Each provision of this Agreement will be interpreted so as to be effective and valid under applicable Laws, but if any provision is held invalid, illegal or unenforceable under applicable Laws in any jurisdiction, then such invalidity, illegality or unenforceability will not affect any other provision, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein.

Section 7.10         Rules of Construction.

(a)         The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

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(b)         The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including fin the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

Section 7.11         Equitable Remedies. The parties agree that irreparable damage would occur to the Company, on the one hand, and Cosmos, on the other hand, in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Company, on the one hand, and Cosmos, on the other hand, shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the other party and to enforce specifically the terms and provisions hereof in any federal or state court located in New York, this being in addition to any other remedy to which the parties are entitled under this Agreement or otherwise at law or in equity.

Section 7.12         Time of the Essence. Time is of the essence with respect to all obligations under this Agreement.

Section 7.13         Descriptive Headings. The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

Section 7.14         No Personal Liability Conferred. This Agreement shall not create or permit any personal liability or obligation on the part of any officer, director, partner, employee or shareholder of the Company or Cosmos.

Section 7.15         Amendments. This Agreement may be amended by appropriate instrument, without the consent of Cosmos, at any time prior to the Merger Closing Date; provided, that no such amendment, modification or supplement shall be made that alters the amount or changes the form of the consideration to be delivered to Cosmos.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective duly authorized officers or representatives, all as of the date first written above.

COSMOS RENTAL INVESTMENTS, INC.,
a Delaware corporation
By:	/s/ Gage Johnson
	Name: Gage Johnson
	Title: Special Agent
PARAMOUNT GROUP, INC.,
a Maryland corporation
By:	/s/ Albert Behler
	Name: Albert Behler
	Title: President and CEO

[Signature Page to Cosmos Merger Agreement]

STOCKHOLDER
By:	/s/ Katharina Otto-Bernstein
Name:  Katharina Otto-Bernstein

[Signature Page to Cosmos Merger Agreement]

EXHIBIT A

Properties

[See attached]

A-1

EXHIBIT B

Escrow Agreement

[See attached]

B-2

EXHIBIT C

Lock-up Agreement

[See attached]

C-1

EXHIBIT D

Form of Letter of Transmittal

[See attached]

F-1

SCHEDULE 1.07

Merger Consideration

Cosmos

Stockholder	Merger Consideration	Indemnity Holdback Amount
Katharina Otto-Bernstein	1,898,305 Company Shares	28,474 Company Shares

Schedule 1.07

EX-99.3

Exhibit 3

CONTRIBUTION AGREEMENT

by and among

MARATHON Rental Investments, Inc.,

paramount group, inc.,

and

The Stockholder

of

MARATHON rental investments, inc.

Dated as of November 6, 2014

TABLE OF CONTENTS

		Page
Article I CONTRIBUTION; CONVERSION; MERGER		2
Section 1.01	Contribution Transaction; Assignment and Assumption	2
Section 1.02	Consideration	3
Section 1.03	Further Action	3
Section 1.04	Transaction Costs	3
Section 1.05	Prorations	3
Section 1.06	Tax Treatment of Contribution, Conversion and Merger	3
Article II CLOSING		4
Section 2.01	Conditions Precedent	4
Section 2.02	Time and Place	6
Section 2.03	Closing Deliveries	6
Section 2.04	Transfer Costs	7
Section 2.05	Term of the Agreement	7
Section 2.06	Effect of Termination	7
Section 2.07	Tax Withholding	7
Section 2.08	Merger	8
Article III REPRESENTATIONS AND WARRANTIES  OF THE COMPANY		8
Section 3.01	Organization; Authority	8
Section 3.02	Due Authorization	8
Section 3.03	Consents and Approvals	9
Section 3.04	Tax Matters	9
Section 3.05	No Violation	9
Section 3.06	Validity of Company Shares	9
Section 3.07	Litigation	9
Section 3.08	Limited Activities	9
Section 3.09	Broker	10
Section 3.10	No Other Representations or Warranties	10
Article IV REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR		10
Section 4.01	Organization; Authority	10
Section 4.02	Due Authorization	11
Section 4.03	Ownership of Contributed Interests; Capitalization	11
Section 4.04	Consents and Approvals	12
Section 4.05	Taxes	12
Section 4.06	No Violation	13
Section 4.07	Solvency	13
Section 4.08	Litigation	14
Section 4.09	Licenses and Permits	14
Section 4.10	Properties	14
Section 4.11	Insurance	16
Section 4.12	Environmental Matters	16

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Section 4.13	Investment	16
Section 4.14	Broker	17
Section 4.15	Eminent Domain	17
Section 4.16	Assets and Liabilities	17
Section 4.17	No Other Representations or Warranties	17
Article V INDEMNIFICATION		17
Section 5.01	Company Indemnification	17
Section 5.02	Stockholder Indemnification	18
Section 5.03	Notice of Claims	18
Section 5.04	Third Party Claims	19
Section 5.05	Survival of Representations and Warranties	19
Section 5.06	Establishment of Indemnity Holdback Escrow	20
Section 5.07	Exclusive Remedy	20
Section 5.08	Tax Treatment	20
Article VI COVENANTS AND OTHER AGREEMENTS		20
Section 6.01	Covenants of the Contributor	20
Section 6.02	Stockholder’s Representative	21
Section 6.03	Tax Covenants	21
Section 6.04	Tax Protection Provisions	22
Section 6.05	Liability for Transfer Taxes	22
Section 6.06	Commercially Reasonable Efforts By the Company and the Contributor	22
Article VII GENERAL PROVISIONS		23
Section 7.01	Notices	23
Section 7.02	Definitions	23
Section 7.03	Counterparts	26
Section 7.04	Entire Agreement; Third-Party Beneficiaries	26
Section 7.05	Governing Law	26
Section 7.06	Assignment	26
Section 7.07	Jurisdiction	26
Section 7.08	Dispute Resolution	27
Section 7.09	Severability	28
Section 7.10	Rules of Construction	28
Section 7.11	Equitable Remedies	28
Section 7.12	Time of the Essence	29
Section 7.13	Descriptive Headings	29
Section 7.14	No Personal Liability Conferred	29
Section 7.15	Amendments	29

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EXHIBITS
Exhibit A	List of Properties
Exhibit B	Certificate of Conversion
Exhibit C	Certificate of Formation
Exhibit D	Agreement and Plan of Merger
Exhibit E	Escrow Agreement
Exhibit F	Lock-up Agreement
Exhibit G	Assignment and Assumption Agreement
SCHEDULES
Schedule 1.01	Excluded Assets
Schedule 1.02	Consideration

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DEFINED TERMS

Affiliate	Section 7.02
Assignment and Assumption Agreement	Section 1.01
Business Day	Section 7.02
Certificate of Conversion	Recitals
Certificate of Formation	Recitals
Claim	Section 5.03
Claim Notice	Section 5.03
Closing Documents	Section 2.03
Code	Section 7.02
Company	Introduction
Company Cap	Section 5.07
Company Common Stock	Recitals
Company Indemnified Party	Section 5.02
Company’s Knowledge	Section 7.02
Company Material Adverse Effect	Section 7.02
Company Shares	Recitals
Contributed Interests	Recitals
Contribution	Recitals
Contribution Agreement	Introduction
Contribution Closing	Section 2.02
Contribution Closing Date	Section 2.02
Contributor	Introduction
Contributor Disclosure Letter	Article IV
Contributor Indemnified Party	Section 5.01
Contributor Material Adverse Effect	Section 7.02
Contributor Subsidiary	Section 4.01
Contributor’s Knowledge	Section 7.02
Conversion	Recitals
Deductible	Section 5.01
Dispute	Section 7.08
DSOS	Recitals
Environmental Laws	Section 7.02
Equity Holder	Recitals
Escrow Agreement	Recitals
Excluded Assets	Section 1.01
Expiration Date	Section 5.05
Formation Transactions	Recitals
Governmental Authority	Section 7.02
Incremental Transfer Taxes	Section 7.02
Indemnified Party	Section 5.03
Indemnifying Party	Section 5.03
Indemnity Holdback Amount	Recitals
IPO	Recitals
IPO Closing	Section 2.02

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IPO Closing Date	Section 7.02
JV Entities	Section 4.01
Laws	Section 7.02
Leases	Section 4.10
Liens	Section 7.02
Lock-up Agreement	Recitals
Losses	Section 5.01
Marathon	Introduction
Marathon LLC	Introduction
Merger	Recitals
Merger Agreement	Recitals
New York Transfer Taxes	Section 6.03
Operating Partnership	Recitals
Organizational Documents	Section 7.02
Outside Date	Section 2.05
Permitted Activities	Section 4.16
Permitted Distribution	Section 4.16
Permitted Liens	Section 7.02
Person	Section 7.02
PGI	Section 6.04
PGI Merger Agreement	Section 6.04
Price to the Public	Section 7.02
Properties	Recitals
Property	Recitals
Property Interests	Recitals
Registration Rights Agreement	Recitals
Registration Statement	Section 7.02
REIT	Recitals
SEC	Section 2.01
Securities Act	Section 7.02
Stockholder’s Representative	Section 6.02
Subsidiary	Section 7.02
Surviving Entity	Recitals
Tax	Section 7.02
Tax Return	Section 7.02
Third Party Claims	Section 5.04
Transaction Agreements	Recitals

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CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (including all exhibits and schedules, this “Contribution Agreement”) is made and entered into as of November 6, 2014, by and between PARAMOUNT GROUP, INC., a Maryland corporation (the “Company”), MARATHON RENTAL INVESTMENTS, INC., a Delaware corporation (the “Contributor” or “Marathon”) and the stockholder whose name appears on the signature page hereto (the “Stockholder”). Unless otherwise specifically stated herein or the context otherwise requires, the terms “Contributor” and “Marathon” refer to Marathon and its Subsidiaries with respect to the period prior to the Conversion and to Marathon Rental Investments LLC, a Delaware limited liability company (“Marathon LLC”), and its Subsidiaries with respect to the period from and after the Conversion. After the Conversion, all references to the term “Stockholder” shall mean the “Equity Holder.” Capitalized terms used and not defined in the body of this Contribution Agreement shall have the meanings set forth in Section 7.02 hereto.

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of the common stock, par value $0.01 per share (“Company Common Stock”), of the Company, which will operate as a self-administered and self-managed real estate investment trust (“REIT”) within the meaning of Sections 856 through 860 of the Code;

WHEREAS, in connection with the IPO, the Company, which is the sole general partner of Paramount Group Operating Partnership LP (the “Operating Partnership”), desires to engage in a series of transactions through which the Company and the Operating Partnership will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (collectively, the “Formation Transactions”);

WHEREAS, the Contributor owns, directly or indirectly, interests (the “Property Interests”) in the properties set forth on Exhibit A hereto, under the heading “Marathon” (each, a “Property” and together the “Properties”);

WHEREAS, as part of the Formation Transactions, pursuant to this Contribution Agreement, the Contributor shall contribute (the “Contribution”) to the Company all of its assets (other than Excluded Assets) and liabilities (the “Contributed Interests”) and the Company shall acquire from the Contributor all of the Contributor’s right, title and interest in the Contributed Interests in exchange for shares of Company Common Stock;

WHEREAS, the board of directors of the Contributor and the Stockholder have approved, subject to, and following the Contribution Closing, the conversion of the Contributor from a Delaware corporation to a Delaware limited liability company (the “Conversion”);

WHEREAS, following the Contribution Closing, the Company on behalf of the Contributor will file a Certificate of Conversion with the Secretary of State of the State of Delaware (the “DSOS”), a copy of which is attached hereto as Exhibit B (the “Certificate of Conversion”) and a Certificate of Formation, a copy of which is attached hereto as Exhibit C (the “Certificate of Formation”) in order to effectuate the Conversion;

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WHEREAS, following the effective time of the Conversion, pursuant to the Agreement and Plan of Merger attached hereto as Exhibit D (the “Merger Agreement” and together with this Contribution Agreement, the “Transaction Agreements”), Marathon LLC will merge with and into the Company (the “Merger”) with the Company as the surviving entity (sometimes referred to as the “Surviving Entity”) and in consideration thereof the Stockholder, which will be the sole equity holder of Marathon LLC (in such capacity, the “Equity Holder”), will receive shares of Company Common Stock (the “Company Shares”) in accordance with the terms and conditions set forth in the Merger Agreement;

WHEREAS, at the Merger Closing, the Stockholder acknowledges that the Company will deposit the number of Company Shares set forth on Schedule 1.07 of the Merger Agreement under the heading “Marathon LLC” as the Indemnity Holdback Amount, which represents approximately 1.5% of the Merger Consideration (collectively, the “Indemnity Holdback Amount”), into an Indemnity Holdback Escrow (as defined in the Escrow Agreement) pursuant to that certain Omnibus Distribution and Escrow Agent Agreement, a copy of which is attached hereto as Exhibit E (the “Escrow Agreement”) in order to provide for the exclusive remedy against the Stockholder (in its capacity as such) for any breaches of the Transaction Agreements by the Stockholder;

WHEREAS, concurrently with the execution of this Contribution Agreement, the Stockholder has executed and delivered a lock-up agreement to the underwriters of the IPO, a copy of which is attached as Exhibit F hereto (the “Lock-up Agreement”);

WHEREAS, concurrently with the execution of this Contribution Agreement, the Company has entered into a registration rights agreement with the Stockholder (the “Registration Rights Agreement”); and

WHEREAS, prior to or concurrently with the execution of this Contribution Agreement, the Company or the Operating Partnership, as the case may be, together with the applicable counterparties have entered into the Formation Transaction Documentation.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Contribution Agreement, the receipt and sufficiency of which is hereby acknowledged and agreed, the parties hereto, intending to be legally bound hereby, agree as follows:

Article I

CONTRIBUTION; CONVERSION; MERGER

Section 1.01         Contribution Transaction; Assignment and Assumption.

(a)          At the Closing and subject to the terms and conditions contained in this Contribution Agreement, the Contributor shall contribute, assign, set over, deliver and transfer to the Company absolutely and unconditionally and free and clear of all Liens (other than Permitted Liens), all of its right, title and interest in and to the Contributed Interests, including all rights to indemnification in favor of the Contributor under the agreements pursuant to which the Contributor acquired the Contributed Interests transferred pursuant to this Contribution Agreement. The contribution of the Contributed Interests shall be evidenced by the execution and delivery of an Assignment and Assumption Agreement in substantially the form of Exhibit G attached hereto and incorporated herein by reference (the “Assignment and Assumption Agreement”).

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(b)          Notwithstanding anything in Section 1.01(a) to the contrary, the Contributor shall not contribute, assign, set over, deliver or transfer any of Contributor’s right, title and interest to any assets of the Contributor set forth in Schedule 1.01 under the heading “Marathon” (“Excluded Assets”).

Section 1.02         Consideration. At the Contribution Closing, subject to the terms and conditions in this Contribution Agreement, in exchange for the transfer of the Contributed Interests, the Company shall issue to the Contributor the number of Company Shares set forth on Schedule 1.02 under the heading “Marathon”. No fractional Company Shares shall be issued to the Contributor pursuant to this Agreement. If aggregating all Company Shares that the Contributor otherwise would be entitled to receive pursuant to this Agreement would require the issuance of a fractional Company Share, the Contributor shall instead be entitled to receive one full Company Share in lieu of such fractional Company Share.

Section 1.03         Further Action. If, at any time after the Contribution Closing, the Company shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of the Contributor acquired or to be acquired by the Company as a result of, or in connection with, the Contribution or otherwise to carry out this Contribution Agreement, the Company shall be authorized to execute and deliver, in the name and on behalf of the Contributor, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of the Contributor, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Company or otherwise to carry out this Contribution Agreement.

Section 1.04         Transaction Costs. Subject to Section 6.05, if the Contribution Closing occurs, the Company shall be solely responsible for all transaction costs and expenses of the Company and the Contributor that have not previously been paid in connection with this Contribution Agreement, which include, but are not limited to, lender consent fees, legal, accounting and consultant fees.

Section 1.05         Prorations. There shall be no prorations at the Contribution Closing for any income and expense items with respect to the Properties.

Section 1.06         Tax Treatment of Contribution, Conversion and Merger. It is intended that, for U.S. federal income tax purposes, that the Contribution, Conversion and Merger shall, taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Contribution Agreement and the Merger Agreement constitutes, and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3.

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Article II

CLOSING

Section 2.01         Conditions Precedent.

(a)          Condition to Each Party’s Obligations. The respective obligation of each party to effect the contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date is subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

(i)          Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the Securities and Exchange Commission (“SEC”) seeking a stop order. This condition may not be waived by any party.

(ii)         IPO Proceeds. The Company shall have received, or have the right to receive, substantially concurrently with the Contribution Closing and the Merger Closing, the proceeds from the IPO. This condition may not be waived by any party.

(iii)        Merger. The Company, the Contributor and the Stockholder will agree that, except for filings with the DSOS in order to effectuate the Conversion, any conditions to closing the Merger, other than effecting the Conversion, have been irrevocably satisfied or waived at or prior to the Contribution Closing. This condition may not be waived by any party.

(iv)        No Injunction. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated by the Transaction Agreements nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.

(b)           Conditions to Obligations of the Company. The obligation of the Company to effect the Contribution contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Company in whole or in part):

(i)          Representations and Warranties. (i) The representations and warranties of the Contributor set forth in Section 4.16 shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing, (ii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is qualified by materiality or Contributor Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (iii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is not qualified by materiality or Contributor Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Contributor Material Adverse Effect.

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(ii)         Performance by the Contributor. The Contributor shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Contributor and the Stockholder to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of the Contributor to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        FIRPTA Affidavit.         The Contributor shall have provided the Company with a properly executed FIRPTA certificate substantially in the form set forth in Treasury Regulation Section 1.1445-2(b)(2) providing that the Contributor is not a “foreign person” and the Stockholder shall have (A) provided the Company with a properly executed FIRPTA certificate in accordance substantially with the form set forth in Treasury Regulation Section 1.1445-2(d)(2) sufficient to avoid any withholding under Section 1445 of the Code or (B) provided cash (in such amount as determined by the Company in its reasonable discretion) to the Company sufficient to pay any applicable withholding under the Code.

(v)         Closing Documents.         The Contributor shall have executed and delivered to the Company the documents to which it is a party which are required to be delivered pursuant to Section 2.03.

(c)          Conditions to Obligations of the Contributor. The obligation of the Contributor to effect the Contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Contributor in whole or in part):

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(i)          Representations and Warranties. (i) Each representation and warranty of the Company contained in this Contribution Agreement that is qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (ii) each representation and warranty of the Company contained in this Contribution Agreement that is not qualified by materiality or Company Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Company Material Adverse Effect.

(ii)         Performance by the Company. The Company shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Company to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of any of the Company to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        Price to the Public. The Contributor shall have approved the Price to the Public.

(v)         Closing Documents. The Company shall have executed and delivered to the Contributor the documents required to be delivered pursuant to Section 2.03.

Section 2.02         Time and Place. Unless this Contribution Agreement shall have been terminated pursuant to Section 2.05, and subject to satisfaction or waiver of the conditions in Section 2.01, the closing of the transfer contemplated by Section 1.01 and the other transactions contemplated hereby (the “Contribution Closing” or the “Contribution Closing Date”) shall occur prior to the Conversion and the Conversion shall occur prior to the Merger Closing and concurrently with the closing of the IPO (the “IPO Closing”), or up to one (1) day prior to, but conditioned upon the subsequent occurrence of the Merger Closing and the IPO Closing. The Closing shall take place at the offices of Goodwin Procter llp, 620 Eighth Avenue, New York, NY 10018 or such other place as determined by the Company in its sole discretion. In connection with the foregoing, the parties hereto hereby agree that the specific order in which the Contribution Closing, the Merger Closing, the IPO Closing and the closing of the other transactions that are part of or related to the Formation Transactions occur shall be as determined by the Company, provided, however, that the Contribution Closing shall precede the Conversion, and the Conversion shall precede the Merger Closing.

Section 2.03         Closing Deliveries. On the Contribution Closing Date, each of the parties shall make, execute, acknowledge and deliver the legal documents and other items to which it is a party or for which it is otherwise responsible that are necessary to carry out the intention of this Contribution Agreement and the other transactions contemplated to take place in connection therewith (collectively, the “Closing Documents”). The Closing Documents and other items to be delivered at the Contribution Closing shall be the following:

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(a)          the Assignment and Assumption Agreement; and

(b)          an executed Certificate of Conversion and Certificate of Formation.

Section 2.04         Transfer Costs. Subject to Section 6.05, the Company shall pay any documentary transfer taxes, escrow charges, title charges and recording taxes or fees incurred by the Company or the Contributor in connection with the transactions contemplated hereby.

Section 2.05         Term of the Agreement. The Transaction Agreements shall terminate automatically if the transactions contemplated by the Transaction Agreements shall not have been consummated on or prior to March 31, 2015 (such date is hereinafter referred to as the “Outside Date”). In addition, the Transaction Agreements may be terminated before the Contribution Closing by a document signed by the Company and the Contributor.

Section 2.06         Effect of Termination. In the event of termination of the Transaction Agreements for any reason, all obligations on the part of the Company and the Contributor and the Stockholder under the Transaction Agreements shall terminate, except that the obligations set forth in Article VII shall survive, it being understood and agreed, however, for the avoidance of doubt, that if the Transaction Agreements are terminated because one or more of the conditions to the non-breaching party’s obligations under this Contribution Agreement are not satisfied by the Outside Date as a result of the other party’s material breach of a covenant, representation, warranty or other obligation under the Transaction Agreements, the non-breaching party’s right to pursue all legal remedies with respect to such breach will survive such termination unimpaired.

Section 2.07         Tax Withholding. The Company shall be entitled to deduct and withhold, or cause to be deducted and withheld, from the consideration payable (or deemed payable) as a result of the transactions contemplated by the Transaction Agreements, including the Indemnity Holdback Amount, to the Contributor, or the Stockholder, as applicable, such amounts as the Company is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. tax law (as determined by the Company in its reasonable discretion). To the extent that amounts are so deducted and withheld by the Company, such amounts shall be treated for all purposes of the Transaction Agreements as having been paid to the Contributor, or the Stockholder, as applicable. The Contributor or the Stockholder, as applicable, shall (A) to the extent requested by Marathon, contribute cash prior to the Contribution and Merger equal to (i) any withholding Taxes that would otherwise be required to be withheld by the Company in connection with the Contribution and/or Merger (taking into account any gross-up attributable to such amounts) and (ii) any withholding Taxes that Marathon failed to withhold with respect to distributions to the Stockholder prior to the Closing and (B) indemnify and hold harmless the Company for any withholding Taxes relating to the Company’s failure to withhold from the Contributor or the Stockholder, as applicable, as required by applicable Laws, and for any Taxes of the Contributor (including those described in subclause (A)(ii) above), other than Taxes attributable to the Company’s breach of its covenants in Section 6.03(f) or Section 6.04, provided, however, that, in either case, neither the Contributor nor the Stockholder, as applicable, shall be liable for any penalties that may become payable in respect thereof, and provided further that, for the avoidance of doubt, the indemnification obligation of the Stockholder pursuant to this clause (B) shall neither be limited to the Indemnity Holdback Amount nor subject to the Deductible.

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Section 2.08         Merger.

(a)          Immediately following the Contribution Closing, the Contributor and the Stockholder agree that the Company shall take all actions to file, or cause to be filed, the Certificate of Conversion and the Certificate of Formation, at the Contributor’s sole cost and expense, with the DSOS. The parties agree and acknowledge that the closing of the Merger is conditioned upon the closing of the Contribution and the effectiveness of the Conversion.

(b)          Immediately following the completion of the Conversion, the Company, Marathon LLC, and the Equity Holder shall execute and deliver the Merger Agreement and close the Merger in accordance with the terms and conditions of the Merger Agreement.

Article III

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

The Company hereby represents and warrants to the Contributor as set forth below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 3.01         Organization; Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Maryland. The Company has all requisite power and authority to enter into the Transaction Agreements and all agreements contemplated thereby to which it is party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Company have been duly and validly authorized by all necessary action of the Company. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Company pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Company, each enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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Section 3.03         Consents and Approvals. Except in connection with the IPO and the consummation of the Formation Transactions or as shall have been obtained on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Company in connection with the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby, including, without limitation, the Merger, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.04         Tax Matters. At the effective time of the IPO and at the Contribution Closing and at the effective time of the Merger, the Company shall be organized in a manner so as to qualify for taxation as a REIT pursuant to Sections 856 through 860 of the Code. The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31 of the year in which the Contribution Closing takes place.

Section 3.05         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated by the Transaction Agreements between the parties to the Transaction Agreements and the transactions contemplated thereby between the parties to the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation, or other right under, (a) the Organizational Documents of the Company, (b) any agreement, document or instrument to which the Company is a party or by which the Company is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Company (or its assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.06         Validity of Company Shares. The Company Shares, when issued and delivered pursuant to the terms of the Transaction Agreements, will be duly authorized by the Company and will be validly issued by the Company, free and clear of all Liens created by the Company (other than Liens created by the charter of the Company, the Escrow Agreement, the Lock-up Agreement or the Transaction Agreements).

Section 3.07         Litigation. There is no action, suit or proceeding pending or, to the Company’s Knowledge, threatened against the Company, the Operating Partnership or any of their Subsidiaries which is reasonably expected to have a Company Material Adverse Effect, or which challenges or impairs the ability of the Company to execute or deliver, or perform its obligations under, the Transaction Agreements and the documents executed by it pursuant to the Transaction Agreements or to consummate the transactions contemplated thereby.

Section 3.08         Limited Activities. Except for activities in connection with the IPO or the Formation Transactions or in the ordinary course of business, the Company and the Operating Partnership and their Subsidiaries have not engaged in any material business or incurred any material obligations.

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Section 3.09         Broker. None of the Company or the Operating Partnership or any of their members, partners, general partners, officers, directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Contributor to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by the Transaction Agreements.

Section 3.10         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article III, the Company shall not be deemed to have made any other representation or warranty in connection with the Transaction Agreements or the transactions contemplated thereby.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

Except as disclosed in the disclosure letter delivered to the Company by the Contributor on the date hereof (the “Contributor Disclosure Letter”), the Contributor hereby represents and warrants to the Company as set forth below, and the Stockholder hereby represents and warrants to the Company as set forth in Section 4.13 below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 4.01         Organization; Authority.

(a)          The Contributor is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(b)          Following the Conversion, the Contributor will be a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware and will have all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

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(c)          Section 4.01(b) of the Contributor Disclosure Letter, sets forth as of the date hereof, with respect to the Contributor, (i) the name and the jurisdiction of organization or incorporation, as the case may be, of each Subsidiary of the Contributor (“Contributor Subsidiary”) and (ii) the ownership interest of the Contributor or other Contributor Subsidiary in each such Contributor Subsidiary. Each Contributor Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(d)          The Contributor or Contributor Subsidiaries own the equity interests in the Persons set forth on Section 4.01(d) of the Contributor Disclosure Letter (together with the Subsidiaries of such Persons, the “JV Entities”) in the stated percentage set forth on Section 4.01(d) of the Contributor Disclosure Letter.

(e)          The Contributor has made available to the Company a complete and correct copy of the operating agreement for Marathon LLC, which will be executed immediately following completion of the Conversion by the Stockholder, which will be the sole Equity Holder of Marathon LLC.

Section 4.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Contributor and the Stockholder have been duly and validly authorized by all necessary action required of the Contributor and the Stockholder, respectively. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Contributor and the Stockholder pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Contributor and the Stockholder, each enforceable against the Contributor and the Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.03         Ownership of Contributed Interests; Capitalization.

(a)          The Contributor is the owner of the Contributed Interests and has the power and authority to transfer, sell, assign and convey to the Company the Contributed Interests free and clear of any Liens (other than Permitted Liens) and, upon delivery of the consideration for the Contributed Interests as provided herein, the Company will acquire good and valid title thereto, free and clear of any Liens (other than Permitted Liens). Except as provided for or contemplated by this Contribution Agreement or any other agreements referenced herein, there are no, and, as of the Contribution Closing, there will not be any rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements, instruments or understandings of any kind outstanding entitling any Person to acquire any equity interests in the Contributor Subsidiaries or JV Entities, except pursuant to Permitted Liens or rights established pursuant to the terms of the Organizational Documents and related agreements with respect to the Contributor Subsidiaries and JV Entities that have been previously disclosed to the Company.

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(b)          The sole stockholder of Marathon is the Stockholder. Following the Conversion, the sole equity holder of Marathon LLC entitled to receive the Merger Consideration pursuant to the Merger Agreement, subject to the Indemnity Holdback Amount, will be the Stockholder.

Section 4.04         Consents and Approvals. Except as shall have been satisfied on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder in connection with the execution, delivery and performance of the Transaction Agreements, and the transactions contemplated by the Transaction Agreements, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not have a Contributor Material Adverse Effect.

Section 4.05         Taxes.

(a)          The Contributor and each Contributor Subsidiary and JV Entity has timely filed, or will timely file, all Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) in accordance with all applicable Laws. All such Tax Returns are correct and complete in all material respects, and the Contributor and each Contributor Subsidiary and JV Entity has paid (or had paid on its behalf) all Taxes required to be paid by it (whether or not shown on such Tax Returns), and no deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Contributor or any Contributor Subsidiary or JV Entity, and no requests for waivers of the time to assess any such Taxes are pending and no such waivers have been granted.

(b)          There are no Liens as a result of any unpaid Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or property of the Contributor, any Contributor Subsidiary or any JV Entity.

(c)          Except as would not reasonably be expected to have a Contributor Material Adverse Effect, there are no pending or, to the Contributor’s Knowledge, threatened audits, assessments or other actions for or relating to a liability in respect of income or non-income Taxes of the Contributor, any Contributor Subsidiary or any JV Entity.

(d)          The Contributor has entered into this Agreement for good and valid business reasons.

(e)          The Stockholder has no plan or intention to sell, exchange or transfer equity interests in Marathon LLC or stock in the Contributor for consideration other than Company Common Stock, in contemplation of the Contribution or Merger, to the Company (or any party related to the Company) or sell, exchange or transfer any Company Common Stock received in the Merger to the Company (or any party related to the Company).

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(f)          The Contributor has not agreed to assume, nor will assume, directly or indirectly, any expense or other liability, whether fixed or contingent, of the Stockholder in connection with or as part of the Merger or any related transaction.

(g)          No part of the Company Common Stock issued pursuant to this Agreement or the Merger Consideration will be received by the Stockholder as a creditor, employee or in any capacity other than as an equity holder in Marathon LLC or stockholder of Marathon.

(h)          The Contributor is a “United States real property holding corporation” for U.S. federal income tax purposes.

(i)          The Contributor holds cash or cash equivalents (excluding any cash or cash equivalents taken into account in the net amount of tangible assets and liabilities set forth in Section 4.16 of the Disclosure Letter) in an amount that is at least equal to the unpaid Taxes owed by it for all taxable periods ending on or prior to the Contribution Closing Date.

(j)          None of the Contributor or any Contributor Subsidiary is or ever has been a party to or bound by, or could have any liability under, any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement (other than commercial agreements entered into in the ordinary course of business, the principal purpose of which is not related to Taxes).

(k)          None of the Contributor or any Contributor Subsidiary has any liability for Taxes of any person arising from the application of Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or foreign law (other than in respect of being a member of a consolidated group the common parent of which is the Contributor), or as a transferee or successor.

Section 4.06         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated thereby between the parties to the Transaction Agreements and the transactions contemplated by the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under, (a) the Organizational Documents of the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder, (b) any agreement, document or instrument to which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder is a party or by which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder are bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder (or their assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.07         Solvency. The Contributor has been and will be solvent at all times prior to the transfer of the Contributed Interests to the Company. No bankruptcy or similar insolvency proceeding has been filed or is currently contemplated by the Contributor, any Contributor Subsidiary or any JV Entity thereof.

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Section 4.08         Litigation. Except for actions, suits or proceedings covered by the policies of insurance described in Section 4.11, as of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a Contributor Material Adverse Effect. As of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which challenges or impairs the ability of the Contributor to execute or deliver, or perform its obligations under this Contribution Agreement or to consummate the transactions contemplated hereby, including the Merger.

Section 4.09         Licenses and Permits. To the Contributor’s Knowledge, all notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management, leasing and operation of the Properties have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and (to the extent required in connection with the transactions contemplated by the Transaction Agreements) are assignable to the Company, except in each case for items that would not, individually or in the aggregate, have a Contributor Material Adverse Effect. To the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary, any JV Entity nor any third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, nor has any of them received within the past one year any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of them, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority and that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.10         Properties.

(a)          The Properties are owned directly, in fee simple, by the Persons set forth on Section 4.10 of the Contributor Disclosure Letter or their direct or indirect wholly owned subsidiaries. Each Contributor Subsidiary or JV Entity listed as owning a Property on Section 4.10 of the Contributor Disclosure Letter is insured under a policy of title insurance as the owner of the fee simple estate (or, in the case of certain Properties, the leasehold estate) of such Property, in each case free and clear of all Liens except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property. Prior to the effective time of the transactions contemplated in this Contribution Agreement, no Contributor Subsidiary or JV Entity shall take or omit to take any action to cause any Lien to attach to any Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property.

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(b)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) no Contributor Subsidiary, JV Entity, nor any other party to any agreement affecting any Property to which the Contributor, a Contributor Subsidiary or JV Entity is a party (other than a Lease (as such term is hereinafter defined) for space within such Property), has given or received any notice of default with respect to any term or condition of any such agreement, including, without limitation, any ground lease, (ii) no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of any Contributor Subsidiary or JV Entity, except for Permitted Liens, and (iii) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space leases) are valid and binding and in full force and effect. No Contributor Subsidiary or JV Entity has granted an option or right of first refusal or offer pursuant to the leases with respect to the sale of any Property.

(c)          As presently conducted, none of the operation of the buildings, fixtures and other improvements comprising a part of the Properties is in violation of any applicable building code, zoning ordinance or other law or regulation, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect. Neither the Contributor nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened proceedings for the rezoning of any Property or portion thereof except for such notices or proceedings that would not, individually, or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

(d)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) to the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary nor any JV Entity, nor any other party to any Lease, has given or received any notice of default with respect to any term or condition of any such Lease, (ii) to the Contributor’s Knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of the Contributor, the Contributor’s Subsidiaries or the JV Entities, except for Permitted Liens, and (iii) each of the leases (and all amendments thereto or modifications thereof) to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which any Contributor, Contributor Subsidiary or JV Entity or any Property is bound or subject (collectively, the “Leases”) is and will be valid and binding and in full force and effect.

(e)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, each of the Leases to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which the Contributor, any Contributor Subsidiary, JV Entity or any Property is bound or subject, is in full force and effect, and constitutes the legal, valid and binding obligation of the Contributor or the applicable Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, enforceable against each Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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(f)          To the Contributor’s Knowledge, except as previously disclosed to the Company, no tenant under any such Lease is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings, except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.11         Insurance. The Contributor or the applicable Contributor Subsidiary or JV Entity has in place the public liability, casualty and other insurance coverage with respect to each Property as the Contributor reasonably deems necessary. Each of the insurance policies with respect to the Properties is in full force and effect in all material respects and none of the Contributor or the applicable Contributor Subsidiary or JV Entity is in default (in any material respect) under any such policies.

Section 4.12         Environmental Matters. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect (a) the Contributor Subsidiaries and the JV Entities are in compliance with all applicable Environmental Laws (b) neither the Contributor Subsidiaries nor any JV Entity have received within the past three years any written notice from any Governmental Authority or third party alleging that any Contributor Subsidiary, any JV Entity or any Property is not in compliance with applicable Environmental Laws, and (c) there has not been a release of a hazardous substance on any Property that would require investigation or remediation under applicable Environmental Laws. The representations and warranties contained in this Section 4.12 constitute the sole and exclusive representations and warranties made by the Contributor concerning environmental matters.

Section 4.13         Investment. The Stockholder acknowledges that the offering and issuance of the Company Shares to be acquired pursuant to this Contribution Agreement and the Merger Agreement are intended to be exempt from registration under the Securities Act and that the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Stockholder contained herein. In furtherance thereof, the Stockholder represents and warrants to the Company as follows:

(a)          The Stockholder is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act).

(b)          The Stockholder is acquiring the Company Shares solely for its own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof in violation of the securities Laws.

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(c)          The Stockholder acknowledges that the Company Shares have not been registered under the Securities Act and, therefore, may not be sold unless registered under the Securities Act or an exemption from registration is available.

Section 4.14         Broker. None of the Contributor, any Contributor Subsidiary, JV Entity, or any of their managing members, members, partners, general partners, officers directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Company, the Operating Partnership or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Contribution Agreement or other Formation Transactions.

Section 4.15         Eminent Domain. There is no existing or, to the Contributor’s Knowledge threatened, in writing condemnation, eminent domain or similar proceeding that would affect any of the Properties. Neither the Stockholder nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened condemnation, eminent domain or similar proceeding that would affect any of the Properties.

Section 4.16         Assets and Liabilities. Section 4.16 of the Contributor Disclosure Letter accurately sets forth, in all material respects, as of June 30, 2014 and September 30, 2014, (i) all outstanding indebtedness of the Contributor, the Contributor Subsidiaries and each JV Entity, (iii) all interest rate swap liabilities of such entities and (iii) the net amount of all other tangible assets and liabilities of such entities (other than deferred tax liabilities, if any, and their interests in the Properties), which consists of cash, cash equivalents, accounts receivable and accounts payable. Except for distributions set forth on Section 4.16 of the Contributor Disclosure Letter (“Permitted Distributions”) or as contemplated by this Contribution Agreement (“Permitted Activities”), since September 30, 2014, the Contributor has not (i) made any distributions or (ii) entered into any transactions with an Affiliate other than on an arm’s-length basis. Section 4.16 of the Contributor Disclosure Letter accurately sets forth all contributions made to the Contributor by its Stockholder since September 30, 2014.

Section 4.17         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article IV, the Contributor shall not be deemed to have made any other representation or warranty in connection with this Contribution Agreement or the transactions contemplated hereby.

Article V

INDEMNIFICATION

Section 5.01         Company Indemnification. Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Company shall indemnify and hold harmless the Stockholder and its officers, employees, partners, members, agents, representatives and Affiliates (each of which is a “Contributor Indemnified Party”) from and against any and all charges, complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “Losses”) in excess of the greater of (i) 4.5% of the Company Cap or (ii) $250,000, in each case in the aggregate (the “Deductible”), arising out of or relating to, asserted against, imposed upon or incurred by a Contributor Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Company contained in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Company pursuant to the Transaction Agreements; provided, however, that the Company shall not have any obligation under this Section 5.01 to indemnify any Contributor Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Contributor’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud.

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Section 5.02         Stockholder Indemnification.

(a)          Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Indemnity Holdback Amount shall be used to indemnify and hold harmless the Company, the Operating Partnership and each of their respective directors, officers, employees, agents, representatives and Affiliates (each of which is a “Company Indemnified Party”) from and against any and all Losses in excess of the greater of (i) 4.5% of the Indemnity Holdback Amount or (ii) $250,000, in each case in the aggregate, arising out of or relating to, asserted against, imposed upon or incurred by such Company Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Contributor or Stockholder in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Contributor or the Stockholder pursuant to the Transaction Agreements; provided, however, that the Stockholder shall not have any obligation under this Section 5.02 to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Company’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud; provided further, however, that, to the extent such Losses relate to breach of a representation, warranty or covenant of the Contributor regarding a Person or the assets and liabilities of a Person that the Company or the Operating Partnership has or acquires an interest in from a Person other than the Contributor, the indemnification pursuant to this Section 5.02 shall be limited to the portion of such Losses attributable to the interest acquired from the Contributor pursuant to this Contribution Agreement. The Stockholder hereby grants to the Company a security interest in the Company Shares held as the Indemnity Holdback Amount to secure the indemnification obligations set forth in this Section 5.02.

(b)          Any indemnification payment made by the Company to the Stockholder pursuant to the Transaction Agreements shall be made to such Stockholder in shares of Company Common Stock, the number of which shall equal the dollar value of the indemnification payment divided by the price of a share of Company Common Stock as of the close of market on the date of such indemnification payment.

Section 5.03         Notice of Claims  At the time when any Contributor Indemnified Party or Company Indemnified Party, as applicable, (as applicable, an “Indemnified Party”) learns of any potential claim (a “Claim”) under this Article V that is asserted against the Indemnified Party that is subject to indemnification by the Company or in respect of the Contributor from the Indemnity Holdback Amount, as applicable, under this Article V (as applicable, the “Indemnifying Party”), such Indemnified Party will promptly give written notice (a “Claim Notice”) to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative); provided that failure to do so shall not prevent recovery under this Contribution Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by Law, the Indemnified Party shall deliver to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to a Third Party Claim (defined below), and failure to do so shall prevent recovery under this Contribution Agreement to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.

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Section 5.04         Third Party Claims. The Indemnifying Party (through the Stockholder’s Representative in the event the Indemnified Party is a Company Indemnified Party) shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties (“Third Party Claims”), through counsel chosen by the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), if it gives written notice of its intention to do so to the Indemnified Parties within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their expense provided, further, that if any such Third Party Claim relates to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, or seeks non-monetary damages or asserts damages in excess of the Indemnity Holdback Amount against a Company Indemnified Party, then, notwithstanding anything in this Contribution Agreement to the contrary, the Company (or a Subsidiary of the Company) shall have the right to control any such Third Party Claim. Without limiting the foregoing, in the event that the Indemnifying Party exercises the right to undertake any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party (unless prohibited by Law), at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the one hand, or the Indemnifying Party (or in the case of the Company Indemnified Parties, the Stockholder’s Representative), on the other hand, without the other’s consent (which shall not be unreasonably withheld or delayed) unless (a) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party and (b) each Indemnified Party that is party to such claim is released from all liability with respect to such claim; provided that the Stockholder’s Representative shall be deemed to have consented to any proposed compromise or settlement to which it has not objected to by written notice within 30 days after notice of such proposed compromise or settlement was provided by a Company Indemnified Party.

Section 5.05         Survival of Representations and Warranties. All representations and warranties of the Contributor and the Company, as applicable, contained in this Contribution Agreement shall survive after the Closing until the first anniversary of the Contribution Closing Date (the “Expiration Date”). If written notice of a Claim in accordance with the provisions of Section 5.03 has been given prior to the Expiration Date, then the relevant representation and warranty shall survive, but only with respect to such specific Claim, until such Claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

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Section 5.06         Establishment of Indemnity Holdback Escrow. On the Contribution Closing Date, the Company shall deposit the Indemnity Holdback Amount in accordance with the terms and conditions of the Escrow Agreement. The Company agrees that the security interest in the Company Shares may be released, or collateral may be substituted for such Company Shares, in accordance with the Escrow Agreement.

Section 5.07         Exclusive Remedy.

(a)          Except as set forth in Sections 2.07 and 6.05, the sole and exclusive remedy for Company Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Stockholder shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the Indemnity Holdback Amount.

(b)          Except as set forth in Section 6.04 of the PGI Merger Agreement, the sole and exclusive remedy for Contributor Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Company shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the dollar amount obtained by multiplying the number of Company Shares included in the Indemnity Holdback Amount by the Price to the Public (the “Company Cap”).

Section 5.08         Tax Treatment. All indemnity payments made hereunder shall be treated as adjustments to the consideration paid hereunder for U.S. federal income tax purposes, unless otherwise required by applicable Laws.

Article VI

COVENANTS AND OTHER AGREEMENTS

Section 6.01         Covenants of the Contributor. From the date hereof through the Merger Closing, except as otherwise provided for or as contemplated by the Transaction Agreements, the Contributor shall and shall cause the Contributor Subsidiaries and JV Entities, to the extent the Contributor or the Contributor Subsidiaries control such JV Entities, to, use commercially reasonable efforts to conduct their business and operate and maintain the Properties in the ordinary course, consistent with past practices. In addition, the Contributor:

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(a)          will not make any distributions, other than Permitted Distributions;

(b)          except for Permitted Activities, will not enter into any transactions with an Affiliate other than on an arm’s-length basis;

(c)          will not sell, transfer or otherwise dispose of its Property Interests; and

(d)          will not mortgage, pledge, hypothecate, encumber (or permit to become encumbered) all or any portion of its Property Interests, except for Permitted Liens.

Section 6.02         Stockholder’s Representative. The Stockholder hereby appoints Dr. Thomas Finne as the representative for the Stockholder (the “Stockholder’s Representative”) and the Stockholder’s Representative shall have the authority to take the actions provided herein and receive notices on behalf of the Stockholder subsequent to the Merger Closing.

Section 6.03         Tax Covenants.

(a)          Each party hereto (i) shall cause all Tax Returns relating to the Contribution, Conversion and Merger to be filed on the basis of treating the Contribution, Conversion and Merger, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) shall not take any position on any Tax Return, or take any other reporting position, that is inconsistent with such treatment, unless otherwise required by applicable Laws.

(b)          The Contributor shall provide the Company with such reasonable cooperation and information relating to the Contributor, any Contributor Subsidiary and any JV Entity as the Company reasonably requires in (i) filing any Tax Return, amended Tax Return or claim for Tax refund, (ii) determining any liability for Taxes or a right to a Tax refund, (iii) conducting or defending any proceeding in respect of Taxes or (iv) performing Tax diligence, including with respect to the impact of the transactions contemplated herein on the Company’s qualification as a REIT for U.S. federal income Tax purposes and the qualification of the Contribution, Conversion and Merger, taken together, as a reorganization under Section 368(a) of the Code.

(c)          The Company shall be responsible for the prosecution of any claim or audit instituted after the Contribution Closing Date with respect to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, attributable to any taxable period, or portion thereof, ending on or before the Contribution Closing Date.

(d)          Following the Merger Closing, to the extent the Stockholder has provided a FIRPTA Notice pursuant to Section 2.01(b)(iv)(A) instead of cash sufficient to fund withholding pursuant to Section 2.01(b)(iv)(B), the Stockholder shall provide the Company with evidence satisfactory to the Company that the Stockholder has complied with the requirements of Temporary Treasury Regulations Section 1.897-5T(d)(1)(iii), as modified by IRS Notice 89-57 with respect to the transactions contemplated hereby.

(e)          Within 20 days after the Closing, the Company shall submit to the Internal Revenue Service the FIRPTA notice provided to it by the Stockholder pursuant to Section 2.01(b)(iv), in accordance with the requirements of Treasury Regulation Section 1.1445-2(d)(2)(i)(B).

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(f)          The Company shall (a) cause to be timely paid any New York City and New York State real property transfer taxes payable by the Contributor as a result of, or in connection with, the Contribution (collectively, the “New York Transfer Taxes”); provided, that the parties hereto acknowledge and agree that such amount of New York Transfer Taxes payable shall reflect the Company’s status as a REIT; and (b) timely and properly file, with the Contributor’s cooperation, all Tax returns with respect to such New York Transfer Taxes.

Section 6.04         Tax Protection Provisions. The parties agree and acknowledge that the Stockholder is a beneficiary of the tax protection provisions set forth in Section 6.04 of that certain Agreement and Plan of Merger, dated as of the date hereof, by and among the Company, Paramount Group Inc., a Delaware corporation (“PGI”), the Stockholder and the other stockholders of PGI named therein (the “PGI Merger Agreement”).

Section 6.05         Liability for Transfer Taxes.  The Stockholder agrees to indemnify the Company for any Incremental Transfer Taxes incurred as a result of any direct or indirect transfers of the Company Shares received in connection with the transactions contemplated hereby, or interests therein (other than the receipt of the Merger Consideration by the Stockholder pursuant to the Merger Agreement) within two years after the IPO Closing Date; provided that such Company Shares shall be the Company’s sole recourse with respect to such indemnification obligation. The Stockholder hereby grants a security interest in 50% of its Company Shares received in the Merger to the Company and hereby irrevocably appoints the Company, and any of its agents, officers, or employees as its attorney-in fact, which shall be deemed coupled with an interest, with full power to prepare, execute and deliver any documents, instruments and agreements as may be appropriate to perfect and continue such security interest in favor of the Company. The security interest granted pursuant to this Section 6.05 shall attach to the Company Shares that are not included in the Indemnity Holdback Amount. The Company agrees that the security interest in the Company Shares received by the Stockholder in the Merger may be released, or collateral may be substituted, in accordance with the terms of the Escrow Agreement.

Section 6.06         Commercially Reasonable Efforts By the Company and the Contributor. Each of the Company and the Contributor shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Laws or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Contribution Agreement, and (b) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits or authorizations.

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Article VII

GENERAL PROVISIONS

Section 7.01         Notices. All notices and other communications under the Transaction Agreements shall be in writing and shall be deemed given when (a) delivered personally, (b) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid, (c) one (1) Business Day after being sent by a nationally recognized overnight courier or (d) transmitted by facsimile if confirmed within 24 hours thereafter by a signed original sent in the manner provided in clause (a), (b) or (c) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such party):

(a)          if to the Company to:

Paramount Group, Inc.
1633 Broadway, Suite 1801
New York, NY 10011
Facsimile: (212) 237-3197
Attention: General Counsel

(b)          If to the Contributor, the Stockholder or the Stockholder’s Representative, to Marathon Rental Investments, Inc.

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG
Werner-Otto-Straße 1-7
D-22179 Hamburg, Germany
Attention: Thomas Armbrust
Fax: +49-40-6461-2960

Section 7.02         Definitions. For purposes of this Contribution Agreement, the following terms shall have the following meanings:

(a)          “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(b)          “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.

(c)          “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.

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(d)          “Company’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(e)          “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Company and the Operating Partnership and their Subsidiaries, taken as a whole, giving effect to the Formation Transactions and the IPO. For the avoidance of doubt, the Merger shall not be deemed a Company Material Adverse Effect.

(f)          “Contributor Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operation of the Contributor and the Contributor Subsidiaries, taken as a whole, including such entities’ direct and indirect interests in the JV Entities. For the avoidance of doubt, the Merger shall not be deemed a Contributor Material Adverse Effect.

(g)          “Contributor’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(h)          “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.

(i)           “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(j)          “Incremental Transfer Taxes” means any additional transfer taxes attributable to the transactions contemplated by this Agreement and the other Formation Transactions as a result of the failure of any such transaction to qualify as a "real estate investment trust transfer" under New York Tax Law section 1402 or under New York City Administrative Code section 11-2102 due to direct or indirect transfers of the Company Shares issued as Merger Consideration occurring within two years after the IPO Closing Date.

(k)          “IPO Closing Date” means the closing date of the IPO.

(l)          “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority.

(m)          “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.

(n)          “Organizational Documents” means with respect to any entity, the certificate of formation, limited liability company agreement, or operating agreement, certificate of incorporation, bylaws, certificate of limited partnership, limited partnership agreement and any other governing instrument, as applicable, including, without limitation, in the case of the Contributor, the Limited Liability Company Operating Company Agreement of Marathon Rental Investments LLC.

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(o)          “Permitted Liens” means (i) Liens for unpaid Taxes (other than statutory liens for Taxes not yet due and payable); (ii) zoning Laws generally applicable to the districts in which the Properties are located; (iii) easements for public utilities, encroachments, rights of access and/or other non-monetary matters that do not materially interfere with the use of the Properties; (iv) Liens securing Permitted Activities; (v) Liens arising in the ordinary course of business; (vii) Liens securing indebtedness outstanding as of September 30, 2014 or incurred on an arms’ length basis thereafter and (viii) any exceptions contained in the title policies relating to the Properties as of the Contribution Closing Date.

(p)          “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

(q)          “Price to the Public” means the public offering price of a share of Company Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the registration statement pursuant to which the shares of Company Common Stock offered in the IPO were registered under the Securities Act.

(r)          “Registration Statement” means the Company’s registration statement on Form S-11, as amended from time to time, as filed with the SEC.

(s)          “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(t)          “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another direct or indirect Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii) (A) 50% or more of the voting power of the voting capital stock or other equity interests, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.

(u)          “Tax” (and, with its correlative meaning, “Taxes”) means any and all taxes, including any interest, penalties, or other additions to tax that may become payable in respect thereof, which taxes shall include, without limiting the generality of the foregoing, all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, unclaimed property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

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(v)         “Tax Return” means any return, statement, schedule, declaration, claim for refund, report, document or form filed or required to be filed with respect to Taxes, including any amendment, attachment and supplement thereof.

Section 7.03         Counterparts. This Contribution Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. All counterparts shall collectively constitute one agreement (or amendment, as applicable). The exchange of counterparts of this Contribution Agreement among the parties by means of facsimile transmission or by electronic transmission (pdf) which shall contain authentic reproductions shall constitute a valid exchange of this Contribution Agreement and shall be binding upon the parties hereto.

Section 7.04         Entire Agreement; Third-Party Beneficiaries. The Transaction Agreements and the Escrow Agreement, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject matter of the Transaction Agreements. The Transaction Agreements are not intended to confer any rights or remedies on any Person other than the parties hereto.

Section 7.05         Governing Law. The Transaction Agreements shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Section 7.06         Assignment. The Transaction Agreements shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and thereto and their respective heirs, legal representatives, successors and assigns; provided, however, that the Transaction Agreements may not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Company may assign its rights and obligations hereunder and thereunder to an Affiliate. Notwithstanding the foregoing, the Transaction Agreements shall be assigned to Marathon LLC.

Section 7.07         Jurisdiction. The parties hereto hereby (a) submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York City, New York, with respect to any dispute arising out of the Transaction Agreements or any transaction contemplated hereby or thereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THE TRANSACTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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Section 7.08         Dispute Resolution. The parties intend that this Section 7.08 will be valid, binding, enforceable, exclusive and irrevocable and that it shall survive any termination of the Transaction Agreements.

(a)          Upon any dispute, controversy or claim arising out of or relating to the Transaction Agreements or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 7.08(c) below without regard to any such 10-day negotiation period.

(b)          Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 7.08(a) above shall be submitted to final and binding arbitration in New York before one neutral and impartial arbitrator, in accordance with the Laws of the State of New York for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days following a demand for arbitration, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.

(c)          Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under the Transaction Agreements. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

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(d)          The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.

Section 7.09         Severability. Each provision of the Transaction Agreements will be interpreted so as to be effective and valid under applicable Laws, but if any provision is held invalid, illegal or unenforceable under applicable Laws in any jurisdiction, then such invalidity, illegality or unenforceability will not affect any other provision, and the Transaction Agreements, as applicable, will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein.

Section 7.10         Rules of Construction.

(a)          The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of the Transaction Agreements and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

(b)          The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to the Transaction Agreements as a whole and not to any particular provision of the Transaction Agreements, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of the Transaction Agreements unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in the Transaction Agreements, they shall be deemed to be followed by the words “without limitation.” All terms defined in the Transaction Agreements shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in the Transaction Agreements are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

Section 7.11         Equitable Remedies. The parties agree that irreparable damage would occur to the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, in the event that any of the provisions of the Transaction Agreements were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, shall be entitled to an injunction or injunctions to prevent breaches of the Transaction Agreements by the other party and to enforce specifically the terms and provisions hereof in any federal or state court located in New York, this being in addition to any other remedy to which the parties entitled under the Transaction Agreements or otherwise at law or in equity.

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Section 7.12         Time of the Essence. Time is of the essence with respect to all obligations under the Transaction Agreements.

Section 7.13         Descriptive Headings. The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of the Transaction Agreements.

Section 7.14         No Personal Liability Conferred. The Transaction Agreements shall not create or permit any personal liability or obligation on the part of any officer, director, partner, employee or shareholder of the Company, the Contributor or the Stockholder.

Section 7.15         Amendments. This Contribution Agreement may be amended by appropriate instrument, without the consent of the Contributor and the Stockholder, at any time prior to the Contribution Closing Date; provided, that no such amendment, modification or supplement shall be made that alters the amount or changes the form of the consideration to be delivered to the Contributor or the Stockholder.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Contribution Agreement to be signed by their respective duly authorized officers or representatives, all as of the date first written above.

PARAMOUNT GROUP, INC., a Maryland corporation
	By:	/s/ David P. Spence
		Name: David P. Spence
		Title: Senior Vice President

MARATHON RENTAL INVESTMENTS, INC.
	By:	/s/ Thomas Armbrust
		Name: Thomas Armbrust
		Title: President

[Signature Page to Marathon Contribution Agreement]

STOCKHOLDER

/s/ Maren Otto

Name:  Maren Otto

[Signature Page to Marathon Contribution Agreement]

EXHIBIT A

List of Properties

[See attached]

A-1

EXHIBIT B

Certificate of Conversion

[See attached]

B-1

EXHIBIT C

Certificate of Formation

[See attached]

C-1

EXHIBIT D

Agreement and Plan of Merger

[See attached]

D-1

EXHIBIT E

Escrow Agreement

[See attached]

E-1

EXHIBIT F

Lock-up Agreement

[See attached]

F-1

EXHIBIT G

Assignment and Assumption Agreement

[See attached]

G-1

SCHEDULE 1.01

Excluded Assets

All of the interests in Kommanditgesellschaft Grundstücksgesellschaft EKZ Schwedt m.b.H. & Co. held by Marathon

Schedule 1.01

SCHEDULE 1.02

Consideration

Marathon

Consideration

1,980,402 Company Shares

Schedule 1.02

EX-99.5

 Exhibit 5

CONTRIBUTION AGREEMENT

by and among

Arcade Rental Investments, Inc.,

paramount group, inc.,

and

The Stockholder

of

arcade rental investments, inc.

Dated as of November 6, 2014

TABLE OF CONTENTS

		Page
Article I CONTRIBUTION; CONVERSION; MERGER		2
Section 1.01	Contribution Transaction; Assignment and Assumption	2
Section 1.02	Consideration	3
Section 1.03	Further Action	3
Section 1.04	Transaction Costs	3
Section 1.05	Prorations	3
Section 1.06	Tax Treatment of Contribution, Conversion and Merger	3
Article II CLOSING		4
Section 2.01	Conditions Precedent	4
Section 2.02	Time and Place	6
Section 2.03	Closing Deliveries	6
Section 2.04	Transfer Costs	7
Section 2.05	Term of the Agreement	7
Section 2.06	Effect of Termination	7
Section 2.07	Tax Withholding	7
Section 2.08	Merger	8
Article III REPRESENTATIONS AND WARRANTIES  OF THE COMPANY		8
Section 3.01	Organization; Authority	8
Section 3.02	Due Authorization	8
Section 3.03	Consents and Approvals	9
Section 3.04	Tax Matters	9
Section 3.05	No Violation	9
Section 3.06	Validity of Company Shares	9
Section 3.07	Litigation	9
Section 3.08	Limited Activities	9
Section 3.09	Broker	10
Section 3.10	No Other Representations or Warranties	10
Article IV REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR		10
Section 4.01	Organization; Authority	10
Section 4.02	Due Authorization	11
Section 4.03	Ownership of Contributed Interests; Capitalization	11
Section 4.04	Consents and Approvals	12
Section 4.05	Taxes	12
Section 4.06	No Violation	13
Section 4.07	Solvency	13
Section 4.08	Litigation	14
Section 4.09	Licenses and Permits	14
Section 4.10	Properties	14
Section 4.11	Insurance	16
Section 4.12	Environmental Matters	16

i

Section 4.13	Investment	16
Section 4.14	Broker	17
Section 4.15	Eminent Domain	17
Section 4.16	Assets and Liabilities	17
Section 4.17	No Other Representations or Warranties	17
Article V INDEMNIFICATION		18
Section 5.01	Company Indemnification	18
Section 5.02	Stockholder Indemnification	18
Section 5.03	Notice of Claims	19
Section 5.04	Third Party Claims	20
Section 5.05	Survival of Representations and Warranties	20
Section 5.06	Establishment of Indemnity Holdback Escrow	20
Section 5.07	Exclusive Remedy	20
Section 5.08	Tax Treatment	20
Article VI COVENANTS AND OTHER AGREEMENTS		20
Section 6.01	Covenants of the Contributor	20
Section 6.02	Stockholder’s Representative	21
Section 6.03	Tax Covenants	21
Section 6.04	Tax Protection Provisions	22
Section 6.05	Liability for Transfer Taxes	23
Section 6.06	Commercially Reasonable Efforts By the Company and the Contributor	24
Article VII GENERAL PROVISIONS		24
Section 7.01	Notices	24
Section 7.02	Definitions	25
Section 7.03	Counterparts	27
Section 7.04	Entire Agreement; Third-Party Beneficiaries	27
Section 7.05	Governing Law	27
Section 7.06	Assignment	27
Section 7.07	Jurisdiction	28
Section 7.08	Dispute Resolution	28
Section 7.09	Severability	29
Section 7.10	Rules of Construction	29
Section 7.11	Equitable Remedies	30
Section 7.12	Time of the Essence	30
Section 7.13	Descriptive Headings	30
Section 7.14	No Personal Liability Conferred	30
Section 7.15	Amendments	30

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EXHIBITS
Exhibit A	List of Properties
Exhibit B	Certificate of Conversion
Exhibit C	Certificate of Formation
Exhibit D	Agreement and Plan of Merger
Exhibit E	Escrow Agreement
Exhibit F	Lock-up Agreement
Exhibit G	Assignment and Assumption Agreement
SCHEDULES
Schedule 1.01	Excluded Assets
Schedule 1.02	Consideration

iii

DEFINED TERMS

Affiliate	Section 7.02
Arcade	Introduction
Arcade LLC	Introduction
Assignment and Assumption Agreement	Section 1.01
Business Day	Section 7.02
Certificate of Conversion	Recitals
Certificate of Formation	Recitals
Claim	Section 5.03
Claim Notice	Section 5.03
Closing Documents	Section 2.03
Code	Section 7.02
Company	Introduction
Company Cap	Section 5.07
Company Common Stock	Recitals
Company Indemnified Party	Section 5.02
Company’s Knowledge	Section 7.02
Company Material Adverse Effect	Section 7.02
Company Shares	Recitals
Contributed Interests	Recitals
Contribution	Recitals
Contribution Agreement	Introduction
Contribution Closing	Section 2.02
Contribution Closing Date	Section 2.02
Contributor	Introduction
Contributor Disclosure Letter	Article IV
Contributor Indemnified Party	Section 5.01
Contributor Material Adverse Effect	Section 7.02
Contributor Subsidiary	Section 4.01
Contributor’s Knowledge	Section 7.02
Conversion	Recitals
Covenant Period	Section 6.04
Deductible	Section 5.02
Dispute	Section 7.08
DSOS	Recitals
Environmental Laws	Section 7.02
Equity Holder	Recitals
Escrow Agreement	Recitals
Excluded Assets	Section 1.01
Expiration Date	Section 5.05
Formation Transactions	Recitals
Governmental Authority	Section 7.02
Incremental Transfer Taxes	Section 7.02
Indemnified Party	Section 5.03
Indemnifying Party	Section 5.03

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Indemnity Holdback Amount	Recitals
IPO	Recitals
IPO Closing	Section 2.02
IPO Closing Date	Section 7.02
JV Entities	Section 4.01
Laws	Section 7.02
Leases	Section 4.10
Liens	Section 7.02
Lock-up Agreement	Recitals
Losses	Section 5.01
Merger	Recitals
Merger Agreement	Recitals
New York Transfer Taxes	Section 6.03
No Gain Covenant	Section 6.04
No-Tax Position	Section 6.04
Operating Partnership	Recitals
Organizational Documents	Section 7.02
Outside Date	Section 2.05
Permitted Activities	Section 4.16
Permitted Distribution	Section 4.16
Permitted Liens	Section 7.02
Person	Section 7.02
Price to the Public	Section 7.02
Prohibited Event	Section 6.04
Properties	Recitals
Property	Recitals
Property Interests	Recitals
Registration Rights Agreement	Recitals
Registration Statement	Section 7.02
REIT	Recitals
SEC	Section 2.01
Securities Act	Section 7.02
Stockholder’s Representative	Section 6.02
Subsidiary	Section 7.02
Surviving Entity	Recitals
Tax	Section 7.02
Tax Return	Section 7.02
Third Party Claims	Section 5.04
Transaction Agreements	Recitals

v

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (including all exhibits and schedules, this “Contribution Agreement”) is made and entered into as of November 6, 2014, by and between PARAMOUNT GROUP, INC., a Maryland corporation (the “Company”), ARCADE RENTAL INVESTMENTS, INC., a Delaware corporation (the “Contributor” or “Arcade”), and the stockholder whose name appears on the signature page hereto (the “Stockholder”). Unless otherwise specifically stated herein or the context otherwise requires, the terms “Contributor” and “Arcade” refer to Arcade and its Subsidiaries with respect to the period prior to the Conversion and to Arcade Rental Investments LLC, a Delaware limited liability company (“Arcade LLC”), and its Subsidiaries with respect to the period from and after the Conversion. After the Conversion, all references to the term “Stockholder” shall mean the “Equity Holder.” Capitalized terms used and not defined in the body of this Contribution Agreement shall have the meanings set forth in Section 7.02 hereto.

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of the common stock, par value $0.01 per share (“Company Common Stock”), of the Company, which will operate as a self-administered and self-managed real estate investment trust (“REIT”) within the meaning of Sections 856 through 860 of the Code;

WHEREAS, in connection with the IPO, the Company, which is the sole general partner of Paramount Group Operating Partnership LP (the “Operating Partnership”), desires to engage in a series of transactions through which the Company and the Operating Partnership will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (collectively, the “Formation Transactions”);

WHEREAS, the Contributor owns, directly or indirectly, interests (the “Property Interests”) in the properties set forth on Exhibit A hereto, under the heading “Arcade” (each, a “Property” and together the “Properties”);

WHEREAS, as part of the Formation Transactions, pursuant to this Contribution Agreement, the Contributor shall contribute (the “Contribution”) to the Company all of its assets (other than Excluded Assets) and liabilities (the “Contributed Interests”) and the Company shall acquire from the Contributor all of the Contributor’s right, title and interest in the Contributed Interests in exchange for shares of Company Common Stock;

WHEREAS, the board of directors of the Contributor and the Stockholder have approved, subject to, and following the Contribution Closing, the conversion of the Contributor from a Delaware corporation to a Delaware limited liability company (the “Conversion”);

WHEREAS, following the Contribution Closing, the Company on behalf of the Contributor will file a Certificate of Conversion with the Secretary of State of the State of Delaware (the “DSOS”), a copy of which is attached hereto as Exhibit B (the “Certificate of Conversion”), and a Certificate of Formation, a copy of which is attached hereto as Exhibit C (the “Certificate of Formation”), in order to effectuate the Conversion;

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WHEREAS, following the effective time of the Conversion, pursuant to the Agreement and Plan of Merger attached hereto as Exhibit D (the “Merger Agreement” and together with this Contribution Agreement, the “Transaction Agreements”), Arcade LLC will merge with and into the Company (the “Merger”) with the Company as the surviving entity (sometimes referred to as the “Surviving Entity”) and in consideration thereof the Stockholder, which will be the sole equity holder of Arcade LLC (in such capacity, the “Equity Holder”), will receive shares of Company Common Stock (the “Company Shares”) in accordance with the terms and conditions set forth in the Merger Agreement;

WHEREAS, at the Merger Closing, the Stockholder acknowledges that the Company will deposit the number of Company Shares set forth on Schedule 1.07 of the Merger Agreement under the heading “Arcade LLC” as the Indemnity Holdback Amount, which represents approximately 1.5% of the Merger Consideration (collectively, the “Indemnity Holdback Amount”), into an Indemnity Holdback Escrow (as defined in the Escrow Agreement) pursuant to that certain Omnibus Distribution and Escrow Agent Agreement, a copy of which is attached hereto as Exhibit E (the “Escrow Agreement”), in order to provide for the exclusive remedy against the Stockholder (in its capacity as such) for any breaches of the Transaction Agreements by the Stockholder;

WHEREAS, concurrently with the execution of this Contribution Agreement, the Stockholder has executed and delivered a lock-up agreement to the underwriters of the IPO, a copy of which is attached as Exhibit F hereto (the “Lock-up Agreement”);

WHEREAS, concurrently with the execution of this Contribution Agreement, the Company has entered into a registration rights agreement with the Stockholder (the “Registration Rights Agreement”); and

WHEREAS, prior to or concurrently with the execution of this Contribution Agreement, the Company or the Operating Partnership, as the case may be, together with the applicable counterparties have entered into the Formation Transaction Documentation.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Contribution Agreement, the receipt and sufficiency of which is hereby acknowledged and agreed, the parties hereto, intending to be legally bound hereby, agree as follows:

Article I

CONTRIBUTION; CONVERSION; MERGER

Section 1.01         Contribution Transaction; Assignment and Assumption.

(a)          At the Closing and subject to the terms and conditions contained in this Contribution Agreement, the Contributor shall contribute, assign, set over, deliver and transfer to the Company absolutely and unconditionally and free and clear of all Liens (other than Permitted Liens), all of its right, title and interest in and to the Contributed Interests, including all rights to indemnification in favor of the Contributor under the agreements pursuant to which the Contributor acquired the Contributed Interests transferred pursuant to this Contribution Agreement. The contribution of the Contributed Interests shall be evidenced by the execution and delivery of an Assignment and Assumption Agreement in substantially the form of Exhibit G attached hereto and incorporated herein by reference (the “Assignment and Assumption Agreement”).

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(b)          Notwithstanding anything in Section 1.01(a) to the contrary, the Contributor shall not contribute, assign, set over, deliver or transfer any of Contributor’s right, title and interest to any assets of the Contributor set forth in Schedule 1.01 under the heading “Arcade” (“Excluded Assets”).

Section 1.02         Consideration. At the Contribution Closing, subject to the terms and conditions in this Contribution Agreement, in exchange for the transfer of the Contributed Interests, the Company shall issue to the Contributor the number of Company Shares set forth on Schedule 1.02 under the heading “Arcade”. No fractional Company Shares shall be issued to the Contributor pursuant to this Agreement. If aggregating all Company Shares that the Contributor otherwise would be entitled to receive pursuant to this Agreement would require the issuance of a fractional Company Share, the Contributor shall instead be entitled to receive one full Company Share in lieu of such fractional Company Share.

Section 1.03         Further Action. If, at any time after the Contribution Closing, the Company shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of the Contributor acquired or to be acquired by the Company as a result of, or in connection with, the Contribution or otherwise to carry out this Contribution Agreement, the Company shall be authorized to execute and deliver, in the name and on behalf of the Contributor, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of the Contributor, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Company or otherwise to carry out this Contribution Agreement.

Section 1.04         Transaction Costs. Subject to Section 6.05, if the Contribution Closing occurs, the Company shall be solely responsible for all transaction costs and expenses of the Company and the Contributor that have not previously been paid in connection with this Contribution Agreement, which include, but are not limited to, lender consent fees, legal, accounting and consultant fees.

Section 1.05         Prorations. There shall be no prorations at the Contribution Closing for any income and expense items with respect to the Properties.

Section 1.06         Tax Treatment of Contribution, Conversion and Merger. It is intended that, for U.S. federal income tax purposes, that the Contribution, Conversion and Merger shall, taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Contribution Agreement and the Merger Agreement constitutes, and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3.

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Article II

CLOSING

Section 2.01         Conditions Precedent.

(a)          Condition to Each Party’s Obligations. The respective obligation of each party to effect the contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date is subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

(i)          Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the Securities and Exchange Commission (“SEC”) seeking a stop order. This condition may not be waived by any party.

(ii)         IPO Proceeds. The Company shall have received, or have the right to receive, substantially concurrently with the Contribution Closing and the Merger Closing, the proceeds from the IPO. This condition may not be waived by any party.

(iii)        Merger. The Company, the Contributor and the Stockholder will agree that, except for filings with the DSOS in order to effectuate the Conversion, any conditions to closing the Merger, other than effecting the Conversion, have been irrevocably satisfied or waived at or prior to the Contribution Closing. This condition may not be waived by any party.

(iv)        No Injunction. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated by the Transaction Agreements nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.

(b)           Conditions to Obligations of the Company. The obligation of the Company to effect the Contribution contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Company in whole or in part):

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(i)          Representations and Warranties. (i) The representations and warranties of the Contributor set forth in Section 4.16 shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing, (ii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is qualified by materiality or Contributor Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (iii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is not qualified by materiality or Contributor Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Contributor Material Adverse Effect.

(ii)         Performance by the Contributor. The Contributor shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Contributor and the Stockholder to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of the Contributor to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        FIRPTA Affidavit. The Contributor shall have provided the Company with a properly executed FIRPTA certificate substantially in the form set forth in Treasury Regulation Section 1.1445-2(b)(2) providing that the Contributor is not a “foreign person” and the Stockholder shall have (A) provided the Company with a properly executed FIRPTA certificate in accordance substantially with the form set forth in Treasury Regulation Section 1.1445-2(d)(2) sufficient to avoid any withholding under Section 1445 of the Code or (B) provided cash (in such amount as determined by the Company in its reasonable discretion) to the Company sufficient to pay any applicable withholding under the Code.

(v)         Closing Documents. The Contributor shall have executed and delivered to the Company the documents to which it is a party which are required to be delivered pursuant to Section 2.03.

(c)          Conditions to Obligations of the Contributor. The obligation of the Contributor to effect the Contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Contributor in whole or in part):

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(i)          Representations and Warranties. (i) Each representation and warranty of the Company contained in this Contribution Agreement that is qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (ii) each representation and warranty of the Company contained in this Contribution Agreement that is not qualified by materiality or Company Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Company Material Adverse Effect.

(ii)         Performance by the Company. The Company shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Company to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of any of the Company to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        Price to the Public. The Contributor shall have approved the Price to the Public.

(v)         Closing Documents. The Company shall have executed and delivered to the Contributor the documents required to be delivered pursuant to Section 2.03.

Section 2.02         Time and Place. Unless this Contribution Agreement shall have been terminated pursuant to Section 2.05, and subject to satisfaction or waiver of the conditions in Section 2.01, the closing of the transfer contemplated by Section 1.01 and the other transactions contemplated hereby (the “Contribution Closing” or the “Contribution Closing Date”) shall occur prior to the Conversion and the Conversion shall occur prior to the Merger Closing and concurrently with the closing of the IPO (the “IPO Closing”), or up to one (1) day prior to, but conditioned upon the subsequent occurrence of the Merger Closing and the IPO Closing. The Closing shall take place at the offices of Goodwin Procter llp, 620 Eighth Avenue, New York, NY 10018 or such other place as determined by the Company in its sole discretion. In connection with the foregoing, the parties hereto hereby agree that the specific order in which the Contribution Closing, the Merger Closing, the IPO Closing and the closing of the other transactions that are part of or related to the Formation Transactions occur shall be as determined by the Company, provided, however, that the Contribution Closing shall precede the Conversion, and the Conversion shall precede the Merger Closing.

Section 2.03         Closing Deliveries. On the Contribution Closing Date, each of the parties shall make, execute, acknowledge and deliver the legal documents and other items to which it is a party or for which it is otherwise responsible that are necessary to carry out the intention of this Contribution Agreement and the other transactions contemplated to take place in connection therewith (collectively, the “Closing Documents”). The Closing Documents and other items to be delivered at the Contribution Closing shall be the following:

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(a)          the Assignment and Assumption Agreement; and

(b)          an executed Certificate of Conversion and Certificate of Formation.

Section 2.04         Transfer Costs. Subject to Section 6.05, the Company shall pay any documentary transfer taxes, escrow charges, title charges and recording taxes or fees incurred by the Company or the Contributor in connection with the transactions contemplated hereby.

Section 2.05         Term of the Agreement. The Transaction Agreements shall terminate automatically if the transactions contemplated by the Transaction Agreements shall not have been consummated on or prior to March 31, 2015 (such date is hereinafter referred to as the “Outside Date”). In addition, the Transaction Agreements may be terminated before the Contribution Closing by a document signed by the Company and the Contributor.

Section 2.06         Effect of Termination. In the event of termination of the Transaction Agreements for any reason, all obligations on the part of the Company and the Contributor and the Stockholder under the Transaction Agreements shall terminate, except that the obligations set forth in Article VII shall survive, it being understood and agreed, however, for the avoidance of doubt, that if the Transaction Agreements are terminated because one or more of the conditions to the non-breaching party’s obligations under this Contribution Agreement are not satisfied by the Outside Date as a result of the other party’s material breach of a covenant, representation, warranty or other obligation under the Transaction Agreements, the non-breaching party’s right to pursue all legal remedies with respect to such breach will survive such termination unimpaired.

Section 2.07         Tax Withholding. The Company shall be entitled to deduct and withhold, or cause to be deducted and withheld, from the consideration payable (or deemed payable) as a result of the transactions contemplated by the Transaction Agreements, including the Indemnity Holdback Amount, to the Contributor, or the Stockholder, as applicable, such amounts as the Company is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. tax law (as determined by the Company in its reasonable discretion). To the extent that amounts are so deducted and withheld by the Company, such amounts shall be treated for all purposes of the Transaction Agreements as having been paid to the Contributor, or the Stockholder, as applicable. The Contributor or the Stockholder, as applicable, shall (A) to the extent requested by Arcade, contribute cash prior to the Contribution and Merger equal to (i) any withholding Taxes that would otherwise be required to be withheld by the Company in connection with the Contribution and Merger (taking into account any gross-up attributable to such amounts) and (ii) any withholding Taxes that Arcade failed to withhold with respect to distributions to the Stockholder prior to the Closing and (B) indemnify and hold harmless the Company for any withholding Taxes relating to the Company’s failure to withhold from the Contributor or the Stockholder, as applicable, as required by applicable Laws, and for any Taxes of the Contributor (including those described in subclause (A)(ii) above), other than the Taxes attributable to the Company’s breach of its covenants in Section 6.03(f) or Section 6.04, provided, however, that, in either case, neither the Contributor nor the Stockholder, as applicable, shall be liable for any penalties that may become payable in respect thereof, and provided further that, for the avoidance of doubt, the indemnification obligation of the Stockholder pursuant to this clause (B) shall neither be limited to the Indemnity Holdback Amount nor subject to the Deductible.

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Section 2.08         Merger.

(a)          Immediately following the Contribution Closing, the Contributor and the Stockholder agree that the Company shall take all actions to file, or cause to be filed, the Certificate of Conversion and the Certificate of Formation, at the Contributor’s sole cost and expense, with the DSOS. The parties agree and acknowledge that the closing of the Merger is conditioned upon the closing of the Contribution and the effectiveness of the Conversion.

(b)          Immediately following the completion of the Conversion, the Company, Arcade LLC, and the Equity Holder shall execute and deliver the Merger Agreement and close the Merger in accordance with the terms and conditions of the Merger Agreement.

Article III

REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company hereby represents and warrants to the Contributor as set forth below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 3.01         Organization; Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Maryland. The Company has all requisite power and authority to enter into the Transaction Agreements and all agreements contemplated thereby to which it is party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Company have been duly and validly authorized by all necessary action of the Company. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Company pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Company, each enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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Section 3.03         Consents and Approvals. Except in connection with the IPO and the consummation of the Formation Transactions or as shall have been obtained on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Company in connection with the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby, including, without limitation, the Merger, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.04         Tax Matters. At the effective time of the IPO and at the Contribution Closing and at the effective time of the Merger, the Company shall be organized in a manner so as to qualify for taxation as a REIT pursuant to Sections 856 through 860 of the Code. The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31 of the year in which the Contribution Closing takes place.

Section 3.05         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated by the Transaction Agreements between the parties to the Transaction Agreements and the transactions contemplated thereby between the parties to the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation, or other right under, (a) the Organizational Documents of the Company, (b) any agreement, document or instrument to which the Company is a party or by which the Company is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Company (or its assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.06         Validity of Company Shares. The Company Shares, when issued and delivered pursuant to the terms of the Transaction Agreements, will be duly authorized by the Company and will be validly issued by the Company, free and clear of all Liens created by the Company (other than Liens created by the charter of the Company, the Escrow Agreement, the Lock-up Agreement or the Transaction Agreements).

Section 3.07         Litigation. There is no action, suit or proceeding pending or, to the Company’s Knowledge, threatened against the Company, the Operating Partnership or any of their Subsidiaries which is reasonably expected to have a Company Material Adverse Effect, or which challenges or impairs the ability of the Company to execute or deliver, or perform its obligations under, the Transaction Agreements and the documents executed by it pursuant to the Transaction Agreements or to consummate the transactions contemplated thereby.

Section 3.08         Limited Activities. Except for activities in connection with the IPO or the Formation Transactions or in the ordinary course of business, the Company and the Operating Partnership and their Subsidiaries have not engaged in any material business or incurred any material obligations.

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Section 3.09         Broker. None of the Company or the Operating Partnership or any of their members, partners, general partners, officers, directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Contributor to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by the Transaction Agreements.

Section 3.10         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article III, the Company shall not be deemed to have made any other representation or warranty in connection with the Transaction Agreements or the transactions contemplated thereby.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

Except as disclosed in the disclosure letter delivered to the Company by the Contributor on the date hereof (the “Contributor Disclosure Letter”), the Contributor hereby represents and warrants to the Company as set forth below, and the Stockholder hereby represents and warrants to the Company as set forth in Section 4.13 below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 4.01         Organization; Authority.

(a)          The Contributor is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(b)          Following the Conversion, the Contributor will be a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware and will have all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

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(c)          Section 4.01(b) of the Contributor Disclosure Letter, sets forth as of the date hereof, with respect to the Contributor, (i) the name and the jurisdiction of organization or incorporation, as the case may be, of each Subsidiary of the Contributor (“Contributor Subsidiary”) and (ii) the ownership interest of the Contributor or other Contributor Subsidiary in each such Contributor Subsidiary. Each Contributor Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(d)          The Contributor or Contributor Subsidiaries own the equity interests in the Persons set forth on Section 4.01(d) of the Contributor Disclosure Letter (together with the Subsidiaries of such Persons, the “JV Entities”) in the stated percentage set forth on Section 4.01(d) of the Contributor Disclosure Letter.

(e)          The Contributor has made available to the Company a complete and correct copy of the operating agreement for Arcade LLC, which will be executed immediately following completion of the Conversion by the Stockholder, which will be the sole Equity Holder of Arcade LLC.

Section 4.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Contributor and the Stockholder have been duly and validly authorized by all necessary action required of the Contributor and the Stockholder, respectively. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Contributor and the Stockholder pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Contributor and the Stockholder, each enforceable against the Contributor and the Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.03         Ownership of Contributed Interests; Capitalization.

(a)          The Contributor is the owner of the Contributed Interests and has the power and authority to transfer, sell, assign and convey to the Company the Contributed Interests free and clear of any Liens (other than Permitted Liens) and, upon delivery of the consideration for the Contributed Interests as provided herein, the Company will acquire good and valid title thereto, free and clear of any Liens (other than Permitted Liens). Except as provided for or contemplated by this Contribution Agreement or any other agreements referenced herein, there are no, and, as of the Contribution Closing, there will not be any rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements, instruments or understandings of any kind outstanding entitling any Person to acquire any equity interests in the Contributor Subsidiaries or JV Entities, except pursuant to Permitted Liens or rights established pursuant to the terms of the Organizational Documents and related agreements with respect to the Contributor Subsidiaries and JV Entities that have been previously disclosed to the Company.

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(b)          The sole stockholder of Arcade is the Stockholder. Following the Conversion, the sole equity holder of Arcade LLC entitled to receive the Merger Consideration pursuant to the Merger Agreement, subject to the Indemnity Holdback Amount, will be the Stockholder.

Section 4.04         Consents and Approvals. Except as shall have been satisfied on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder in connection with the execution, delivery and performance of the Transaction Agreements, and the transactions contemplated by the Transaction Agreements, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not have a Contributor Material Adverse Effect.

Section 4.05         Taxes.

(a)          The Contributor and each Contributor Subsidiary and JV Entity has timely filed, or will timely file, all Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) in accordance with all applicable Laws. All such Tax Returns are correct and complete in all material respects, and the Contributor and each Contributor Subsidiary and JV Entity has paid (or had paid on its behalf) all Taxes required to be paid by it (whether or not shown on such Tax Returns), and no deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Contributor or any Contributor Subsidiary or JV Entity, and no requests for waivers of the time to assess any such Taxes are pending and no such waivers have been granted.

(b)          There are no Liens as a result of any unpaid Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or property of the Contributor, any Contributor Subsidiary or any JV Entity.

(c)          Except as would not reasonably be expected to have a Contributor Material Adverse Effect, there are no pending or, to the Contributor’s Knowledge, threatened audits, assessments or other actions for or relating to a liability in respect of income or non-income Taxes of the Contributor, any Contributor Subsidiary or any JV Entity.

(d)          The Contributor has entered into this Agreement for good and valid business reasons.

(e)          The Stockholder has no plan or intention to sell, exchange or transfer equity interests in Arcade LLC or stock in the Contributor for consideration other than Company Common Stock, in contemplation of the Contribution or Merger, to the Company (or any party related to the Company) or sell, exchange or transfer any Company Common Stock received in the Merger to the Company (or any party related to the Company).

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(f)          The Contributor has not agreed to assume, nor will assume, directly or indirectly, any expense or other liability, whether fixed or contingent, of the Stockholder in connection with or as part of the Merger or any related transaction.

(g)          No part of the Company Common Stock issued pursuant to this Agreement or the Merger Consideration will be received by the Stockholder as a creditor, employee or in any capacity other than as an equity holder in Arcade LLC or stockholder of Arcade.

(h)          The Contributor is a “United States real property holding corporation” for U.S. federal income tax purposes.

(i)          All of the equity interests in the Stockholder are held by Alexander Otto.

(j)          The Contributor holds cash or cash equivalents (excluding any cash or cash equivalents taken into account in the net amount of tangible assets and liabilities set forth in Section 4.16 of the Disclosure Letter) in an amount that is at least equal to the unpaid Taxes owed by it for all taxable periods ending on or prior to the Contribution Closing Date.

(k)          None of the Contributor or any Contributor Subsidiary is or ever has been a party to or bound by, or could have any liability under, any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement (other than commercial agreements entered into in the ordinary course of business, the principal purpose of which is not related to Taxes).

(l)          None of the Contributor or any Contributor Subsidiary has any liability for Taxes of any person arising from the application of Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or foreign law (other than in respect of being a member of a consolidated group the common parent of which is the Contributor), or as a transferee or successor.

Section 4.06         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated thereby between the parties to the Transaction Agreements and the transactions contemplated by the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under, (a) the Organizational Documents of the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder, (b) any agreement, document or instrument to which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder is a party or by which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder are bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder (or their assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.07         Solvency. The Contributor has been and will be solvent at all times prior to the transfer of the Contributed Interests to the Company. No bankruptcy or similar insolvency proceeding has been filed or is currently contemplated by the Contributor, any Contributor Subsidiary or any JV Entity thereof.

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Section 4.08         Litigation. Except for actions, suits or proceedings covered by the policies of insurance described in Section 4.11, as of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a Contributor Material Adverse Effect. As of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which challenges or impairs the ability of the Contributor to execute or deliver, or perform its obligations under this Contribution Agreement or to consummate the transactions contemplated hereby, including the Merger.

Section 4.09         Licenses and Permits. To the Contributor’s Knowledge, all notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management, leasing and operation of the Properties have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and (to the extent required in connection with the transactions contemplated by the Transaction Agreements) are assignable to the Company, except in each case for items that would not, individually or in the aggregate, have a Contributor Material Adverse Effect. To the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary, any JV Entity nor any third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, nor has any of them received within the past one year any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of them, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority and that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.10         Properties.

(a)          The Properties are owned directly, in fee simple, by the Persons set forth on Section 4.10 of the Contributor Disclosure Letter or their direct or indirect wholly owned subsidiaries. Each Contributor Subsidiary or JV Entity listed as owning a Property on Section 4.10 of the Contributor Disclosure Letter is insured under a policy of title insurance as the owner of the fee simple estate (or, in the case of certain Properties, the leasehold estate) of such Property, in each case free and clear of all Liens except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property. Prior to the effective time of the transactions contemplated in this Contribution Agreement, no Contributor Subsidiary or JV Entity shall take or omit to take any action to cause any Lien to attach to any Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property.

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(b)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) no Contributor Subsidiary, JV Entity, nor any other party to any agreement affecting any Property to which the Contributor, a Contributor Subsidiary or JV Entity is a party (other than a Lease (as such term is hereinafter defined) for space within such Property), has given or received any notice of default with respect to any term or condition of any such agreement, including, without limitation, any ground lease, (ii) no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of any Contributor Subsidiary or JV Entity, except for Permitted Liens, and (iii) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space leases) are valid and binding and in full force and effect. No Contributor Subsidiary or JV Entity has granted an option or right of first refusal or offer pursuant to the leases with respect to the sale of any Property.

(c)          As presently conducted, none of the operation of the buildings, fixtures and other improvements comprising a part of the Properties is in violation of any applicable building code, zoning ordinance or other law or regulation, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect. Neither the Contributor nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened proceedings for the rezoning of any Property or portion thereof except for such notices or proceedings that would not, individually, or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

(d)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) to the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary nor any JV Entity, nor any other party to any Lease, has given or received any notice of default with respect to any term or condition of any such Lease, (ii) to the Contributor’s Knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of the Contributor, the Contributor’s Subsidiaries or the JV Entities, except for Permitted Liens, and (iii) each of the leases (and all amendments thereto or modifications thereof) to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which any Contributor, Contributor Subsidiary or JV Entity or any Property is bound or subject (collectively, the “Leases”) is and will be valid and binding and in full force and effect.

(e)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, each of the Leases to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which the Contributor, any Contributor Subsidiary, JV Entity or any Property is bound or subject, is in full force and effect, and constitutes the legal, valid and binding obligation of the Contributor or the applicable Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, enforceable against each Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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(f)          To the Contributor’s Knowledge, except as previously disclosed to the Company, no tenant under any such Lease is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings, except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.11         Insurance. The Contributor or the applicable Contributor Subsidiary or JV Entity has in place the public liability, casualty and other insurance coverage with respect to each Property as the Contributor reasonably deems necessary. Each of the insurance policies with respect to the Properties is in full force and effect in all material respects and none of the Contributor or the applicable Contributor Subsidiary or JV Entity is in default (in any material respect) under any such policies.

Section 4.12         Environmental Matters. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect (a) the Contributor Subsidiaries and the JV Entities are in compliance with all applicable Environmental Laws (b) neither the Contributor Subsidiaries nor any JV Entity have received within the past three years any written notice from any Governmental Authority or third party alleging that any Contributor Subsidiary, any JV Entity or any Property is not in compliance with applicable Environmental Laws, and (c) there has not been a release of a hazardous substance on any Property that would require investigation or remediation under applicable Environmental Laws. The representations and warranties contained in this Section 4.12 constitute the sole and exclusive representations and warranties made by the Contributor concerning environmental matters.

Section 4.13         Investment. The Stockholder acknowledges that the offering and issuance of the Company Shares to be acquired pursuant to this Contribution Agreement and the Merger Agreement are intended to be exempt from registration under the Securities Act and that the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Stockholder contained herein. In furtherance thereof, the Stockholder represents and warrants to the Company as follows:

(a)          The Stockholder is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act).

(b)          The Stockholder is acquiring the Company Shares solely for its own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof in violation of the securities Laws.

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(c)          The Stockholder acknowledges that the Company Shares have not been registered under the Securities Act and, therefore, may not be sold unless registered under the Securities Act or an exemption from registration is available.

Section 4.14         Broker. None of the Contributor, any Contributor Subsidiary, JV Entity, or any of their managing members, members, partners, general partners, officers directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Company, the Operating Partnership or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Contribution Agreement or other Formation Transactions.

Section 4.15         Eminent Domain. There is no existing or, to the Contributor’s Knowledge threatened, in writing condemnation, eminent domain or similar proceeding that would affect any of the Properties. Neither the Stockholder nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened condemnation, eminent domain or similar proceeding that would affect any of the Properties.

Section 4.16         Assets and Liabilities. Section 4.16 of the Contributor Disclosure Letter accurately sets forth, in all material respects, as of June 30, 2014 and September 30, 2014, (i) all outstanding indebtedness of the Contributor, the Contributor Subsidiaries and each JV Entity, (iii) all interest rate swap liabilities of such entities and (iii) the net amount of all other tangible assets and liabilities of such entities (other than deferred tax liabilities, if any, and their interests in the Properties), which consists of cash, cash equivalents, accounts receivable and accounts payable. Except for distributions set forth on Section 4.16 of the Contributor Disclosure Letter (“Permitted Distributions”) or as contemplated by this Contribution Agreement (“Permitted Activities”), since September 30, 2014, the Contributor has not (i) made any distributions or (ii) entered into any transactions with an Affiliate other than on an arm’s-length basis. Section 4.16 of the Contributor Disclosure Letter accurately sets forth all contributions made to the Contributor by its Stockholder since September 30, 2014.

Section 4.17         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article IV, the Contributor shall not be deemed to have made any other representation or warranty in connection with this Contribution Agreement or the transactions contemplated hereby.

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Article V

INDEMNIFICATION

Section 5.01         Company Indemnification. Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Company shall indemnify and hold harmless the Stockholder and its officers, employees, partners, members, agents, representatives and Affiliates (each of which is a “Contributor Indemnified Party”) from and against any and all charges, complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “Losses”) in excess of the greater of (i) 4.5% of the Company Cap or (ii) $250,000, in each case in the aggregate, arising out of or relating to, asserted against, imposed upon or incurred by a Contributor Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Company contained in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Company pursuant to the Transaction Agreements; provided, however, that the Company shall not have any obligation under this Section 5.01 to indemnify any Contributor Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Contributor’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud.

Section 5.02         Stockholder Indemnification.

(a)          Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Indemnity Holdback Amount shall be used to indemnify and hold harmless the Company, the Operating Partnership and each of their respective directors, officers, employees, agents, representatives and Affiliates (each of which is a “Company Indemnified Party”) from and against any and all Losses in excess of the greater of (i) 4.5% of the Indemnity Holdback Amount or (ii) $250,000, in each case in the aggregate (the “Deductible”), arising out of or relating to, asserted against, imposed upon or incurred by such Company Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Contributor or Stockholder in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Contributor or the Stockholder pursuant to the Transaction Agreements; provided, however, that the Stockholder shall not have any obligation under this Section 5.02 to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Company’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud; provided further, however, that, to the extent such Losses relate to breach of a representation, warranty or covenant of the Contributor regarding a Person or the assets and liabilities of a Person that the Company or the Operating Partnership has or acquires an interest in from a Person other than the Contributor, the indemnification pursuant to this Section 5.02 shall be limited to the portion of such Losses attributable to the interest acquired from the Contributor pursuant to this Contribution Agreement. The Stockholder hereby grants to the Company a security interest in the Company Shares held as the Indemnity Holdback Amount to secure the indemnification obligations set forth in this Section 5.02.

(b)          Any indemnification payment made by the Company to the Stockholder pursuant to the Transaction Agreements shall be made to such Stockholder in shares of Company Common Stock, the number of which shall equal the dollar value of the indemnification payment divided by the price of a share of Company Common Stock as of the close of market on the date of such indemnification payment.

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Section 5.03         Notice of Claims At the time when any Contributor Indemnified Party or Company Indemnified Party, as applicable, (as applicable, an “Indemnified Party”) learns of any potential claim (a “Claim”) under this Article V that is asserted against the Indemnified Party that is subject to indemnification by the Company or in respect of the Contributor from the Indemnity Holdback Amount, as applicable, under this Article V (as applicable, the “Indemnifying Party”), such Indemnified Party will promptly give written notice (a “Claim Notice”) to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative); provided that failure to do so shall not prevent recovery under this Contribution Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by Law, the Indemnified Party shall deliver to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to a Third Party Claim (defined below), and failure to do so shall prevent recovery under this Contribution Agreement to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.

Section 5.04         Third Party Claims. The Indemnifying Party (through the Stockholder’s Representative in the event the Indemnified Party is a Company Indemnified Party) shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties (“Third Party Claims”), through counsel chosen by the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), if it gives written notice of its intention to do so to the Indemnified Parties within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their expense provided, further, that if any such Third Party Claim relates to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, or seeks non-monetary damages or asserts damages in excess of the Indemnity Holdback Amount against a Company Indemnified Party, then, notwithstanding anything in this Contribution Agreement to the contrary, the Company (or a Subsidiary of the Company) shall have the right to control any such Third Party Claim. Without limiting the foregoing, in the event that the Indemnifying Party exercises the right to undertake any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party (unless prohibited by Law), at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the one hand, or the Indemnifying Party (or in the case of the Company Indemnified Parties, the Stockholder’s Representative), on the other hand, without the other’s consent (which shall not be unreasonably withheld or delayed) unless (a) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party and (b) each Indemnified Party that is party to such claim is released from all liability with respect to such claim; provided that the Stockholder’s Representative shall be deemed to have consented to any proposed compromise or settlement to which it has not objected to by written notice within 30 days after notice of such proposed compromise or settlement was provided by a Company Indemnified Party.

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Section 5.05         Survival of Representations and Warranties. All representations and warranties of the Contributor and the Company, as applicable, contained in this Contribution Agreement shall survive after the Closing until the first anniversary of the Contribution Closing Date (the “Expiration Date”). If written notice of a Claim in accordance with the provisions of Section 5.03 has been given prior to the Expiration Date, then the relevant representation and warranty shall survive, but only with respect to such specific Claim, until such Claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

Section 5.06         Establishment of Indemnity Holdback Escrow. On the Contribution Closing Date, the Company shall deposit the Indemnity Holdback Amount in accordance with the terms and conditions of the Escrow Agreement. The Company agrees that the security interest in the Company Shares may be released, or collateral may be substituted for such Company Shares, in accordance with the Escrow Agreement.

Section 5.07         Exclusive Remedy.

(a)          Except as set forth in Sections 2.07 and 6.05, the sole and exclusive remedy for Company Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Stockholder shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the Indemnity Holdback Amount.

(b)          Except as set forth in Section 6.04, the sole and exclusive remedy for Contributor Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Company shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the dollar amount obtained by multiplying the number of Company Shares included in the Indemnity Holdback Amount by the Price to the Public (the “Company Cap”).

Section 5.08         Tax Treatment. All indemnity payments made hereunder shall be treated as adjustments to the consideration paid hereunder for U.S. federal income tax purposes, unless otherwise required by applicable Laws.

Article VI

COVENANTS AND OTHER AGREEMENTS

Section 6.01         Covenants of the Contributor. From the date hereof through the Merger Closing, except as otherwise provided for or as contemplated by the Transaction Agreements, the Contributor shall and shall cause the Contributor Subsidiaries and JV Entities, to the extent the Contributor or the Contributor Subsidiaries control such JV Entities, to, use commercially reasonable efforts to conduct their business and operate and maintain the Properties in the ordinary course, consistent with past practices. In addition, the Contributor:

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(a)          will not make any distributions, other than Permitted Distributions;

(b)          except for Permitted Activities, will not enter into any transactions with an Affiliate other than on an arm’s-length basis;

(c)          will not sell, transfer or otherwise dispose of its Property Interests; and

(d)          will not mortgage, pledge, hypothecate, encumber (or permit to become encumbered) all or any portion of its Property Interests, except for Permitted Liens.

Section 6.02         Stockholder’s Representative. The Stockholder hereby appoints Dr. Thomas Finne as the representative for the Stockholder (the “Stockholder’s Representative”) and the Stockholder’s Representative shall have the authority to take the actions provided herein and receive notices on behalf of the Stockholder subsequent to the Merger Closing.

Section 6.03         Tax Covenants.

(a)          Each party hereto (i) shall cause all Tax Returns relating to the Contribution, Conversion and Merger to be filed on the basis of treating the Contribution, Conversion and Merger, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) shall not take any position on any Tax Return, or take any other reporting position, that is inconsistent with such treatment, unless otherwise required by applicable Laws.

(b)          The Contributor shall provide the Company with such reasonable cooperation and information relating to the Contributor, any Contributor Subsidiary and any JV Entity as the Company reasonably requires in (i) filing any Tax Return, amended Tax Return or claim for Tax refund, (ii) determining any liability for Taxes or a right to a Tax refund, (iii) conducting or defending any proceeding in respect of Taxes or (iv) performing Tax diligence, including with respect to the impact of the transactions contemplated herein on the Company’s qualification as a REIT for U.S. federal income Tax purposes and the qualification of the Contribution, Conversion and Merger, taken together, as a reorganization under Section 368(a) of the Code.

(c)          The Company shall be responsible for the prosecution of any claim or audit instituted after the Contribution Closing Date with respect to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, attributable to any taxable period, or portion thereof, ending on or before the Contribution Closing Date.

(d)          Following the Merger Closing, to the extent the Stockholder has provided a FIRPTA Notice pursuant to Section 2.01(b)(iv)(A) instead of cash sufficient to fund withholding pursuant to Section 2.01(b)(iv)(B), the Stockholder shall provide the Company with evidence satisfactory to the Company that the Stockholder has complied with the requirements of Temporary Treasury Regulations Section 1.897-5T(d)(1)(iii), as modified by IRS Notice 89-57 with respect to the transactions contemplated hereby.

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(e)          Within 20 days after the Closing, the Company shall submit to the Internal Revenue Service the FIRPTA notice provided to it by the Stockholder pursuant to Section 2.01(b)(iv), in accordance with the requirements of Treasury Regulation Section 1.1445-2(d)(2)(i)(B).

(f)          The Company shall (a) cause to be timely paid any New York City and New York State real property transfer taxes payable by the Contributor as a result of, or in connection with, the Contribution (collectively, the “New York Transfer Taxes”); provided, that the parties hereto acknowledge and agree that such amount of New York Transfer Taxes payable shall reflect the Company’s status as a REIT; and (b) timely and properly file, with the Contributor’s cooperation, all Tax returns with respect to such New York Transfer Taxes.

Section 6.04         Tax Protection Provisions.

(a)          With respect to the period commencing on, and including, the Effective Time and ending on, and including, December 31, 2014 (the “Covenant Period”), the Company shall not, and shall cause the Operating Partnership to not, both (x) incur, directly or indirectly, any gain from the sale or exchange of a U.S. real property interest (as described in Section 897(c) of the Code) and (y) distribute any such gain or any interest in U.S. real property  if the effect thereof would be to cause the Stockholder to be treated for U.S. federal income tax purposes, as recognizing “effectively connected income” as a result of the operation of Section 897 of the Code, solely as a result of such distribution, during a taxable year of the Stockholder ending on or before December 31, 2014, (“Prohibited Event”), provided, however, the Company shall not be deemed to have violated this undertaking to the extent the Prohibited Event was caused by an unaffiliated third party’s actions or exercise of its rights, including, without limitation, a third party’s exercise of buy-sell or forced sale rights, gain incurred by an entity not controlled by the Company or the Operating Partnership where the gain is allocated to the Company or the Operating Partnership as a result of its direct or indirect investment in the entity, or other similar event over which neither the Company nor the Operating Partnership would reasonably be expected to exercise control that results in a Prohibited Event (such covenant being referred to as the “No Gain Covenant”). The parties agree that the sole remedy for a violation of the No Gain Covenant shall be indemnification pursuant to, and subject to the conditions of, this Section 6.04 and, for the avoidance of doubt, not specific performance.  Accordingly, for example, the Company may make a distribution in violation of No Gain Covenant to the extent it reasonably determines such distribution is required for the Company to maintain its qualification as a REIT for U.S. federal income tax purposes; provided that, in connection with such distribution, the Company will be required to indemnify the Stockholder pursuant to, and subject to the conditions of, this Section 6.04.

(b)          If the Company becomes aware that a gain described in clause (x) of the first sentence of Section 6.04(a) is planned or scheduled to be incurred due to the actions or exercise of rights by an unaffiliated third party, the Company will use, and will cause the Operating Partnership to use, reasonable efforts to seek to have such third party delay the Prohibited Event until after the end of the Covenant Period; provided, however, that the Company shall not be required to incur any costs or expense in obtaining such delay but will permit the Stockholder to fund such costs and expenses if the Company or Operating Partnership is otherwise able through the use of its reasonable efforts to obtain such delay and, notwithstanding the occurrence of such Prohibited Event, the Company shall not, and shall cause the Operating Partnership to not, make a distribution with respect thereto, except to the extent it determines in good faith that such distribution is required for the Company to maintain its qualification as a REIT for U.S. federal income tax purposes.  

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(c)          If a Prohibited Event occurs in violation of the No Gain Covenant, the Stockholder agrees as follows: (w) if notified of the occurrence of such Prohibited Event, to make the filings required by Treasury Regulations Section 1.897-5T(d)(1)(iii) with its U.S. federal income tax return (or amended return) for the year in which the Effective Time occurs; (x) that such Stockholder will take the position for U.S. federal income tax purposes that notwithstanding the occurrence of such Prohibited Event, a subsequent disposition of Company Shares received in the Merger by such Stockholder is not subject to U.S. federal income tax (under Section 897 of the Code) if the Company Shares are not a “U.S. real property interest” with respect to such Stockholder at the time of the disposition (“No-Tax Position”) unless such Stockholder receives an opinion from a Big 4 accounting firm (or other mutually agreeable firm) that there is no substantial authority for asserting the No-Tax Position; (y) in the event the No-Tax Position is challenged by the Internal Revenue Service, the Stockholder will use reasonable best efforts to contest the challenge provided that the Company indemnifies, or causes the Operating Partnership to indemnify, for the Stockholder’s reasonable defense costs; and without limitation (z) otherwise to cooperate with the Company and/or Operating Partnership to mitigate any losses that may arise as a result of such Prohibited Event.

(d)          If a Prohibited Event occurs in violation of the No Gain Covenant, the Company will indemnify the Stockholder for the incremental net income tax liability actually incurred by such Stockholder as a result of such violation of the No Gain Covenant to the extent that (x) such violation causes the Stockholder’s receipt of Company Shares in the transactions contemplated herein or the Merger Agreement to be treated as a taxable exchange under Section 897 of the Code or (y) such breach causes gain from an actual sale or other disposition of Company Shares received in the transactions contemplated herein by the Stockholder to be taxed under Section 897 of the Code, provided, however, that (i) such Stockholder shall not be indemnified for any such tax liability under this Section 6.04 if such Stockholder breached a covenant in Section 6.04(c) and, (ii) for the avoidance of doubt, to the extent gain realized in the Merger or a disposition of Company Shares received in the Merger would be subject to U.S. federal income tax regardless of such violation of the No Gain Covenant, the Company will have no liability hereunder for such violation.

(e)          The indemnification notice and claim procedures set forth in Section 5.03 shall apply to the indemnification obligations set forth in this Section 6.04.

Section 6.05         Liability for Transfer Taxes.  The Stockholder agrees to indemnify the Company for any Incremental Transfer Taxes incurred as a result of any direct or indirect transfers of the Company Shares received in connection with the transactions contemplated hereby, or interests therein (other than the receipt of the Merger Consideration by the Stockholder pursuant to the Merger Agreement) within two years after the IPO Closing Date; provided that such Company Shares shall be the Company’s sole recourse with respect to such indemnification obligation. The Stockholder hereby grants a security interest in 50% of its Company Shares received in the Merger to the Company and hereby irrevocably appoints the Company, and any of its agents, officers, or employees as its attorney-in fact, which shall be deemed coupled with an interest, with full power to prepare, execute and deliver any documents, instruments and agreements as may be appropriate to perfect and continue such security interest in favor of the Company. The security interest granted pursuant to this Section 6.05 shall attach to the Company Shares that are not included in the Indemnity Holdback Amount. The Company agrees that the security interest in the Company Shares received by the Stockholder in the Merger may be released, or collateral may be substituted, in accordance with the terms of the Escrow Agreement.

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Section 6.06         Commercially Reasonable Efforts By the Company and the Contributor. Each of the Company and the Contributor shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Laws or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Contribution Agreement, and (b) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits or authorizations.

Article VII

GENERAL PROVISIONS

Section 7.01         Notices. All notices and other communications under the Transaction Agreements shall be in writing and shall be deemed given when (a) delivered personally, (b) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid, (c) one (1) Business Day after being sent by a nationally recognized overnight courier or (d) transmitted by facsimile if confirmed within 24 hours thereafter by a signed original sent in the manner provided in clause (a), (b) or (c) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such party):

(a) if to the Company to:

Paramount Group, Inc.
1633 Broadway, Suite 1801
New York, NY 10011
Facsimile: (212) 237-3197
Attention: General Counsel

(b) If to the Contributor, the Stockholder or the Stockholder’s Representative, to Arcade Rental Investments, Inc.

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG
Werner-Otto-Straße 1-7
D-22179 Hamburg, Germany
Attention: Thomas Armbrust
Fax: +49-40-6461-2960

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Section 7.02         Definitions. For purposes of this Contribution Agreement, the following terms shall have the following meanings:

(a)          “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(b)          “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.

(c)          “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.

(d)          “Company’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(e)          “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Company and the Operating Partnership and their Subsidiaries, taken as a whole, giving effect to the Formation Transactions and the IPO. For the avoidance of doubt, the Merger shall not be deemed a Company Material Adverse Effect.

(f)          “Contributor Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operation of the Contributor and the Contributor Subsidiaries, taken as a whole, including such entities’ direct and indirect interests in the JV Entities. For the avoidance of doubt, the Merger shall not be deemed a Contributor Material Adverse Effect.

(g)          “Contributor’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(h)          “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.

(i)           “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(j)          “Incremental Transfer Taxes” means any additional transfer taxes attributable to the transactions contemplated by this Agreement and the other Formation Transactions as a result of the failure of any such transaction to qualify as a "real estate investment trust transfer" under New York Tax Law section 1402 or under New York City Administrative Code section 11-2102 due to direct or indirect transfers of the Company Shares issued as Merger Consideration occurring within two years after the IPO Closing Date.

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(k)          “IPO Closing Date” means the closing date of the IPO.

(l)          “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority.

(m)          “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.

(n)           “Organizational Documents” means with respect to any entity, the certificate of formation, limited liability company agreement, or operating agreement, certificate of incorporation, bylaws, certificate of limited partnership, limited partnership agreement and any other governing instrument, as applicable, including, without limitation, in the case of the Contributor, the Limited Liability Company Operating Company Agreement of Arcade Rental Investments LLC.

(o)          “Permitted Liens” means (i) Liens for unpaid Taxes (other than statutory liens for Taxes not yet due and payable); (ii) zoning Laws generally applicable to the districts in which the Properties are located; (iii) easements for public utilities, encroachments, rights of access and/or other non-monetary matters that do not materially interfere with the use of the Properties; (iv) Liens securing Permitted Activities; (v) Liens arising in the ordinary course of business; (vii) Liens securing indebtedness outstanding as of September 30, 2014 or incurred on an arms’ length basis thereafter and (viii) any exceptions contained in the title policies relating to the Properties as of the Contribution Closing Date.

(p)          “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

(q)          “Price to the Public” means the public offering price of a share of Company Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the registration statement pursuant to which the shares of Company Common Stock offered in the IPO were registered under the Securities Act.

(r)          “Registration Statement” means the Company’s registration statement on Form S-11, as amended from time to time, as filed with the SEC.

(s)          “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(t)          “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another direct or indirect Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii) (A) 50% or more of the voting power of the voting capital stock or other equity interests, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.

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(u)          “Tax” (and, with its correlative meaning, “Taxes”) means any and all taxes, including any interest, penalties, or other additions to tax that may become payable in respect thereof, which taxes shall include, without limiting the generality of the foregoing, all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, unclaimed property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

(v)         “Tax Return” means any return, statement, schedule, declaration, claim for refund, report, document or form filed or required to be filed with respect to Taxes, including any amendment, attachment and supplement thereof.

Section 7.03         Counterparts. This Contribution Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. All counterparts shall collectively constitute one agreement (or amendment, as applicable). The exchange of counterparts of this Contribution Agreement among the parties by means of facsimile transmission or by electronic transmission (pdf) which shall contain authentic reproductions shall constitute a valid exchange of this Contribution Agreement and shall be binding upon the parties hereto.

Section 7.04         Entire Agreement; Third-Party Beneficiaries. The Transaction Agreements and the Escrow Agreement, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject matter of the Transaction Agreements. The Transaction Agreements are not intended to confer any rights or remedies on any Person other than the parties hereto.

Section 7.05         Governing Law. The Transaction Agreements shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Section 7.06         Assignment. The Transaction Agreements shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and thereto and their respective heirs, legal representatives, successors and assigns; provided, however, that the Transaction Agreements may not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Company may assign its rights and obligations hereunder and thereunder to an Affiliate. Notwithstanding the foregoing, the Transaction Agreements shall be assigned to Arcade LLC.

27

Section 7.07         Jurisdiction. The parties hereto hereby (a) submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York City, New York, with respect to any dispute arising out of the Transaction Agreements or any transaction contemplated hereby or thereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THE TRANSACTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.08         Dispute Resolution. The parties intend that this Section 7.08 will be valid, binding, enforceable, exclusive and irrevocable and that it shall survive any termination of the Transaction Agreements.

(a)          Upon any dispute, controversy or claim arising out of or relating to the Transaction Agreements or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 7.08(c) below without regard to any such 10-day negotiation period.

(b)          Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 7.08(a) above shall be submitted to final and binding arbitration in New York before one neutral and impartial arbitrator, in accordance with the Laws of the State of New York for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days following a demand for arbitration, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.

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(c)          Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under the Transaction Agreements. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

(d)          The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.

Section 7.09         Severability. Each provision of the Transaction Agreements will be interpreted so as to be effective and valid under applicable Laws, but if any provision is held invalid, illegal or unenforceable under applicable Laws in any jurisdiction, then such invalidity, illegality or unenforceability will not affect any other provision, and the Transaction Agreements, as applicable, will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein.

Section 7.10         Rules of Construction.

(a)          The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of the Transaction Agreements and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

(b)          The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to the Transaction Agreements as a whole and not to any particular provision of the Transaction Agreements, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of the Transaction Agreements unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in the Transaction Agreements, they shall be deemed to be followed by the words “without limitation.” All terms defined in the Transaction Agreements shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in the Transaction Agreements are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

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Section 7.11         Equitable Remedies. The parties agree that irreparable damage would occur to the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, in the event that any of the provisions of the Transaction Agreements were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, shall be entitled to an injunction or injunctions to prevent breaches of the Transaction Agreements by the other party and to enforce specifically the terms and provisions hereof in any federal or state court located in New York, this being in addition to any other remedy to which the parties entitled under the Transaction Agreements or otherwise at law or in equity.

Section 7.12         Time of the Essence. Time is of the essence with respect to all obligations under the Transaction Agreements.

Section 7.13         Descriptive Headings. The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of the Transaction Agreements.

Section 7.14         No Personal Liability Conferred. The Transaction Agreements shall not create or permit any personal liability or obligation on the part of any officer, director, partner, employee or shareholder of the Company, the Contributor or the Stockholder.

Section 7.15         Amendments. This Contribution Agreement may be amended by appropriate instrument, without the consent of the Contributor and the Stockholder, at any time prior to the Contribution Closing Date; provided, that no such amendment, modification or supplement shall be made that alters the amount or changes the form of the consideration to be delivered to the Contributor or the Stockholder.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Contribution Agreement to be signed by their respective duly authorized officers or representatives, all as of the date first written above.

PARAMOUNT GROUP, INC., a Maryland corporation
By:	/s/ David P. Spence
	Name: David P. Spence
	Title: Senior Vice President

ARCADE RENTAL INVESTMENTS, INC., a Delaware corporation
By:	/s/ Thomas Armbrust
	Name: Thomas Armbrust
	Title: President

[Signature Page to Arcade Contribution Agreement]

STOCKHOLDER:

AROSA Vermoegensverwaltungsgesellschaft m.b.H., a German limited liability company

By: Thomas Armbrust and Dr. Thomas Finne,  individuals

Its:  Managing Directors

/s/ Thomas Armbrust

/s/ Dr. Thomas Finne

[Signature Page to Arcade Contribution Agreement]

EXHIBIT A

List of Properties

[See attached]

A-1

EXHIBIT B

Certificate of Conversion

[See attached]

B-1

EXHIBIT C

Certificate of Formation

[See attached]

C-1

EXHIBIT D

Agreement and Plan of Merger

[See attached]

D-1

EXHIBIT E

Escrow Agreement

[See attached]

E-1

EXHIBIT F

Lock-up Agreement

[See attached]

F-1

EXHIBIT G

Assignment and Assumption Agreement

[See attached]

G-1

SCHEDULE 1.01

Excluded Assets

All of the interests in Kommanditgesellschaft Grundstücksgesellschaft EKZ Schwedt m.b.H. & Co. held by Arcade

Schedule 1.01

SCHEDULE 1.02

Consideration

Arcade

Consideration

456,362 Company Shares

 Schedule 1.02

EX-99.7

Exhibit 7

CONTRIBUTION AGREEMENT

by and among

Arcade Rental Investments 2, Inc.,

paramount group, inc.,

and

The Stockholder

of

arcade rental investments 2, inc.

Dated as of November 6, 2014

TABLE OF CONTENTS

		Page
Article I CONTRIBUTION; CONVERSION; MERGER		2
Section 1.01	Contribution Transaction; Assignment and Assumption	2
Section 1.02	Consideration	3
Section 1.03	Further Action	3
Section 1.04	Transaction Costs	3
Section 1.05	Prorations	3
Section 1.06	Tax Treatment of Contribution, Conversion and Merger	3
Article II CLOSING		4
Section 2.01	Conditions Precedent	4
Section 2.02	Time and Place	6
Section 2.03	Closing Deliveries	7
Section 2.04	Transfer Costs	7
Section 2.05	Term of the Agreement	7
Section 2.06	Effect of Termination	7
Section 2.07	Tax Withholding	7
Section 2.08	Merger	8
Article III REPRESENTATIONS AND WARRANTIES  OF THE COMPANY		8
Section 3.01	Organization; Authority	8
Section 3.02	Due Authorization	8
Section 3.03	Consents and Approvals	9
Section 3.04	Tax Matters	9
Section 3.05	No Violation	9
Section 3.06	Validity of Company Shares	9
Section 3.07	Litigation	9
Section 3.08	Limited Activities	9
Section 3.09	Broker	10
Section 3.10	No Other Representations or Warranties	10
Article IV REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR		10
Section 4.01	Organization; Authority	10
Section 4.02	Due Authorization	11
Section 4.03	Ownership of Contributed Interests; Capitalization	11
Section 4.04	Consents and Approvals	12
Section 4.05	Taxes	12
Section 4.06	No Violation	13
Section 4.07	Solvency	13
Section 4.08	Litigation	14
Section 4.09	Licenses and Permits	14
Section 4.10	Properties	14
Section 4.11	Insurance	16
Section 4.12	Environmental Matters	16

i

Section 4.13	Investment	16
Section 4.14	Broker	17
Section 4.15	Eminent Domain	17
Section 4.16	Assets and Liabilities	17
Section 4.17	No Other Representations or Warranties	17
Article V INDEMNIFICATION		18
Section 5.01	Company Indemnification	18
Section 5.02	Stockholder Indemnification	18
Section 5.03	Notice of Claims	19
Section 5.04	Third Party Claims	19
Section 5.05	Survival of Representations and Warranties	20
Section 5.06	Establishment of Indemnity Holdback Escrow	20
Section 5.07	Exclusive Remedy	20
Section 5.08	Tax Treatment	20
Article VI COVENANTS AND OTHER AGREEMENTS		20
Section 6.01	Covenants of the Contributor	20
Section 6.02	Stockholder’s Representative	21
Section 6.03	Tax Covenants	21
Section 6.04	Tax Protection Provisions	22
Section 6.05	Liability for Transfer Taxes	22
Section 6.06	Commercially Reasonable Efforts By the Company and the Contributor	22
Article VII GENERAL PROVISIONS		23
Section 7.01	Notices	23
Section 7.02	Definitions	23
Section 7.03	Counterparts	26
Section 7.04	Entire Agreement; Third-Party Beneficiaries	26
Section 7.05	Governing Law	26
Section 7.06	Assignment	26
Section 7.07	Jurisdiction	26
Section 7.08	Dispute Resolution	27
Section 7.09	Severability	28
Section 7.10	Rules of Construction	28
Section 7.11	Equitable Remedies	28
Section 7.12	Time of the Essence	29
Section 7.13	Descriptive Headings	29
Section 7.14	No Personal Liability Conferred	29
Section 7.15	Amendments	29

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EXHIBITS
Exhibit A	List of Properties
Exhibit B	Certificate of Conversion
Exhibit C	Certificate of Formation
Exhibit D	Agreement and Plan of Merger
Exhibit E	Escrow Agreement
Exhibit F	Lock-up Agreement
Exhibit G	Assignment and Assumption Agreement
SCHEDULES
Schedule 1.01	Excluded Assets
Schedule 1.02	Consideration

iii

DEFINED TERMS

Affiliate	Section 7.02
Arcade 2	Introduction
Arcade 2 LLC	Introduction
Assignment and Assumption Agreement	Section 1.01
Business Day	Section 7.02
Certificate of Conversion	Recitals
Certificate of Formation	Recitals
Claim	Section 5.03
Claim Notice	Section 5.03
Closing Documents	Section 2.03
Code	Section 7.02
Company	Introduction
Company Cap	Section 5.07
Company Common Stock	Recitals
Company Indemnified Party	Section 5.02
Company’s Knowledge	Section 7.02
Company Material Adverse Effect	Section 7.02
Company Shares	Recitals
Contributed Interests	Recitals
Contribution	Recitals
Contribution Agreement	Introduction
Contribution Closing	Section 2.02
Contribution Closing Date	Section 2.02
Contributor	Introduction
Contributor Disclosure Letter	Article IV
Contributor Indemnified Party	Section 5.01
Contributor Material Adverse Effect	Section 7.02
Contributor Subsidiary	Section 4.01
Contributor’s Knowledge	Section 7.02
Conversion	Recitals
Deductible	Section 5.01
Dispute	Section 7.08
DSOS	Recitals
Environmental Laws	Section 7.02
Equity Holder	Recitals
Escrow Agreement	Recitals
Excluded Assets	Section 1.01
Expiration Date	Section 5.05
Formation Transactions	Recitals
Governmental Authority	Section 7.02
Incremental Transfer Taxes	Section 7.02
Indemnified Party	Section 5.03
Indemnifying Party	Section 5.03
Indemnity Holdback Amount	Recitals

iv

IPO	Recitals
IPO Closing	Section 2.02
IPO Closing Date	Section 7.02
JV Entities	Section 4.01
Laws	Section 7.02
Leases	Section 4.10
Liens	Section 7.02
Lock-up Agreement	Recitals
Losses	Section 5.01
Merger	Recitals
Merger Agreement	Recitals
New York Transfer Taxes	Section 6.03
Operating Partnership	Recitals
Organizational Documents	Section 7.02
Outside Date	Section 2.05
Permitted Activities	Section 4.16
Permitted Distribution	Section 4.16
Permitted Liens	Section 7.02
Person	Section 7.02
PGI	Section 6.04
PGI Merger Agreement	Section 6.04
Price to the Public	Section 7.02
Properties	Recitals
Property	Recitals
Property Interests	Recitals
Registration Rights Agreement	Recitals
Registration Statement	Section 7.02
REIT	Recitals
SEC	Section 2.01
Securities Act	Section 7.02
Stockholder’s Representative	Section 6.02
Subsidiary	Section 7.02
Surviving Entity	Recitals
Tax	Section 7.02
Tax Return	Section 7.02
Third Party Claims	Section 5.04
Transaction Agreements	Recitals

v

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (including all exhibits and schedules, this “Contribution Agreement”) is made and entered into as of November 6, 2014, by and between PARAMOUNT GROUP, INC., a Maryland corporation (the “Company”), ARCADE RENTAL INVESTMENTS 2, INC., a Delaware corporation (the “Contributor” or “Arcade 2”), and the stockholder whose name appears on the signature page hereto (the “Stockholder”). Unless otherwise specifically stated herein or the context otherwise requires, the terms “Contributor” and “Arcade 2” refer to Arcade 2 and its Subsidiaries with respect to the period prior to the Conversion and to Arcade Rental Investments 2 LLC, a Delaware limited liability company (“Arcade 2 LLC”), and its Subsidiaries with respect to the period from and after the Conversion. After the Conversion, all references to the term “Stockholder” shall mean the “Equity Holder.” Capitalized terms used and not defined in the body of this Contribution Agreement shall have the meanings set forth in Section 7.02 hereto.

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of the common stock, par value $0.01 per share (“Company Common Stock”), of the Company, which will operate as a self-administered and self-managed real estate investment trust (“REIT”) within the meaning of Sections 856 through 860 of the Code;

WHEREAS, in connection with the IPO, the Company, which is the sole general partner of Paramount Group Operating Partnership LP (the “Operating Partnership”), desires to engage in a series of transactions through which the Company and the Operating Partnership will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (collectively, the “Formation Transactions”);

WHEREAS, the Contributor owns, directly or indirectly, interests (the “Property Interests”) in the properties set forth on Exhibit A hereto, under the heading “Arcade 2” (each, a “Property” and together the “Properties”);

WHEREAS, as part of the Formation Transactions, pursuant to this Contribution Agreement, the Contributor shall contribute (the “Contribution”) to the Company all of its assets (other than Excluded Assets) and liabilities (the “Contributed Interests”) and the Company shall acquire from the Contributor all of the Contributor’s right, title and interest in the Contributed Interests in exchange for shares of Company Common Stock;

WHEREAS, the board of directors of the Contributor and the Stockholder have approved, subject to, and following the Contribution Closing, the conversion of the Contributor from a Delaware corporation to a Delaware limited liability company (the “Conversion”);

WHEREAS, following the Contribution Closing, the Company on behalf of the Contributor will file a Certificate of Conversion with the Secretary of State of the State of Delaware (the “DSOS”), a copy of which is attached hereto as Exhibit B (the “Certificate of Conversion”), and a Certificate of Formation, a copy of which is attached hereto as Exhibit C (the “Certificate of Formation”), in order to effectuate the Conversion;

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WHEREAS, following the effective time of the Conversion, pursuant to the Agreement and Plan of Merger attached hereto as Exhibit D (the “Merger Agreement” and together with this Contribution Agreement, the “Transaction Agreements”), Arcade 2 LLC will merge with and into the Company (the “Merger”) with the Company as the surviving entity (sometimes referred to as the “Surviving Entity”) and in consideration thereof the Stockholder, which will be the sole equity holder of Arcade 2 LLC (in such capacity, the “Equity Holder”), will receive shares of Company Common Stock (the “Company Shares”) in accordance with the terms and conditions set forth in the Merger Agreement;

WHEREAS, at the Merger Closing, the Stockholder acknowledges that the Company will deposit the number of Company Shares set forth on Schedule 1.07 of the Merger Agreement under the heading “Arcade 2 LLC” as the Indemnity Holdback Amount, which represents approximately 1.5% of the Merger Consideration (collectively, the “Indemnity Holdback Amount”), into an Indemnity Holdback Escrow (as defined in the Escrow Agreement) pursuant to that certain Omnibus Distribution and Escrow Agent Agreement, a copy of which is attached hereto as Exhibit E (the “Escrow Agreement”), in order to provide for the exclusive remedy against the Stockholder (in its capacity as such) for any breaches of the Transaction Agreements by the Stockholder;

WHEREAS, concurrently with the execution of this Contribution Agreement, the Stockholder has executed and delivered a lock-up agreement to the underwriters of the IPO, a copy of which is attached as Exhibit F hereto (the “Lock-up Agreement”);

WHEREAS, concurrently with the execution of this Contribution Agreement, the Company has entered into a registration rights agreement with the Stockholder (the “Registration Rights Agreement”); and

WHEREAS, prior to or concurrently with the execution of this Contribution Agreement, the Company or the Operating Partnership, as the case may be, together with the applicable counterparties have entered into the Formation Transaction Documentation.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Contribution Agreement, the receipt and sufficiency of which is hereby acknowledged and agreed, the parties hereto, intending to be legally bound hereby, agree as follows:

Article I

CONTRIBUTION; CONVERSION; MERGER

Section 1.01         Contribution Transaction; Assignment and Assumption.

(a)          At the Closing and subject to the terms and conditions contained in this Contribution Agreement, the Contributor shall contribute, assign, set over, deliver and transfer to the Company absolutely and unconditionally and free and clear of all Liens (other than Permitted Liens), all of its right, title and interest in and to the Contributed Interests, including all rights to indemnification in favor of the Contributor under the agreements pursuant to which the Contributor acquired the Contributed Interests transferred pursuant to this Contribution Agreement. The contribution of the Contributed Interests shall be evidenced by the execution and delivery of an Assignment and Assumption Agreement in substantially the form of Exhibit G attached hereto and incorporated herein by reference (the “Assignment and Assumption Agreement”).

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(b)          Notwithstanding anything in Section 1.01(a) to the contrary, the Contributor shall not contribute, assign, set over, deliver or transfer any of Contributor’s right, title and interest to any assets of the Contributor set forth in Schedule 1.01 under the heading “Arcade 2” (“Excluded Assets”).

Section 1.02         Consideration. At the Contribution Closing, subject to the terms and conditions in this Contribution Agreement, in exchange for the transfer of the Contributed Interests, the Company shall issue to the Contributor the number of Company Shares set forth on Schedule 1.02 under the heading “Arcade 2”. No fractional Company Shares shall be issued to the Contributor pursuant to this Agreement. If aggregating all Company Shares that the Contributor otherwise would be entitled to receive pursuant to this Agreement would require the issuance of a fractional Company Share, the Contributor shall instead be entitled to receive one full Company Share in lieu of such fractional Company Share.

Section 1.03         Further Action. If, at any time after the Contribution Closing, the Company shall determine or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Entity the right, title or interest in, to or under any of the rights, properties or assets of the Contributor acquired or to be acquired by the Company as a result of, or in connection with, the Contribution or otherwise to carry out this Contribution Agreement, the Company shall be authorized to execute and deliver, in the name and on behalf of the Contributor, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of the Contributor, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Company or otherwise to carry out this Contribution Agreement.

Section 1.04         Transaction Costs. Subject to Section 6.05, if the Contribution Closing occurs, the Company shall be solely responsible for all transaction costs and expenses of the Company and the Contributor that have not previously been paid in connection with this Contribution Agreement, which include, but are not limited to, lender consent fees, legal, accounting and consultant fees.

Section 1.05         Prorations. There shall be no prorations at the Contribution Closing for any income and expense items with respect to the Properties.

Section 1.06         Tax Treatment of Contribution, Conversion and Merger. It is intended that, for U.S. federal income tax purposes, that the Contribution, Conversion and Merger shall, taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Contribution Agreement and the Merger Agreement constitutes, and hereby is adopted as, a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3.

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Article II

CLOSING

Section 2.01         Conditions Precedent.

(a)          Condition to Each Party’s Obligations. The respective obligation of each party to effect the contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date is subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

(i)          Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by the Securities and Exchange Commission (“SEC”) seeking a stop order. This condition may not be waived by any party.

(ii)         IPO Proceeds. The Company shall have received, or have the right to receive, substantially concurrently with the Contribution Closing and the Merger Closing, the proceeds from the IPO. This condition may not be waived by any party.

(iii)        Merger. The Company, the Contributor and the Stockholder will agree that, except for filings with the DSOS in order to effectuate the Conversion, any conditions to closing the Merger, other than effecting the Conversion, have been irrevocably satisfied or waived at or prior to the Contribution Closing. This condition may not be waived by any party.

(iv)        No Injunction. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated by the Transaction Agreements nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending that seeks the foregoing.

(b)           Conditions to Obligations of the Company. The obligation of the Company to effect the Contribution contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Company in whole or in part):

(i)          Representations and Warranties. (i) The representations and warranties of the Contributor set forth in Section 4.16 shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing, (ii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is qualified by materiality or Contributor Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (iii) each representation and warranty of the Contributor contained in this Contribution Agreement (other than in Section 4.16) that is not qualified by materiality or Contributor Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Contributor Material Adverse Effect.

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(ii)         Performance by the Contributor. The Contributor shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Contributor and the Stockholder to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of the Contributor to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        FIRPTA Affidavit.     The Contributor shall have provided the Company with a properly executed FIRPTA certificate substantially in the form set forth in Treasury Regulation Section 1.1445-2(b)(2) providing that the Contributor is not a “foreign person” and the Stockholder shall have (A) provided the Company with a properly executed FIRPTA certificate in accordance substantially with the form set forth in Treasury Regulation Section 1.1445-2(d)(2) sufficient to avoid any withholding under Section 1445 of the Code or (B) provided cash (in such amount as determined by the Company in its reasonable discretion) to the Company sufficient to pay any applicable withholding under the Code.

(v)         Closing Documents.     The Contributor shall have executed and delivered to the Company the documents to which it is a party which are required to be delivered pursuant to Section 2.03.

(c)          Conditions to Obligations of the Contributor. The obligation of the Contributor to effect the Contribution contemplated by this Contribution Agreement and to consummate the other transactions contemplated hereby to occur on the Contribution Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Contributor in whole or in part):

(i)          Representations and Warranties. (i) Each representation and warranty of the Company contained in this Contribution Agreement that is qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), and (ii) each representation and warranty of the Company contained in this Contribution Agreement that is not qualified by materiality or Company Material Adverse Effect shall be true and correct as of the date of this Contribution Agreement, as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Company Material Adverse Effect.

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(ii)         Performance by the Company. The Company shall have performed in all material respects all agreements and covenants required by the Transaction Agreements to be performed or complied with by it on or prior to the Contribution Closing Date.

(iii)        Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Company to consummate the transactions contemplated by the Transaction Agreements (except for those the absence of which would not have a material adverse effect on the ability of any of the Company to consummate the transactions contemplated by the Transaction Agreements) shall have been obtained.

(iv)        Price to the Public. The Contributor shall have approved the Price to the Public.

(v)         Closing Documents. The Company shall have executed and delivered to the Contributor the documents required to be delivered pursuant to Section 2.03.

Section 2.02         Time and Place. Unless this Contribution Agreement shall have been terminated pursuant to Section 2.05, and subject to satisfaction or waiver of the conditions in Section 2.01, the closing of the transfer contemplated by Section 1.01 and the other transactions contemplated hereby (the “Contribution Closing” or the “Contribution Closing Date”) shall occur prior to the Conversion and the Conversion shall occur prior to the Merger Closing and concurrently with the closing of the IPO (the “IPO Closing”), or up to one (1) day prior to, but conditioned upon the subsequent occurrence of the Merger Closing and the IPO Closing. The Closing shall take place at the offices of Goodwin Procter llp, 620 Eighth Avenue, New York, NY 10018 or such other place as determined by the Company in its sole discretion. In connection with the foregoing, the parties hereto hereby agree that the specific order in which the Contribution Closing, the Merger Closing, the IPO Closing and the closing of the other transactions that are part of or related to the Formation Transactions occur shall be as determined by the Company, provided, however, that the Contribution Closing shall precede the Conversion, and the Conversion shall precede the Merger Closing.

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Section 2.03         Closing Deliveries. On the Contribution Closing Date, each of the parties shall make, execute, acknowledge and deliver the legal documents and other items to which it is a party or for which it is otherwise responsible that are necessary to carry out the intention of this Contribution Agreement and the other transactions contemplated to take place in connection therewith (collectively, the “Closing Documents”). The Closing Documents and other items to be delivered at the Contribution Closing shall be the following:

(a)          the Assignment and Assumption Agreement; and

(b)          an executed Certificate of Conversion and Certificate of Formation.

Section 2.04         Transfer Costs. Subject to Section 6.05, the Company shall pay any documentary transfer taxes, escrow charges, title charges and recording taxes or fees incurred by the Company or the Contributor in connection with the transactions contemplated hereby.

Section 2.05         Term of the Agreement. The Transaction Agreements shall terminate automatically if the transactions contemplated by the Transaction Agreements shall not have been consummated on or prior to March 31, 2015 (such date is hereinafter referred to as the “Outside Date”). In addition, the Transaction Agreements may be terminated before the Contribution Closing by a document signed by the Company and the Contributor.

Section 2.06         Effect of Termination. In the event of termination of the Transaction Agreements for any reason, all obligations on the part of the Company and the Contributor and the Stockholder under the Transaction Agreements shall terminate, except that the obligations set forth in Article VII shall survive, it being understood and agreed, however, for the avoidance of doubt, that if the Transaction Agreements are terminated because one or more of the conditions to the non-breaching party’s obligations under this Contribution Agreement are not satisfied by the Outside Date as a result of the other party’s material breach of a covenant, representation, warranty or other obligation under the Transaction Agreements, the non-breaching party’s right to pursue all legal remedies with respect to such breach will survive such termination unimpaired.

Section 2.07         Tax Withholding. The Company shall be entitled to deduct and withhold, or cause to be deducted and withheld, from the consideration payable (or deemed payable) as a result of the transactions contemplated by the Transaction Agreements, including the Indemnity Holdback Amount, to the Contributor, or the Stockholder, as applicable, such amounts as the Company is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or non-U.S. tax law (as determined by the Company in its reasonable discretion). To the extent that amounts are so deducted and withheld by the Company, such amounts shall be treated for all purposes of the Transaction Agreements as having been paid to the Contributor, or the Stockholder, as applicable. The Contributor or the Stockholder, as applicable, shall (A) to the extent requested by Arcade 2, contribute cash prior to the Contribution and Merger equal to (i) any withholding Taxes that would otherwise be required to be withheld by the Company in connection with the Contribution and Merger (taking into account any gross-up attributable to such amounts) and (ii) any withholding Taxes that Arcade 2 failed to withhold with respect to distributions to the Stockholder prior to the Closing and (B) indemnify and hold harmless the Company for any withholding Taxes relating to the Company’s failure to withhold from the Contributor or the Stockholder, as applicable, as required by applicable Laws, and for any Taxes of the Contributor (including those described in subclause (A)(ii) above), other than Taxes attributable to the Company’s breach of its covenants in Section 6.03(f) or Section 6.04, provided, however, that, in either case, neither the Contributor nor the Stockholder, as applicable, shall be liable for any penalties that may become payable in respect thereof, and provided further that, for the avoidance of doubt, the indemnification obligation of the Stockholder pursuant to this clause (B) shall neither be limited to the Indemnity Holdback Amount nor subject to the Deductible.

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Section 2.08         Merger.

(a)          Immediately following the Contribution Closing, the Contributor and the Stockholder agree that the Company shall take all actions to file, or cause to be filed, the Certificate of Conversion and the Certificate of Formation, at the Contributor’s sole cost and expense, with the DSOS. The parties agree and acknowledge that the closing of the Merger is conditioned upon the closing of the Contribution and the effectiveness of the Conversion.

(b)          Immediately following the completion of the Conversion, the Company, Arcade 2 LLC, and the Equity Holder shall execute and deliver the Merger Agreement and close the Merger in accordance with the terms and conditions of the Merger Agreement.

Article III

REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company hereby represents and warrants to the Contributor as set forth below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 3.01         Organization; Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Maryland. The Company has all requisite power and authority to enter into the Transaction Agreements and all agreements contemplated thereby to which it is party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Company have been duly and validly authorized by all necessary action of the Company. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Company pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Company, each enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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Section 3.03         Consents and Approvals. Except in connection with the IPO and the consummation of the Formation Transactions or as shall have been obtained on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Company in connection with the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby, including, without limitation, the Merger, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.04         Tax Matters. At the effective time of the IPO and at the Contribution Closing and at the effective time of the Merger, the Company shall be organized in a manner so as to qualify for taxation as a REIT pursuant to Sections 856 through 860 of the Code. The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes commencing with its taxable year ending December 31 of the year in which the Contribution Closing takes place.

Section 3.05         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated by the Transaction Agreements between the parties to the Transaction Agreements and the transactions contemplated thereby between the parties to the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation, or other right under, (a) the Organizational Documents of the Company, (b) any agreement, document or instrument to which the Company is a party or by which the Company is bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Company (or its assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.06         Validity of Company Shares. The Company Shares, when issued and delivered pursuant to the terms of the Transaction Agreements, will be duly authorized by the Company and will be validly issued by the Company, free and clear of all Liens created by the Company (other than Liens created by the charter of the Company, the Escrow Agreement, the Lock-up Agreement or the Transaction Agreements).

Section 3.07         Litigation. There is no action, suit or proceeding pending or, to the Company’s Knowledge, threatened against the Company, the Operating Partnership or any of their Subsidiaries which is reasonably expected to have a Company Material Adverse Effect, or which challenges or impairs the ability of the Company to execute or deliver, or perform its obligations under, the Transaction Agreements and the documents executed by it pursuant to the Transaction Agreements or to consummate the transactions contemplated thereby.

Section 3.08         Limited Activities. Except for activities in connection with the IPO or the Formation Transactions or in the ordinary course of business, the Company and the Operating Partnership and their Subsidiaries have not engaged in any material business or incurred any material obligations.

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Section 3.09         Broker. None of the Company or the Operating Partnership or any of their members, partners, general partners, officers, directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Contributor to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by the Transaction Agreements.

Section 3.10         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article III, the Company shall not be deemed to have made any other representation or warranty in connection with the Transaction Agreements or the transactions contemplated thereby.

Article IV

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR

Except as disclosed in the disclosure letter delivered to the Company by the Contributor on the date hereof (the “Contributor Disclosure Letter”), the Contributor hereby represents and warrants to the Company as set forth below, and the Stockholder hereby represents and warrants to the Company as set forth in Section 4.13 below, which representations are true and correct as of the date hereof (or such other date specifically set forth below) and as of the Contribution Closing as if made again at that time (except to the extent that any representation or warranty only speaks as of an earlier date, in which case it is true and correct as of the earlier date):

Section 4.01         Organization; Authority.

(a)          The Contributor is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(b)          Following the Conversion, the Contributor will be a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware and will have all requisite power and authority to enter into the Transaction Agreements, each agreement contemplated hereby to which it is a party and to carry out the transactions contemplated by the Transaction Agreements, and to own, lease or operate its assets and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than in such jurisdictions where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

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(c)          Section 4.01(b) of the Contributor Disclosure Letter, sets forth as of the date hereof, with respect to the Contributor, (i) the name and the jurisdiction of organization or incorporation, as the case may be, of each Subsidiary of the Contributor (“Contributor Subsidiary”) and (ii) the ownership interest of the Contributor or other Contributor Subsidiary in each such Contributor Subsidiary. Each Contributor Subsidiary has been duly organized or formed and is validly existing under the laws of its jurisdiction of organization or formation, as applicable, has all power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a Contributor Material Adverse Effect.

(d)          The Contributor or Contributor Subsidiaries own the equity interests in the Persons set forth on Section 4.01(d) of the Contributor Disclosure Letter (together with the Subsidiaries of such Persons, the “JV Entities”) in the stated percentage set forth on Section 4.01(d) of the Contributor Disclosure Letter.

(e)          The Contributor has made available to the Company a complete and correct copy of the operating agreement for Arcade 2 LLC, which will be executed immediately following completion of the Conversion by the Stockholder, which will be the sole Equity Holder of Arcade 2 LLC.

Section 4.02         Due Authorization. The execution, delivery and performance of the Transaction Agreements by the Contributor and the Stockholder have been duly and validly authorized by all necessary action required of the Contributor and the Stockholder, respectively. The Transaction Agreements and each agreement, document and instrument executed and delivered by or on behalf of the Contributor and the Stockholder pursuant to the Transaction Agreements constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Contributor and the Stockholder, each enforceable against the Contributor and the Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 4.03         Ownership of Contributed Interests; Capitalization.

(a)          The Contributor is the owner of the Contributed Interests and has the power and authority to transfer, sell, assign and convey to the Company the Contributed Interests free and clear of any Liens (other than Permitted Liens) and, upon delivery of the consideration for the Contributed Interests as provided herein, the Company will acquire good and valid title thereto, free and clear of any Liens (other than Permitted Liens). Except as provided for or contemplated by this Contribution Agreement or any other agreements referenced herein, there are no, and, as of the Contribution Closing, there will not be any rights, subscriptions, warrants, options, conversion rights, preemptive rights, agreements, instruments or understandings of any kind outstanding entitling any Person to acquire any equity interests in the Contributor Subsidiaries or JV Entities, except pursuant to Permitted Liens or rights established pursuant to the terms of the Organizational Documents and related agreements with respect to the Contributor Subsidiaries and JV Entities that have been previously disclosed to the Company.

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(b)          The sole stockholder of Arcade 2 is the Stockholder. Following the Conversion, the sole equity holder of Arcade 2 LLC entitled to receive the Merger Consideration pursuant to the Merger Agreement, subject to the Indemnity Holdback Amount, will be the Stockholder.

Section 4.04         Consents and Approvals. Except as shall have been satisfied on or prior to the Contribution Closing Date, no consent, waiver, approval or authorization of, or filing with, any Person or Governmental Authority or under any applicable Laws is required to be obtained by the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder in connection with the execution, delivery and performance of the Transaction Agreements, and the transactions contemplated by the Transaction Agreements, except for those consents, waivers, approvals, authorizations or filings, the failure of which to obtain or to file would not have a Contributor Material Adverse Effect.

Section 4.05         Taxes.

(a)          The Contributor and each Contributor Subsidiary and JV Entity has timely filed, or will timely file, all Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) in accordance with all applicable Laws. All such Tax Returns are correct and complete in all material respects, and the Contributor and each Contributor Subsidiary and JV Entity has paid (or had paid on its behalf) all Taxes required to be paid by it (whether or not shown on such Tax Returns), and no deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Contributor or any Contributor Subsidiary or JV Entity, and no requests for waivers of the time to assess any such Taxes are pending and no such waivers have been granted.

(b)          There are no Liens as a result of any unpaid Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or property of the Contributor, any Contributor Subsidiary or any JV Entity.

(c)          Except as would not reasonably be expected to have a Contributor Material Adverse Effect, there are no pending or, to the Contributor’s Knowledge, threatened audits, assessments or other actions for or relating to a liability in respect of income or non-income Taxes of the Contributor, any Contributor Subsidiary or any JV Entity.

(d)          The Contributor has entered into this Agreement for good and valid business reasons.

(e)          The Stockholder has no plan or intention to sell, exchange or transfer equity interests in Arcade 2 LLC or stock in the Contributor for consideration other than Company Common Stock, in contemplation of the Contribution or Merger, to the Company (or any party related to the Company) or sell, exchange or transfer any Company Common Stock received in the Merger to the Company (or any party related to the Company).

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(f)          The Contributor has not agreed to assume, nor will assume, directly or indirectly, any expense or other liability, whether fixed or contingent, of the Stockholder in connection with or as part of the Merger or any related transaction.

(g)          No part of the Company Common Stock issued pursuant to this Agreement or the Merger Consideration will be received by the Stockholder as a creditor, employee or in any capacity other than as an equity holder in Arcade 2 LLC or stockholder of Arcade 2.

(h)          The Contributor is a “United States real property holding corporation” for U.S. federal income tax purposes.

(i)          The Contributor holds cash or cash equivalents (excluding any cash or cash equivalents taken into account in the net amount of tangible assets and liabilities set forth in Section 4.16 of the Disclosure Letter) in an amount that is at least equal to the unpaid Taxes owed by it for all taxable periods ending on or prior to the Contribution Closing Date.

(j)          None of the Contributor or any Contributor Subsidiary is or ever has been a party to or bound by, or could have any liability under, any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement (other than commercial agreements entered into in the ordinary course of business, the principal purpose of which is not related to Taxes).

(k)          None of the Contributor or any Contributor Subsidiary has any liability for Taxes of any person arising from the application of Treasury Regulations Section 1.1502-6 or any analogous provision of state, local or foreign law (other than in respect of being a member of a consolidated group the common parent of which is the Contributor), or as a transferee or successor.

Section 4.06         No Violation. None of the execution, delivery or performance of the Transaction Agreements, any agreement contemplated thereby between the parties to the Transaction Agreements and the transactions contemplated by the Transaction Agreements, does or will, with or without the giving of notice, lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination, acceleration, cancellation or other right under, (a) the Organizational Documents of the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder, (b) any agreement, document or instrument to which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder is a party or by which the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder are bound or (c) any term or provision of any judgment, order, writ, injunction, or decree binding on the Contributor, any Contributor Subsidiary, any JV Entity or the Stockholder (or their assets or properties), except, in the case of clause (b) and (c), any such breaches or defaults that would not reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.07         Solvency. The Contributor has been and will be solvent at all times prior to the transfer of the Contributed Interests to the Company. No bankruptcy or similar insolvency proceeding has been filed or is currently contemplated by the Contributor, any Contributor Subsidiary or any JV Entity thereof.

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Section 4.08         Litigation. Except for actions, suits or proceedings covered by the policies of insurance described in Section 4.11, as of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a Contributor Material Adverse Effect. As of the date hereof, there is no action, suit or proceeding pending or, to the Contributor’s Knowledge, threatened against the Contributor, any Contributor Subsidiary or any JV Entity which challenges or impairs the ability of the Contributor to execute or deliver, or perform its obligations under this Contribution Agreement or to consummate the transactions contemplated hereby, including the Merger.

Section 4.09         Licenses and Permits. To the Contributor’s Knowledge, all notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management, leasing and operation of the Properties have been obtained or can be obtained without material cost, are in full force and effect, are in good standing and (to the extent required in connection with the transactions contemplated by the Transaction Agreements) are assignable to the Company, except in each case for items that would not, individually or in the aggregate, have a Contributor Material Adverse Effect. To the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary, any JV Entity nor any third party has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice, license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, nor has any of them received within the past one year any written notice of violation from any Governmental Authority or written notice of the intention of any entity to revoke any of them, that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority and that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.10         Properties.

(a)          The Properties are owned directly, in fee simple, by the Persons set forth on Section 4.10 of the Contributor Disclosure Letter or their direct or indirect wholly owned subsidiaries. Each Contributor Subsidiary or JV Entity listed as owning a Property on Section 4.10 of the Contributor Disclosure Letter is insured under a policy of title insurance as the owner of the fee simple estate (or, in the case of certain Properties, the leasehold estate) of such Property, in each case free and clear of all Liens except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property. Prior to the effective time of the transactions contemplated in this Contribution Agreement, no Contributor Subsidiary or JV Entity shall take or omit to take any action to cause any Lien to attach to any Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Property.

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(b)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) no Contributor Subsidiary, JV Entity, nor any other party to any agreement affecting any Property to which the Contributor, a Contributor Subsidiary or JV Entity is a party (other than a Lease (as such term is hereinafter defined) for space within such Property), has given or received any notice of default with respect to any term or condition of any such agreement, including, without limitation, any ground lease, (ii) no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of any Contributor Subsidiary or JV Entity, except for Permitted Liens, and (iii) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space leases) are valid and binding and in full force and effect. No Contributor Subsidiary or JV Entity has granted an option or right of first refusal or offer pursuant to the leases with respect to the sale of any Property.

(c)          As presently conducted, none of the operation of the buildings, fixtures and other improvements comprising a part of the Properties is in violation of any applicable building code, zoning ordinance or other law or regulation, except for such violations that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect. Neither the Contributor nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened proceedings for the rezoning of any Property or portion thereof except for such notices or proceedings that would not, individually, or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

(d)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, (i) to the Contributor’s Knowledge, neither the Contributor, any Contributor Subsidiary nor any JV Entity, nor any other party to any Lease, has given or received any notice of default with respect to any term or condition of any such Lease, (ii) to the Contributor’s Knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of the Contributor, the Contributor’s Subsidiaries or the JV Entities, except for Permitted Liens, and (iii) each of the leases (and all amendments thereto or modifications thereof) to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which any Contributor, Contributor Subsidiary or JV Entity or any Property is bound or subject (collectively, the “Leases”) is and will be valid and binding and in full force and effect.

(e)          Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect, each of the Leases to which the Contributor, any Contributor Subsidiary or any JV Entity is a party or by which the Contributor, any Contributor Subsidiary, JV Entity or any Property is bound or subject, is in full force and effect, and constitutes the legal, valid and binding obligation of the Contributor or the applicable Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, enforceable against each Contributor Subsidiary or JV Entity, and to the Contributor’s Knowledge, each other party thereto, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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(f)          To the Contributor’s Knowledge, except as previously disclosed to the Company, no tenant under any such Lease is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings, except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect.

Section 4.11         Insurance. The Contributor or the applicable Contributor Subsidiary or JV Entity has in place the public liability, casualty and other insurance coverage with respect to each Property as the Contributor reasonably deems necessary. Each of the insurance policies with respect to the Properties is in full force and effect in all material respects and none of the Contributor or the applicable Contributor Subsidiary or JV Entity is in default (in any material respect) under any such policies.

Section 4.12         Environmental Matters. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Contributor Material Adverse Effect (a) the Contributor Subsidiaries and the JV Entities are in compliance with all applicable Environmental Laws (b) neither the Contributor Subsidiaries nor any JV Entity have received within the past three years any written notice from any Governmental Authority or third party alleging that any Contributor Subsidiary, any JV Entity or any Property is not in compliance with applicable Environmental Laws, and (c) there has not been a release of a hazardous substance on any Property that would require investigation or remediation under applicable Environmental Laws. The representations and warranties contained in this Section 4.12 constitute the sole and exclusive representations and warranties made by the Contributor concerning environmental matters.

Section 4.13         Investment. The Stockholder acknowledges that the offering and issuance of the Company Shares to be acquired pursuant to this Contribution Agreement and the Merger Agreement are intended to be exempt from registration under the Securities Act and that the Company’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Stockholder contained herein. In furtherance thereof, the Stockholder represents and warrants to the Company as follows:

(a)          The Stockholder is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act).

(b)          The Stockholder is acquiring the Company Shares solely for its own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof in violation of the securities Laws.

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(c)          The Stockholder acknowledges that the Company Shares have not been registered under the Securities Act and, therefore, may not be sold unless registered under the Securities Act or an exemption from registration is available.

Section 4.14         Broker. None of the Contributor, any Contributor Subsidiary, JV Entity, or any of their managing members, members, partners, general partners, officers directors or employees, to the extent applicable, has entered into any agreement with any broker, finder, or similar agent of any Person or firm that will result in the obligation of the Company, the Operating Partnership or any of their Affiliates to pay any finder’s fees, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Contribution Agreement or other Formation Transactions.

Section 4.15         Eminent Domain. There is no existing or, to the Contributor’s Knowledge threatened, in writing condemnation, eminent domain or similar proceeding that would affect any of the Properties. Neither the Stockholder nor any Contributor Subsidiary nor any JV Entity has received any written notice from a Governmental Authority of any pending or threatened condemnation, eminent domain or similar proceeding that would affect any of the Properties.

Section 4.16         Assets and Liabilities. Section 4.16 of the Contributor Disclosure Letter accurately sets forth, in all material respects, as of June 30, 2014 and September 30, 2014, (i) all outstanding indebtedness of the Contributor, the Contributor Subsidiaries and each JV Entity, (iii) all interest rate swap liabilities of such entities and (iii) the net amount of all other tangible assets and liabilities of such entities (other than deferred tax liabilities, if any, and their interests in the Properties), which consists of cash, cash equivalents, accounts receivable and accounts payable. Except for distributions set forth on Section 4.16 of the Contributor Disclosure Letter (“Permitted Distributions”) or as contemplated by this Contribution Agreement (“Permitted Activities”), since September 30, 2014, the Contributor has not (i) made any distributions or (ii) entered into any transactions with an Affiliate other than on an arm’s-length basis. Section 4.16 of the Contributor Disclosure Letter accurately sets forth all contributions made to the Contributor by its Stockholder since September 30, 2014.

Section 4.17         No Other Representations or Warranties. Other than the representations and warranties expressly set forth in this Article IV, the Contributor shall not be deemed to have made any other representation or warranty in connection with this Contribution Agreement or the transactions contemplated hereby.

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Article V

INDEMNIFICATION

Section 5.01         Company Indemnification. Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Company shall indemnify and hold harmless the Stockholder and its officers, employees, partners, members, agents, representatives and Affiliates (each of which is a “Contributor Indemnified Party”) from and against any and all charges, complaints, claims, actions, causes of action, losses, damages, liabilities and expenses of any nature whatsoever, including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “Losses”) in excess of the greater of (i) 4.5% of the Company Cap or (ii) $250,000, in each case in the aggregate (the “Deductible”), arising out of or relating to, asserted against, imposed upon or incurred by a Contributor Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Company contained in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Company pursuant to the Transaction Agreements; provided, however, that the Company shall not have any obligation under this Section 5.01 to indemnify any Contributor Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Contributor’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud.

Section 5.02         Stockholder Indemnification.

(a)          Subject to the indemnification limitations set forth in this Contribution Agreement, from and after the Contribution Closing Date, the Indemnity Holdback Amount shall be used to indemnify and hold harmless the Company, the Operating Partnership and each of their respective directors, officers, employees, agents, representatives and Affiliates (each of which is a “Company Indemnified Party”) from and against any and all Losses in excess of the greater of (i) 4.5% of the Indemnity Holdback Amount or (ii) $250,000, in each case in the aggregate, arising out of or relating to, asserted against, imposed upon or incurred by such Company Indemnified Party in connection with or as a result of any breach of a representation, warranty or covenant of the Contributor or Stockholder in the Transaction Agreements or in any schedule, exhibit, certificate or affidavit or any other document delivered by the Contributor or the Stockholder pursuant to the Transaction Agreements; provided, however, that the Stockholder shall not have any obligation under this Section 5.02 to indemnify any Company Indemnified Party against any Losses to the extent that such Losses arise by virtue of the Company’s breach of this Contribution Agreement, gross negligence, willful misconduct or fraud; provided further, however, that, to the extent such Losses relate to breach of a representation, warranty or covenant of the Contributor regarding a Person or the assets and liabilities of a Person that the Company or the Operating Partnership has or acquires an interest in from a Person other than the Contributor, the indemnification pursuant to this Section 5.02 shall be limited to the portion of such Losses attributable to the interest acquired from the Contributor pursuant to this Contribution Agreement. The Stockholder hereby grants to the Company a security interest in the Company Shares held as the Indemnity Holdback Amount to secure the indemnification obligations set forth in this Section 5.02.

(b)          Any indemnification payment made by the Company to the Stockholder pursuant to the Transaction Agreements shall be made to such Stockholder in shares of Company Common Stock, the number of which shall equal the dollar value of the indemnification payment divided by the price of a share of Company Common Stock as of the close of market on the date of such indemnification payment.

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Section 5.03         Notice of Claims  At the time when any Contributor Indemnified Party or Company Indemnified Party, as applicable, (as applicable, an “Indemnified Party”) learns of any potential claim (a “Claim”) under this Article V that is asserted against the Indemnified Party that is subject to indemnification by the Company or in respect of the Contributor from the Indemnity Holdback Amount, as applicable, under this Article V (as applicable, the “Indemnifying Party”), such Indemnified Party will promptly give written notice (a “Claim Notice”) to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative); provided that failure to do so shall not prevent recovery under this Contribution Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to the Indemnified Party giving rise to such Claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by Law, the Indemnified Party shall deliver to the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), promptly after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to a Third Party Claim (defined below), and failure to do so shall prevent recovery under this Contribution Agreement to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.

Section 5.04         Third Party Claims. The Indemnifying Party (through the Stockholder’s Representative in the event the Indemnified Party is a Company Indemnified Party) shall be entitled, at its own expense, to assume and control the defense of any Claims based on claims asserted by third parties (“Third Party Claims”), through counsel chosen by the Indemnifying Party (or in the case of the Company Indemnified Parties, to the Stockholder’s Representative), if it gives written notice of its intention to do so to the Indemnified Parties within thirty (30) days of the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such defense at their expense provided, further, that if any such Third Party Claim relates to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, or seeks non-monetary damages or asserts damages in excess of the Indemnity Holdback Amount against a Company Indemnified Party, then, notwithstanding anything in this Contribution Agreement to the contrary, the Company (or a Subsidiary of the Company) shall have the right to control any such Third Party Claim. Without limiting the foregoing, in the event that the Indemnifying Party exercises the right to undertake any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party (unless prohibited by Law), at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the one hand, or the Indemnifying Party (or in the case of the Company Indemnified Parties, the Stockholder’s Representative), on the other hand, without the other’s consent (which shall not be unreasonably withheld or delayed) unless (a) there is no finding or admission of any violation of Law and no effect on any other claims that may be made against such other party and (b) each Indemnified Party that is party to such claim is released from all liability with respect to such claim; provided that the Stockholder’s Representative shall be deemed to have consented to any proposed compromise or settlement to which it has not objected to by written notice within 30 days after notice of such proposed compromise or settlement was provided by a Company Indemnified Party.

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Section 5.05         Survival of Representations and Warranties. All representations and warranties of the Contributor and the Company, as applicable, contained in this Contribution Agreement shall survive after the Closing until the first anniversary of the Contribution Closing Date (the “Expiration Date”). If written notice of a Claim in accordance with the provisions of Section 5.03 has been given prior to the Expiration Date, then the relevant representation and warranty shall survive, but only with respect to such specific Claim, until such Claim has been finally resolved. Any claim for indemnification not so asserted in writing by the Expiration Date may not thereafter be asserted and shall forever be waived.

Section 5.06         Establishment of Indemnity Holdback Escrow. On the Contribution Closing Date, the Company shall deposit the Indemnity Holdback Amount in accordance with the terms and conditions of the Escrow Agreement. The Company agrees that the security interest in the Company Shares may be released, or collateral may be substituted for such Company Shares, in accordance with the Escrow Agreement.

Section 5.07         Exclusive Remedy.

(a)          Except as set forth in Sections 2.07 and 6.05, the sole and exclusive remedy for Company Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Stockholder shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the Indemnity Holdback Amount.

(b)          Except as set forth in Section 6.04 of the PGI Merger Agreement, the sole and exclusive remedy for Contributor Indemnified Parties for any breach, misrepresentation or other matters relating to or arising in connection with the Transaction Agreements and any of the agreements, documents or instruments executed and delivered in connection therewith and any of the transactions contemplated thereby shall be indemnification pursuant to the provisions of this Article V and the Company shall not be liable or obligated to make payments under this Contribution Agreement to the extent such payments in the aggregate exceed the dollar amount obtained by multiplying the number of Company Shares included in the Indemnity Holdback Amount by the Price to the Public (the “Company Cap”).

Section 5.08         Tax Treatment. All indemnity payments made hereunder shall be treated as adjustments to the consideration paid hereunder for U.S. federal income tax purposes, unless otherwise required by applicable Laws.

Article VI

COVENANTS AND OTHER AGREEMENTS

Section 6.01         Covenants of the Contributor. From the date hereof through the Merger Closing, except as otherwise provided for or as contemplated by the Transaction Agreements, the Contributor shall and shall cause the Contributor Subsidiaries and JV Entities, to the extent the Contributor or the Contributor Subsidiaries control such JV Entities, to, use commercially reasonable efforts to conduct their business and operate and maintain the Properties in the ordinary course, consistent with past practices. In addition, the Contributor:

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(a)          will not make any distributions, other than Permitted Distributions;

(b)          except for Permitted Activities, will not enter into any transactions with an Affiliate other than on an arm’s-length basis;

(c)          will not sell, transfer or otherwise dispose of its Property Interests; and

(d)          will not mortgage, pledge, hypothecate, encumber (or permit to become encumbered) all or any portion of its Property Interests, except for Permitted Liens.

Section 6.02         Stockholder’s Representative. The Stockholder hereby appoints Dr. Thomas Finne as the representative for the Stockholder (the “Stockholder’s Representative”) and the Stockholder’s Representative shall have the authority to take the actions provided herein and receive notices on behalf of the Stockholder subsequent to the Merger Closing.

Section 6.03         Tax Covenants.

(a)          Each party hereto (i) shall cause all Tax Returns relating to the Contribution, Conversion and Merger to be filed on the basis of treating the Contribution, Conversion and Merger, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) shall not take any position on any Tax Return, or take any other reporting position, that is inconsistent with such treatment, unless otherwise required by applicable Laws.

(b)          The Contributor shall provide the Company with such reasonable cooperation and information relating to the Contributor, any Contributor Subsidiary and any JV Entity as the Company reasonably requires in (i) filing any Tax Return, amended Tax Return or claim for Tax refund, (ii) determining any liability for Taxes or a right to a Tax refund, (iii) conducting or defending any proceeding in respect of Taxes or (iv) performing Tax diligence, including with respect to the impact of the transactions contemplated herein on the Company’s qualification as a REIT for U.S. federal income Tax purposes and the qualification of the Contribution, Conversion and Merger, taken together, as a reorganization under Section 368(a) of the Code.

(c)          The Company shall be responsible for the prosecution of any claim or audit instituted after the Contribution Closing Date with respect to Taxes of the Contributor, any Contributor Subsidiary, or any JV Entity, attributable to any taxable period, or portion thereof, ending on or before the Contribution Closing Date.

(d)          Following the Merger Closing, to the extent the Stockholder has provided a FIRPTA Notice pursuant to Section 2.01(b)(iv)(A) instead of cash sufficient to fund withholding pursuant to Section 2.01(b)(iv)(B), the Stockholder shall provide the Company with evidence satisfactory to the Company that the Stockholder has complied with the requirements of Temporary Treasury Regulations Section 1.897-5T(d)(1)(iii), as modified by IRS Notice 89-57 with respect to the transactions contemplated hereby.

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(e)          Within 20 days after the Closing, the Company shall submit to the Internal Revenue Service the FIRPTA notice provided to it by the Stockholder pursuant to Section 2.01(b)(iv), in accordance with the requirements of Treasury Regulation Section 1.1445-2(d)(2)(i)(B).

(f)          The Company shall (a) cause to be timely paid any New York City and New York State real property transfer taxes payable by the Contributor as a result of, or in connection with, the Contribution (collectively, the “New York Transfer Taxes”); provided, that the parties hereto acknowledge and agree that such amount of New York Transfer Taxes payable shall reflect the Company’s status as a REIT; and (b) timely and properly file, with the Contributor’s cooperation, all Tax returns with respect to such New York Transfer Taxes.

Section 6.04         Tax Protection Provisions. The parties agree and acknowledge that the Stockholder is a beneficiary of the tax protection provisions set forth in Section 6.04 of that certain Agreement and Plan of Merger, dated as of the date hereof, by and among the Company, Paramount Group Inc., a Delaware corporation (“PGI”), the Stockholder and the other stockholders of PGI named therein (the “PGI Merger Agreement”).

Section 6.05         Liability for Transfer Taxes.  The Stockholder agrees to indemnify the Company for any Incremental Transfer Taxes incurred as a result of any direct or indirect transfers of the Company Shares received in connection with the transactions contemplated hereby, or interests therein (other than the receipt of the Merger Consideration by the Stockholder pursuant to the Merger Agreement) within two years after the IPO Closing Date; provided that such Company Shares shall be the Company’s sole recourse with respect to such indemnification obligation. The Stockholder hereby grants a security interest in 50% of its Company Shares received in the Merger to the Company and hereby irrevocably appoints the Company, and any of its agents, officers, or employees as its attorney-in fact, which shall be deemed coupled with an interest, with full power to prepare, execute and deliver any documents, instruments and agreements as may be appropriate to perfect and continue such security interest in favor of the Company. The security interest granted pursuant to this Section 6.05 shall attach to the Company Shares that are not included in the Indemnity Holdback Amount. The Company agrees that the security interest in the Company Shares received by the Stockholder in the Merger may be released, or collateral may be substituted, in accordance with the terms of the Escrow Agreement.

Section 6.06         Commercially Reasonable Efforts By the Company and the Contributor. Each of the Company and the Contributor shall use commercially reasonable efforts and cooperate with each other in (a) promptly determining whether any filings are required to be made or consents, approvals, waivers, permits or authorizations are required to be obtained (under any applicable Laws or regulation or from any Governmental Authority or third party) in connection with the transactions contemplated by this Contribution Agreement, and (b) promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, permits or authorizations.

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Article VII

GENERAL PROVISIONS

Section 7.01         Notices. All notices and other communications under the Transaction Agreements shall be in writing and shall be deemed given when (a) delivered personally, (b) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid, (c) one (1) Business Day after being sent by a nationally recognized overnight courier or (d) transmitted by facsimile if confirmed within 24 hours thereafter by a signed original sent in the manner provided in clause (a), (b) or (c) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such party):

(a)          if to the Company to:

Paramount Group, Inc.
1633 Broadway, Suite 1801
New York, NY 10011
Facsimile: (212) 237-3197
Attention: General Counsel

(b)          If to the Contributor, the Stockholder or the Stockholder’s Representative, to Arcade Rental Investments 2, Inc.

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG
Werner-Otto-Straße 1-7
D-22179 Hamburg, Germany
Attention: Thomas Armbrust
Fax: +49-40-6461-2960

Section 7.02         Definitions. For purposes of this Contribution Agreement, the following terms shall have the following meanings:

(a)          “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(b)          “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.

(c)          “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.

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(d)          “Company’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(e)          “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operations of the Company and the Operating Partnership and their Subsidiaries, taken as a whole, giving effect to the Formation Transactions and the IPO. For the avoidance of doubt, the Merger shall not be deemed a Company Material Adverse Effect.

(f)          “Contributor Material Adverse Effect” means a material adverse effect on the assets, business, financial condition or results of operation of the Contributor and the Contributor Subsidiaries, taken as a whole, including such entities’ direct and indirect interests in the JV Entities. For the avoidance of doubt, the Merger shall not be deemed a Contributor Material Adverse Effect.

(g)          “Contributor’s Knowledge” means the actual knowledge (without obligation to conduct due inquiry) of Albert Behler, David Spence and Gage Johnson of the matter in question (and not their constructive or imputed knowledge).

(h)          “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.

(i)           “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(j)          “Incremental Transfer Taxes” means any additional transfer taxes attributable to the transactions contemplated by this Agreement and the other Formation Transactions as a result of the failure of any such transaction to qualify as a "real estate investment trust transfer" under New York Tax Law section 1402 or under New York City Administrative Code section 11-2102 due to direct or indirect transfers of the Company Shares issued as Merger Consideration occurring within two years after the IPO Closing Date.

(k)          “IPO Closing Date” means the closing date of the IPO.

(l)          “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority.

(m)          “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.

(n)          “Organizational Documents” means with respect to any entity, the certificate of formation, limited liability company agreement, or operating agreement, certificate of incorporation, bylaws, certificate of limited partnership, limited partnership agreement and any other governing instrument, as applicable, including, without limitation, in the case of the Contributor, the Limited Liability Company Operating Company Agreement of Arcade Rental Investments 2 LLC.

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(o)          “Permitted Liens” means (i) Liens for unpaid Taxes (other than statutory liens for Taxes not yet due and payable); (ii) zoning Laws generally applicable to the districts in which the Properties are located; (iii) easements for public utilities, encroachments, rights of access and/or other non-monetary matters that do not materially interfere with the use of the Properties; (iv) Liens securing Permitted Activities; (v) Liens arising in the ordinary course of business; (vii) Liens securing indebtedness outstanding as of September 30, 2014 or incurred on an arms’ length basis thereafter and (viii) any exceptions contained in the title policies relating to the Properties as of the Contribution Closing Date.

(p)          “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

(q)          “Price to the Public” means the public offering price of a share of Company Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the registration statement pursuant to which the shares of Company Common Stock offered in the IPO were registered under the Securities Act.

(r)          “Registration Statement” means the Company’s registration statement on Form S-11, as amended from time to time, as filed with the SEC.

(s)          “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.

(t)          “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another direct or indirect Subsidiary of such Person) either (i) a general partner, managing member or other similar interest, or (ii) (A) 50% or more of the voting power of the voting capital stock or other equity interests, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.

(u)          “Tax” (and, with its correlative meaning, “Taxes”) means any and all taxes, including any interest, penalties, or other additions to tax that may become payable in respect thereof, which taxes shall include, without limiting the generality of the foregoing, all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, unclaimed property taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing.

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(v)         “Tax Return” means any return, statement, schedule, declaration, claim for refund, report, document or form filed or required to be filed with respect to Taxes, including any amendment, attachment and supplement thereof.

Section 7.03         Counterparts. This Contribution Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each party and delivered to each other party. All counterparts shall collectively constitute one agreement (or amendment, as applicable). The exchange of counterparts of this Contribution Agreement among the parties by means of facsimile transmission or by electronic transmission (pdf) which shall contain authentic reproductions shall constitute a valid exchange of this Contribution Agreement and shall be binding upon the parties hereto.

Section 7.04         Entire Agreement; Third-Party Beneficiaries. The Transaction Agreements and the Escrow Agreement, including, without limitation, the exhibits and schedules hereto and thereto, constitute the entire agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject matter of the Transaction Agreements. The Transaction Agreements are not intended to confer any rights or remedies on any Person other than the parties hereto.

Section 7.05         Governing Law. The Transaction Agreements shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Section 7.06         Assignment. The Transaction Agreements shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and thereto and their respective heirs, legal representatives, successors and assigns; provided, however, that the Transaction Agreements may not be assigned (except by operation of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent shall be null and void and of no force and effect, except that the Company may assign its rights and obligations hereunder and thereunder to an Affiliate. Notwithstanding the foregoing, the Transaction Agreements shall be assigned to Arcade 2 LLC.

Section 7.07         Jurisdiction. The parties hereto hereby (a) submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any New York state court sitting in New York City, New York, with respect to any dispute arising out of the Transaction Agreements or any transaction contemplated hereby or thereby to the extent such courts would have subject matter jurisdiction with respect to such dispute, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, or that the venue of the action is improper.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THE TRANSACTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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Section 7.08         Dispute Resolution. The parties intend that this Section 7.08 will be valid, binding, enforceable, exclusive and irrevocable and that it shall survive any termination of the Transaction Agreements.

(a)          Upon any dispute, controversy or claim arising out of or relating to the Transaction Agreements or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 7.08(c) below without regard to any such 10-day negotiation period.

(b)          Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 7.08(a) above shall be submitted to final and binding arbitration in New York before one neutral and impartial arbitrator, in accordance with the Laws of the State of New York for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days following a demand for arbitration, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.

(c)          Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under the Transaction Agreements. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.

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(d)          The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.

Section 7.09         Severability. Each provision of the Transaction Agreements will be interpreted so as to be effective and valid under applicable Laws, but if any provision is held invalid, illegal or unenforceable under applicable Laws in any jurisdiction, then such invalidity, illegality or unenforceability will not affect any other provision, and the Transaction Agreements, as applicable, will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been included herein.

Section 7.10         Rules of Construction.

(a)          The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of the Transaction Agreements and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

(b)          The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to the Transaction Agreements as a whole and not to any particular provision of the Transaction Agreements, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of the Transaction Agreements unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in the Transaction Agreements, they shall be deemed to be followed by the words “without limitation.” All terms defined in the Transaction Agreements shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in the Transaction Agreements are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

Section 7.11         Equitable Remedies. The parties agree that irreparable damage would occur to the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, in the event that any of the provisions of the Transaction Agreements were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Company, on the one hand, and the Contributor and the Stockholder, on the other hand, shall be entitled to an injunction or injunctions to prevent breaches of the Transaction Agreements by the other party and to enforce specifically the terms and provisions hereof in any federal or state court located in New York, this being in addition to any other remedy to which the parties entitled under the Transaction Agreements or otherwise at law or in equity.

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Section 7.12         Time of the Essence. Time is of the essence with respect to all obligations under the Transaction Agreements.

Section 7.13         Descriptive Headings. The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of the Transaction Agreements.

Section 7.14         No Personal Liability Conferred. The Transaction Agreements shall not create or permit any personal liability or obligation on the part of any officer, director, partner, employee or shareholder of the Company, the Contributor or the Stockholder.

Section 7.15         Amendments. This Contribution Agreement may be amended by appropriate instrument, without the consent of the Contributor and the Stockholder, at any time prior to the Contribution Closing Date; provided, that no such amendment, modification or supplement shall be made that alters the amount or changes the form of the consideration to be delivered to the Contributor or the Stockholder.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Contribution Agreement to be signed by their respective duly authorized officers or representatives, all as of the date first written above.

PARAMOUNT GROUP, INC., a Maryland corporation
	By:	/s/ David P. Spence
		Name: David P. Spence
		Title: Senior Vice President
ARCADE RENTAL INVESTMENTS 2, INC.
	By:	/s/ Thomas Armbrust
		Name: Thomas Armbrust
		Title: President

[Signature Page to Arcade 2 Contribution Agreement]

STOCKHOLDER

/s/ Alexander Otto

Name:  Alexander Otto

[Signature Page to Arcade 2 Contribution Agreement]

EXHIBIT A

List of Properties

[See attached]

A-1

EXHIBIT B

Certificate of Conversion

[See attached]

B-1

EXHIBIT C

Certificate of Formation

[See attached]

C-1

EXHIBIT D

Agreement and Plan of Merger

[See attached]

D-1

EXHIBIT E

Escrow Agreement

[See attached]

E-1

EXHIBIT F

Lock-up Agreement

[See attached]

F-1

EXHIBIT G

Assignment and Assumption Agreement

[See attached]

G-1

SCHEDULE 1.01

Excluded Assets

All of the interests in Kommanditgesellschaft Grundstücksgesellschaft EKZ Schwedt m.b.H. & Co. held by Arcade 2

Schedule 1.01

SCHEDULE 1.02

Consideration

Arcade 2

Consideration

667,059 Company Shares

Schedule 1.02

EX-99.9

Exhibit 9

PARAMOUNT GROUP, INC.

SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT (this “Agreement”) is made as of this 6^th day of November, 2014, by and between Paramount Group, Inc., a Maryland corporation (the “Company”), and the individuals and entity listed on Schedule I hereto (each, a “Purchaser” and collectively, “Purchasers”).

WHEREAS, the Company has filed a registration statement on Form S-11 (as heretofore amended, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission in connection with a proposed initial public offering (the “IPO”) of shares of common stock of the Company, par value $0.01 per share (the “Common Stock”); and

WHEREAS, in connection with the consummation of the IPO and as described more fully in the Registration Statement, the Company and its operating partnership will engage in a series of transactions through which they will acquire their initial portfolio of properties and other assets that they intend to own following the IPO (the “Formation Transactions”); and

WHEREAS, concurrent with the consummation of the IPO, the Company desires to issue and sell, and Purchasers desire to purchase and acquire, upon the terms and conditions set forth in this Agreement, shares of Common Stock as provided in this Agreement.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

1.          Sale and Purchase of Shares. Subject to and concurrent with the consummation of the IPO and subject to the terms and conditions of this Agreement, the Company agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees to purchase and acquire from the Company, the whole number of shares of Common Stock (the “Shares”), rounded down to the nearest whole share, equal to the quotient of (i) the investment amount set forth opposite the name of such Purchaser in Schedule I hereto divided by (ii) the public offering price per share of Common Stock sold in the IPO as shown on the cover page of the final prospectus forming part of the Registration Statement (the “Price Per Share”). The aggregate purchase price for the Shares (the “Purchase Price”) shall equal the number of Shares to be purchased and sold hereunder multiplied by the Price Per Share.

2.          Closing. The closing of the purchase and sale of the Shares hereunder will take place at the offices of the Company or the Company’s legal counsel concurrently with, and shall be subject to, the completion of the IPO and the satisfaction of the conditions of closing set forth herein (the “Closing”). At the Closing, the Company shall issue to each Purchaser the Shares to be purchased by such Purchaser, registered in such Purchaser’s or its designee’s name, upon the payment of the Purchase Price with respect to such shares in immediately available funds by wire transfer to an account designated by the Company to such Purchaser. The Shares shall be issued in book-entry form and the Company and/or its transfer agent shall provide each Purchaser with customary evidence of the issuance of the Shares purchased by such Purchaser.

3.          Representations and Warranties of the Company. In connection with the issuance and sale of the Shares, the Company hereby represents and warrants to each Purchaser the following:

3.1           The Company (a) has been duly organized and is validly existing as a corporation in good standing with the State Department of Assessments and Taxation of Maryland and (b) has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

3.2           All corporate action necessary to be taken by the Company to authorize the execution, delivery and performance of this Agreement has been duly and validly taken. This Agreement has been duly executed and delivered by the Company. This Agreement constitutes the valid, binding and enforceable obligations of the Company, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity. The issuance and sale by the Company of the Shares will not (a) conflict with, or result in a default under, the articles of incorporation or bylaws of the Company, any material contract by which the Company or any of its subsidiaries’ respective property is bound, or any federal or state laws or regulations or decree, ruling or judgment of any United States or state court applicable to the Company or its property or (b) result in the imposition of any claim, lien, pledge, deed of trust, option, charge, encumbrance or other restriction or limitation (each, a “Lien”), or any obligation to create any Lien, under any material contract by which the Company or any of its subsidiaries’ respective property is bound or under the articles of incorporation or bylaws of the Company.

3.3           Prior to the issuance of the Shares, the Shares will have been duly and validly authorized and upon issuance in accordance with, and payment pursuant to, the terms hereof, (a) the Shares will be fully paid and non assessable and (b) each Purchaser will have good title to the Shares issued to such Purchaser, free and clear of all liens created by the Company, claims and encumbrances of any kind, other than transfer restrictions hereunder and under the articles of incorporation of the Company and the other agreements described herein.

3.4           No consent, approval, authorization or order of, or registration, qualification or filing with, any governmental entity or any other third party is required to be obtained or made by the Company for the execution, delivery or performance by the Company of this Agreement or the consummation by the Company of the sale of the Shares contemplated hereby, except such as have been already obtained or made or as may be required under the Securities Act or the rules promulgated under the Securities Act, state securities or blue sky laws or Maryland law or as may be required by the Financial Industry Regulatory Authority.

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3.5           Subject to the accuracy of the representations and warranties of the Purchasers and each other purchaser of shares of Common Stock on the date hereof, it is not necessary in connection with the offer, sale and delivery of the Shares to the Purchasers in the manner contemplated by this Agreement to register the Shares under the Securities Act.

3.6           The Company is not a party to any, and there are no pending, or to the knowledge of the Company, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental investigations of any nature against the Company or any of its subsidiaries or to which any of their respective assets are subject relating to or which challenges the validity or propriety of the sale of the Shares contemplated hereby.

4.          Representations and Warranties of Purchasers. Each Purchaser, severally and not jointly, hereby represents and warrants to the Company that:

4.1           Such Purchaser is an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

4.2           The Shares are being acquired by such Purchaser for its own account, only for investment purposes and not with a view to, or for resale in connection with, any public distribution or public offering thereof within the meaning of the Securities Act.

4.3           Such purchaser, to the extent applicable, has been duly organized or formed and is validly existing and in good standing under the laws of its jurisdiction of organization or formation and has all necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

4.4           All action necessary to be taken by such Purchaser to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered by such Purchaser in connection with the transactions contemplated hereby and thereby has been duly and validly taken. This Agreement has been duly executed and delivered by such Purchaser. This Agreement constitutes the valid, binding and enforceable obligation of such Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity. The purchase by such Purchaser of the Shares does not conflict with the organizational documents of such Purchaser or with any material contract under which such Purchaser or its property is bound, or any laws or regulations or decree, ruling or judgment of any court applicable to such Purchaser or its property.

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4.5           Such Purchaser understands and acknowledges that the offering of the Shares pursuant to this Agreement will not be registered under the Securities Act on the grounds that the offering and sale of the Shares is exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof and exempt from registration pursuant to applicable state securities or blue sky laws, and that the Company’s reliance upon such exemptions is predicated upon such Purchaser’s representations and warranties set forth in this Agreement. Such Purchaser understands and acknowledges that the Shares will be characterized as “restricted securities” under the Securities Act and such laws and may not be sold unless the Shares are subsequently registered under the Securities Act and qualified under state law or unless an exemption from such registration and such qualification is available.

4.6           Such Purchaser (a) is sufficiently experienced in financial and business matters to be capable of evaluating the merits and risks involved in purchasing the Shares and to make an informed decision relating thereto, (b) has the ability to bear the economic risk of such Purchaser’s prospective investment in the Shares and (c) has not been offered the Shares by any form of advertisement, article, notice or other communication published in any newspaper, magazine, or similar medium; or broadcast over television or radio; or any seminar or meeting whose attendees have been invited by any such medium.

4.7           Such Purchaser has a substantive, pre-existing relationship with the Company. Such Purchaser (a) was not identified or contacted through the marketing of the IPO and (b) did not independently contact the Company as a result of the general solicitation by means of the Registration Statement.

4.8           Such Purchaser has not incurred any liability for any finder’s fees or similar payments in connection with the transactions herein contemplated.

4.9           Such Purchaser will have available at the closing sufficient funds to acquire the Shares to be purchased by such Purchaser pursuant to this Agreement.

4.10         Such Purchaser has delivered a completed and executed IRS Form W-9 or applicable IRS Form W-8 and will complete, execute and deliver such additional documentation related to tax withholding or tax filings as the Company may request from time to time. Such Purchaser confirms that such IRS Form W-9 or applicable IRS Form W-8 is true, correct and complete in all respects.

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4.11         The amounts to be paid by such Purchaser to the Company in respect of the Purchase Price are not, and will not be, directly, or to such Purchaser’s knowledge indirectly, derived from activities that may contravene federal, state or foreign laws and regulations, including anti money laundering and terrorist financing laws and regulations, and, to the best of such Purchaser’s knowledge, neither (a) such Purchaser, nor (b) any person or entity for which such Purchaser is acting as agent or nominee in connection with this Agreement is located in a country or territory, or is an individual or entity named on any list administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), nor is any such person or entity prohibited (nor will they be prohibited) from investing in the Company under any OFAC administered sanctions or embargo programs. The Company reserves the right to request such information as is necessary to verify the identity of such Purchaser or any individual or entity having signatory or other similar authority over such Purchaser with respect to this Agreement and the transactions contemplated hereby, and may seek to verify such identity and the source of funds for the Purchase Price.

4.12         Concurrently with entering into this Agreement, such Purchaser will enter into a customary 180-day underwriters’ lock-up agreement with respect to the Shares consistent with the form of lock-up agreement affiliates of the Company are required to enter into in connection with the IPO.

5.          Public Announcements. Except as may be required by applicable law, no party hereto shall make any public announcements or otherwise communicate with any news media with respect to this Agreement or the purchase of the Shares contemplated hereby, without prior consultation with the other parties as to the timing and contents of any such announcement or communications; provided, however, that nothing contained herein shall prevent any party from promptly making all filings with any governmental entity or disclosures with the stock exchange, if any, on which such party’s capital stock is listed, as may, in its judgment, be required in connection with the execution and delivery of this Agreement or the purchase of the Shares contemplated hereby. If any party decides that it must make any such required filing it will advise the other parties prior to making such filing. Notwithstanding the foregoing, the parties hereto acknowledge that the transactions contemplated hereby will be disclosed in the Registration Statement and that this Agreement or a form of this Agreement will be filed as an exhibit to the Registration Statement.

6.          Mutual Condition of Closing. The obligations of the Company and each Purchaser to consummate the purchase and sale of the Shares are subject to the consummation of the IPO.

7.          Conditions of Closing of the Company. The obligation of the Company to consummate the purchase and sale of the Shares to each Purchaser is subject to the fulfillment to the Company’s reasonable satisfaction (or waiver by the Company) on or prior to the Closing of each of the following conditions:

7.1           Each representation and warranty made by such Purchaser in Section 4 above shall be true and correct as of the Closing as though made as of the Closing. By accepting the Shares to be issued to such Purchaser and delivering the Purchase Price therefor, such Purchaser shall be deemed to have reaffirmed such representations and warranties as of the Closing.

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7.2           All covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Purchaser on or prior to the Closing shall have been performed or complied with by it in all respects.

8.          Conditions of Closing of Purchasers. The obligations of each Purchaser to consummate the purchase and sale of the Shares is subject to the fulfillment to such Purchaser’s reasonable satisfaction (or waiver by such Purchaser) on or prior to the Closing of each of the following conditions:

8.1           Each representation and warranty made by the Company in Section 3 above shall be true and correct as of the Closing as though made as of the Closing. By delivering the Shares to be issued to such Purchaser and accepting the Purchase Price therefor, the Company shall be deemed to have reaffirmed such representations and warranties as of the Closing.

8.2           All covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the Closing to the extent they relate to such Purchaser shall have been performed or complied with by it in all respects.

9.          Listing of the Shares. The Company hereby agrees to use its commercially reasonable best efforts to cause the Shares that are acquired pursuant to this Agreement to be listed on the New York Stock Exchange or such other exchange on which the Common Stock is then listed.

10.         Further Assurances. Each Purchaser shall execute and deliver such instruments and take such other actions prior to or after the Closing as the Company may reasonably request in order to carry out the intent of this Agreement.

11.         Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement or their obligations hereunder.

12.         Amendments. This Agreement may not be amended, modified or waived, in whole or in part, except by an agreement in writing signed by all of the parties hereto; provided that an amendment, modification or waiver that solely affects the rights or obligations of a Purchaser or the Company with respect to a Purchaser hereunder may be entered into, and will be effective if entered into, by the Company and such Purchaser.

13.         Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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14.         Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed wholly within said State.

15.         Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, RELEASES AND RELINQUISHES AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATIONS, ANY CLAIM OR ACTION TO REMEDY ANY BREACH OR ALLEGED BREACH HEREOF, TO ENFORCE ANY TERM HEREOF, OR IN CONNECTION WITH ANY RIGHT, BENEFIT OR OBLIGATION ACCORDED OR IMPOSED BY THIS AGREEMENT.

16.         Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

17.         Legends. Each certificate, if any, representing the Shares and the records of the Company reflecting each Purchaser’s ownership of the Shares shall be endorsed with the following legends or substantially similar legends in addition to any other legends deemed necessary or appropriate by the Company:

The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), and may not be offered, sold, pledged or otherwise transferred except pursuant to an exemption from registration under the Act, or pursuant to an effective registration statement under the Act.

18.         Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.

19.         Survival. The provisions of Sections 5, 14, 15, 21 and 23 hereof shall survive termination of this Agreement as it relates to any or all Purchasers, pursuant to Section 20.

20.         Termination. This Agreement shall be terminated prior to the consummation of the transactions contemplated hereby if the Closing has not occurred on or prior to March 31, 2015. The Company or a Purchaser may also terminate this Agreement, as it relates to such Purchaser, prior to the consummation of the transactions contemplated hereby upon a material breach of the representations and warranties or covenants of the other party contained herein. In the event of any termination of this Agreement as it relates to a Purchaser, subject to Section 19, this Agreement as it relates to such Purchaser shall become null and void and have no effect, without any liability to any person in respect hereof on the part of any party hereto, except for such liability resulting from a party’s breach of this Agreement prior to such termination.

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21.         Remedies and Waivers. No delay or omission on the part of any party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement shall (a) impair such right power or remedy or (b) operate as a waiver thereof. The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of any other right, power or remedy. The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, power and remedies provided by law.

22.         Entire Agreement. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subject matter hereof and thereof and they supersede, merge, and render void every other prior written and/or oral understanding or agreement among or between the parties hereto.

23.         Notices. Except as set forth below, all notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered personally, (b) when sent by telex or telecopier if sent on a business day between the hours of 8:00 a.m. and 5:00 p.m., New York time, and otherwise the next business day after sending, (c) five business days after being sent if mailed by registered or certified mail (return receipt requested), postage prepaid, or (d) one business day if sent by overnight delivery service. Notice shall be sent to the respective parties at the following addresses (or at such other address for any party as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof):

If to the Company:	Paramount Group, Inc.
	1633 Broadway, Suite 1801
	New York, New York 10019
	Attn: General Counsel
If to Purchasers:	c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG
	Werner-Otto-Straße 1-7
	D-22179 Hamburg, Germany
	Attention: Thomas Armbrust
	Fax: +49-40-6461-2960

[The remainder of this page has been left blank intentionally.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above:

COMPANY:
PARAMOUNT GROUP, INC.
By:	/s/ Albert Behler
	Name: Albert Behler
	Title: President and CEO
PURCHASERS:
Werner Otto Trust
By:	/s/ Jay A. Lipe
	Name: Jay A. Lipe
	Title: Managing Trustee
/s/ Katharina Otto-Bernstein
Name: Katharina Otto-Bernstein
/s/ Maren Otto
Name: Maren Otto
/s/ Thomas Armbrust
Name: Thomas Armbrust
/s/ Gerd Walendy
Name: Gerd Walendy
/s/ Thomas Finne
Name: Thomas Finne

Share Purchase Agreement

SCHEDULE I

Purchaser	Investment Amount
Werner Otto Trust	$	16,000,000.00
Katharina Otto-Bernstein	$	20,000,000.00
Maren Otto	$	12,000,000.00
Thomas Armbrust	$	2,250,000.00
Gerd Walendy	$	500,000.00
Thomas Finne	$	250,000.00
Total:	$	51,000,000.00

EX-99.10

exhibit 10

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT is entered into as of November 6, 2014 by and among Paramount Group, Inc., a Maryland corporation (the “Company”), and the holders listed on Schedule I hereto (the “Initial Holders”).

RECITALS

WHEREAS, the Company intends to conduct an initial public offering (the “IPO”) of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), and in connection with the IPO, the Company desires to engage in certain formation transactions and concurrent private placements (collectively, the “Formation Transactions”), pursuant to which the Initial Holders will receive Common Stock; and

WHEREAS, in connection with the Formation Transactions, the Company desires to grant the Initial Holders and their permitted assignees and transferees the registration rights set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Article I

DEFINITIONS

Section 1.1           Definitions. In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

“Automatic Shelf Registration Statement” means an “Automatic Shelf Registration Statement,” as defined in Rule 405 under the Securities Act.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to be closed.

“Commission” means the Securities and Exchange Commission.

“Common Stock” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the Preamble.

“Demand Notice” has the meaning set forth in Section 2.1(a).

“Demand Registration” has the meaning set forth in Section 2.1(a).

“Demand Registration Statement” has the meaning set forth in Section 2.1(b).

“Demand Representative” has the meaning set forth in Section 2.1(a).

“Demand Offering Representative” has the meaning set forth in Section 2.3(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“FINRA” means the Financial Industry Regulatory Authority or other successor organization.

“Formation Transactions” has the meaning set forth in the Recitals.

“Holder” means (i) any Initial Holder who holds Registrable Securities or (ii) any subsequent holders of Registrable Securities who become parties to this Agreement.

“Indemnified Party” has the meaning set forth in Section 2.10.

“Indemnifying Party” has the meaning set forth in Section 2.10.

“Initial Holders” has the meaning set forth in the Preamble.

“IPO” has the meaning set forth in the Recitals.

“Market Value” means, with respect to the Common Stock, the market price of the Common Stock for such day (or, if such day is not a trading day, the most recent prior trading day). The market price of the Common Stock for a trading day shall be: (i) if the Common Stock is listed or admitted to trading on any securities exchange or the over-the-counter market, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, in either case as reported in the principal consolidated transaction reporting system, (ii) if the Common Stock is not listed or admitted to trading on any securities exchange or the over-the-counter market, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the Company, or (iii) if the Common Stock is not listed or admitted to trading on any securities exchange or the over-the-counter market and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the Company, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten days prior to the date in question) for which prices have been so reported; provided that if there are no bid and asked prices reported during the ten days prior to the date in question, the Market Value of the Common Stock shall be determined by the Board of Directors of the Company acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

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“Notice and Questionnaire” has the meaning set forth in Section 2.1(d).

“Offering” means an underwritten offering of Common Stock pursuant to a Demand Registration or Underwritten Offering Demand.

“Offering Launch Date” for an Offering means the earliest of (i) the date of the filing a preliminary prospectus (or prospectus supplement) that is intended to be distributed to potential investors in the Offering, (ii) the public announcement of the commencement of the Offering or (iii) if applicable, the entrance into a binding agreement to sell securities being sold in the Offering to the underwriters for the Offering.

“Otto Family” means Maren Otto, all descendants of the late Professor Werner Otto and all individuals related by blood, marriage or adoption (first, second, third or fourth related degree) to Maren Otto or the late Professor Werner Otto, any trust or any family foundation which has exclusively been established in favor of one or several of such individuals, and any partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity, in which one or several of such individuals hold (either directly or indirectly) more than 50.0% of the voting rights or more than 50.0% of the equity capital of any such partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity. For the avoidance of doubt, each of the Initial Holders are members of the Otto Family.

“Permitted Investor Transferee” has the meaning set forth in Section 3.4.

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Registrable Securities” means shares of Common Stock (i) received by a member of the Otto Family in the Formation Transactions, (ii) received in the Formation Transactions by an entity in which one or more members of the Otto Family had a direct or indirect interest and subsequently distributed or transferred to a member of the Otto Family in respect of such direct or indirect interest, including, with respect to (i) and (ii) above, any additional shares of Common Stock issued as a dividend or distribution on, in exchange for, or otherwise in respect of, shares that otherwise constitute Registrable Securities (including as a result of combinations, recapitalizations, mergers, consolidations, reorganizations or otherwise) and (iii) that are acquired from time to time after the Formation Transactions by a member of the Otto Family; provided that shares of Common Stock shall cease to be Registrable Securities at the earliest time as one of the following shall have occurred: (a) such shares have been disposed of pursuant to a Registration Statement, (b) such shares have been sold pursuant to Rule 144 or (c) with respect to any shares held by a party to the Agreement or an entity that was a member of the Otto Family, but which ceases to be a member of the Otto Family (e.g. as a result of the transfer of equity interests in such entity to a person or entity that is not a member of the Otto Family), the date on which such party or entity ceases to be a member of the Otto Family.

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“Registration Statement” means a Demand Registration Statement or Resale Shelf Registration Statement.

“Resale Shelf Demand Notice” shall have the meaning set forth in Section 2.2(a).

“Resale Shelf Demand Representative” shall have the meaning set forth in Section 2.2(a).

“Resale Shelf Registration Statement” shall have the meaning set forth in Section 2.2(a).

“Resumption Date” has the meaning set forth in Section 2.4.

“Rule 144” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“Rule 415” means Rule 415 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Stand-Down Notice” has the meaning set forth in Section 2.4.

“Suspension Notice” has the meaning set forth in Section 2.13.

“Suspension Period” has the meaning set forth in Section 2.13.

“Underwritten Offering Demand” has the meaning set forth in Section 2.3(a).

“Underwritten Offering Demand Notice” has the meaning set forth in Section 2.3(a).

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Article II

REGISTRATION AND OFFERING RIGHTS

Section 2.1           Demand Registration Rights.

(a)          If at any time beginning 14 months after the closing date of the IPO, a Resale Shelf Registration Statement (or other registration statement) registering the resale of all of a Holder’s Registrable Securities is not effective, notwithstanding any obligation the Company may have under Section 2.2(a), any one or more of such Holder(s) may make written requests to the Company (a “Demand Notice”) to require the Company to register, under and in accordance with the provisions of the Securities Act, any or all of such Holders’ Registrable Securities pursuant to the terms of this Agreement (a “Demand Registration”); provided, however, that a Demand Registration may only be made if (i) the Registrable Securities requested to be registered by the Holder(s) delivering the Demand Notice have an aggregate Market Value of at least $40,000,000 on the trading day immediately preceding the date that the Demand Notice is sent to the Company and (ii) it shall not result in the Holders requesting collectively more than two Demand Registrations in any consecutive 12-month period. Any Demand Notice must specify (A) the Registrable Securities proposed to be registered, (B) the proposed method of distribution of such Registrable Securities, which may be by means of an underwritten offering, and (C) a single Person who shall serve as the representative of the Holders (the “Demand Representative”). Any Demand Registration may (if specified in the Demand Notice), but need not, require the Company to register such Holders’ Registrable Securities on Form S-3 (provided that the Company is eligible to register the resale of the Registrable Securities on Form S-3 (or a similar successor form established by the Commission)). Subject to Section 2.5, the Company will have the right to include shares of Common Stock to be sold for its own account or shares owned by other holders of Common Stock in any Demand Registration Statement.

(b)          If the Company does not have an effective Automatic Shelf Registration Statement at the time it receives a Demand Notice, the Company shall use its commercially reasonable best efforts to prepare and file a registration statement on an appropriate form with respect to any Demand Registration (the “Demand Registration Statement”) as promptly as reasonably practicable after receiving such Demand Notice, and the Company shall use its commercially reasonable best efforts to cause the Demand Registration Statement to become effective as promptly as reasonably practicable after the filing thereof. Notwithstanding the foregoing, upon the request of the Demand Representative in connection with a Demand Registration relating to an underwritten offering, the Company will agree to delay the effectiveness of the Demand Registration Statement for up to 10 Business Days after the Company would otherwise be prepared to cause the Demand Registration Statement to become effective. The Company shall use its commercially reasonable best efforts to maintain the effectiveness of the Demand Registration Statement after the effective date thereof until all Registrable Securities included therein have been sold or until such Registrable Securities included therein have been registered on a Resale Shelf Registration Statement. To the extent that the Company has an effective Automatic Shelf Registration Statement at the time it receives a Demand Notice, (i) if the Demand Registration relates to an underwritten offering, then such Demand Registration will be treated by the Company pursuant to Section 2.3(a) as an Underwritten Offering Demand, and (ii) if the Demand Registration does not relate to an underwritten offering, then the Company may file a prospectus or post-effective amendment, as applicable, to include in the Automatic Shelf Registration Statement the Registrable Securities to be registered in the Demand Registration (in the case of clause (ii), such prospectus or post-effective amendment together with such previously filed Automatic Shelf Registration Statement will be considered the Demand Registration Statement). 

(c)          If the Demand Registration relates to an underwritten offering, the Demand Representative, on behalf of the Holders, will have the right to determine the structure of the offering and negotiate the terms of any underwriting agreement as they relate to the Holders, including the number of shares to be sold (if not all shares offered can be sold at the highest price offered by the underwriters), the offering price and underwriting discount. The Demand Representative will also have the right to determine the underwriters (and their roles) in the offering; provided that such underwriters are reasonably acceptable to the Company. The Company will coordinate with the Demand Representative in connection with the fulfillment of its responsibilities pursuant to Section 2.6 and will be entitled to rely on the authority of the Demand Representative to act on behalf of all Holders with respect to the offering.

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(d)          Promptly upon receiving a Demand Notice, the Company shall provide the Holders with a form of Notice and Questionnaire (the “Notice and Questionnaire”) to be completed by each Holder desiring to have any of such Holder’s Registrable Securities included in the Demand Registration Statement. Prior to receiving a Demand Notice, the Company will also provide its then current form of Notice and Questionnaire to any Holder upon request. The Notice and Questionnaire shall solicit information from each Holder regarding the number of Registrable Securities such Holder desires to include in the Demand Registration Statement and such other information relating to such Holder as the Company determines is reasonably required in connection with the Demand Registration Statement, including, without limitation, all information relating to such Holder required to be included in the Demand Registration Statement or that may be required in connection with applicable FINRA or other regulatory filings to be made in connection with the Demand Registration Statement. The Company will not be required to file a Demand Registration Statement until it has received duly completed and executed Notice and Questionnaires from all Holders who participated in the Demand Notice (unless otherwise requested by the Demand Representative). The Company will include in the Demand Registration Statement any Registrable Securities requested to be included by any Holder who has delivered a duly completed and executed Notice and Questionnaire at least 10 days prior to the anticipated effectiveness of the Demand Registration Statement.

(e)          Notwithstanding the foregoing, the Company shall not be obligated to file a Demand Registration with respect to the Registrable Securities of any Holder during a period when such Holder is prohibited from selling its Registrable Securities or filing a registration statement with respect thereto pursuant to lock-up agreements entered into in connection with any prior underwritten offering conducted by the Company on its own behalf or on behalf of selling stockholders, unless such Holder has obtained the consent of the counterparties to such lock-agreements. The Demand Representative may revoke a Demand Notice at any time by providing written notice of such revocation to the Company and, for purposes of determining the number of Demand Registrations and Underwritten Offering Demands to which the Holders are entitled, a Demand Notice that was revoked will not count as a Demand Registration unless such revocation occurs after the Company has filed a Demand Registration Statement relating to the Demand Notice and the Company does not sell any shares of Common Stock for its own account pursuant to such Demand Registration Statement.

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Section 2.2           Shelf Registration Rights.

(a)          Subject to Section 2.13, beginning 14 months after the closing of the IPO (provided the Company is eligible to register the resale of the Registrable Securities on Form S-3 (or a similar successor form established by the Commission)) any Holder of at least 1.0% of the total outstanding shares of Common Stock shall have the right to make a written request to the Company (a “Resale Shelf Demand Notice”) to require the Company to file a registration statement registering the offering and sale of the Registrable Securities by the Holders thereof on a delayed or continuous basis pursuant to Rule 415 (a “Resale Shelf Registration Statement”) (provided that such Holder’s Resale Shelf Demand Notice shall be inapplicable if a resale shelf registration statement related to such Registrable Securities is effective). To the extent that the Company has an effective Automatic Shelf Registration Statement at the time it receives a Resale Shelf Demand Notice, the Company may file a prospectus or post-effective amendment, as applicable, to include in the Automatic Shelf Registration Statement the Registrable Securities to be registered pursuant to such Resale Shelf Demand Notice (in such a case, such prospectus or post-effective amendment together with the previously filed Automatic Shelf Registration Statement will be considered the Resale Shelf Registration Statement). The Company will have the right to include shares of Common Stock or other securities to be sold for its own account or other holders in the Resale Shelf Registration Statement. Any Resale Shelf Demand Notice must specify (A) the Registrable Securities proposed to be registered, (B) the proposed method of distribution of such Registrable Securities and (C) a single Person who shall serve as the representative of the Holders making the request (the “Resale Shelf Demand Representative”). The Company shall use its commercially reasonable best efforts to cause the Resale Shelf Registration Statement to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof, and, subject to Section 2.13, to keep such Resale Shelf Registration Statement (or a successor registration statement filed with respect to the Registrable Securities, which shall be deemed to be included within the definition of Resale Shelf Registration Statement for purposes of this Agreement) continuously effective for a period ending when all shares of Common Stock covered by the Resale Shelf Registration Statement are no longer Registrable Securities or when the Company ceases to be eligible to use Form S-3 (or a similar successor form established by the Commission), whichever is earlier. The Holders may not make more than one request for a Resale Shelf Registration Statement in any 12-month period, which request shall not be counted as an Underwritten Offering Demand for purposes of the limit provided in Section 2.3(a) but shall be counted as a Demand Registration for purposes of the limit provided in Section 2.1(a).

(b)          As soon as practicable prior to the Company’s anticipated filing of the Resale Shelf Registration Statement, the Company shall provide notice to the non-requesting Holders of such anticipated filing and shall provide all Holders with a form of the Notice and Questionnaire to be completed by each Holder desiring to have any of such Holder’s Registrable Securities included in the Resale Shelf Registration Statement. The Notice and Questionnaire provided shall solicit information from each Holder regarding the number of Registrable Securities such Holder desires to include in the Resale Shelf Registration Statement and such other information relating to such Holder as the Company determines is reasonably required in connection with the Resale Shelf Registration Statement, including, without limitation, all information relating to such Holder required to be included in the Resale Shelf Registration Statement or that may be required in connection with applicable FINRA or other regulatory filings to be made in connection with the Resale Shelf Registration Statement. Any Holder that has not delivered a duly completed and executed Notice and Questionnaire within five Business Days after the Company provides the notice referred to above will not be entitled to have such Holder’s Registrable Securities included in the Resale Shelf Registration Statement.

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(c)          After effectiveness of the Resale Shelf Registration Statement, upon the request of a transferee who becomes a Holder under this Agreement as a result of a permitted transfer pursuant to Section 3.4 hereof (accompanied by a duly completed and executed Notice and Questionnaire), the Company will promptly either (i) update the applicable information in the existing Resale Shelf Registration Statement by post-effective amendment or prospectus supplement thereto in order to permit such Holder to sell such Holder’s Registrable Securities thereunder or (ii) file (and use commercially reasonable best efforts to have become effective promptly thereafter, to the extent applicable) a prospectus supplement or additional registration statement registering the offering and sale of such Holder’s Registrable Securities on a delayed or continuous basis pursuant to Rule 415 (which, following its effectiveness, shall be deemed to be included within the definition of Resale Shelf Registration Statement for purposes of this Agreement).

Section 2.3           Underwritten Offering Demand Rights.

(a)          At any time beginning 14 months after the closing date of the IPO, any one or more Holder(s) may make written requests for underwritten offerings (a “Underwritten Offering Demand Notice”) of Registrable Securities included in a Demand Registration, Resale Shelf Registration Statement or pursuant to an Automatic Shelf Registration Statement, as applicable (each, an “Underwritten Offering Demand”); provided, however, that an Underwritten Offering Demand may only be made if (i) it relates to Registrable Securities having an aggregate Market Value of at least $40,000,000 on the trading day immediately preceding the date that the Underwritten Offering Demand Notice is sent to the Company and (ii) it shall not cause the Holders to request collectively more than two Underwritten Offering Demands or Demand Registrations relating to an underwritten offering, in the aggregate, in any consecutive 12-month period. Any Underwritten Offering Demand Notice will specify (A) the Registrable Securities proposed to be registered, (B) the desired Offering Launch Date for the offering, which shall not be less than seven (nor more than 15) Business Days following the date on which the Underwritten Offering Demand Notice is provided to the Company, and (C) a single Person who shall serve as the representative of the Holders with respect to the underwritten offering (the “Demand Offering Representative”). Subject to Section 2.5, the Company will have the right to include shares of Common Stock to be sold for its own account in an offering pursuant to an Underwritten Offering Demand.

(b)          Upon receiving an Underwritten Offering Demand Notice, the Company shall prepare the applicable offering documents and take such other actions as are set forth in Section 2.6 relating to such offering in order to permit the Offering Launch Date for such underwritten offering to occur on the date set forth in the Underwritten Offering Demand Notice. The Demand Offering Representative shall have the right to determine the actual Offering Launch Date; provided that, without the Company’s consent, the Offering Launch Date may not be more than 10 Business Days after the Offering Launch Date set forth in the Underwritten Offering Demand Notice. The Demand Offering Representative, on behalf of the Holders, will have the right to determine the structure of the offering and negotiate the terms of any underwriting agreement as they relate to the Holders, including the number of shares to be sold (if not all shares offered can be sold at the highest price offered by the underwriters), the offering price and underwriting discount. The Demand Offering Representative will also have the right to determine the underwriters (and their roles) in the offering; provided that such underwriters are reasonably acceptable to the Company. The Company will coordinate with the Demand Offering Representative in connection with the fulfillment of its responsibilities pursuant to Section 2.6 and will be entitled to rely on the authority of the Demand Offering Representative to act on behalf of all Holders with respect to the offering.

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(c)          Notwithstanding the foregoing, the Company shall not be obligated to effect, or take any action to effect, an underwritten offering with respect to the Registrable Securities of any Holder for which the proposed Offering Launch Date is scheduled to occur during a period when such Holder is prohibited from selling its Registrable Securities pursuant to lock-up agreements entered into in connection with any prior underwritten offering conducted by the Company, unless such Holder has obtained the consent of the counterparties to such lock-up agreements. The Demand Offering Representative may revoke an Underwritten Offering Demand Notice at any time by providing written notice of such revocation to the Company and, for purposes of determining the number of Demand Registrations and Underwritten Offering Demands to which the Holders are entitled, an Underwritten Offering Demand Notice that was revoked will not count as an Underwritten Offering Demand unless such revocation occurs after the Offering Launch Date and the Company does not sell any shares of Common Stock for its own account pursuant to such offering.

Section 2.4           Stand-Down. Following receipt of a Demand Notice related to an underwritten offering or an Underwritten Offering Demand Notice, the Company will have the right to delay the requested Offering if the Company intends to effect its own underwritten offering, by giving the Holder(s) of the Registrable Securities to be included in such Offering written notice of such intent (a “Stand-Down Notice”), whereby the Company’s obligation to cooperate with the Holder(s) and any underwriter in effecting an Offering shall be suspended until the later of the Resumption Date or the date of expiration of any lock-up agreements entered into by the Holder(s) with respect to the Company’s underwritten offering; provided, however, that (i) the Company will not be entitled to deliver a Stand-Down Notice in respect of a requested Offering later than 5 p.m. New York time on the next Business Day following receipt of notice from the Holder(s) requesting such Offering; (ii) the Company will not be entitled to more than two Stand-Down Notices in any 12-month period; and (iii) the Company will be deemed to have rescinded the Stand-Down Notice automatically, whereby the Company’s obligation to cooperate with the Holder(s) and any underwriter in effecting such an Offering pursuant to Section 2.1(a) or Section 2.3(a) shall resume, if the launch date in respect of the Company’s underwritten offering has not occurred by the end of the 15^th Business Day after the date of the Offering request (the date following automatic rescission of a Stand-Down Notice, a “Resumption Date”). The Holders acknowledge and agree that the receipt of any Stand-Down Notice may constitute material non-public information regarding the Company and shall keep the existence and contents of any Stand-Down Notice confidential. Notwithstanding anything to the contrary contained herein, if the Holders determine to rescind any prior Demand Notice or Underwritten Offering Demand Notice following receipt of a Stand-Down Notice, then the Holders may, at their election, give written notice of such election to the Company. Any such rescinded Demand Notice or Underwritten Offering Demand Notice shall not be counted as a Demand Registration request or an Underwritten Offering Demand for purposes of the limits in Section 2.1(a) and Section 2.3(a), respectively, and no Holder shall be required to reimburse the Company for any related expenses incurred by the Company.

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Section 2.5           Reduction of Offering. Notwithstanding anything contained herein, if the managing underwriter(s) of an Offering advise(s) the Company and the Holder(s) of the Registrable Securities included in such Offering, in writing, that the aggregate number of shares of Common Stock to be sold by the Company and Registrable Securities requested to be included in the Offering exceeds the amount that they believe could be sold without adversely affecting the Offering, then the aggregate number of shares of Common Stock to be sold by the Company and Registrable Securities will be reduced to the amount recommended by such managing underwriter(s). Such reduction will be achieved by, first, reducing, or eliminating if necessary, all shares of Common Stock requested or desired to be included in such Offering by the Company for its own account and, then, if necessary, reducing the Registrable Securities requested to be included by the Holders pro rata based on the number of Registrable Securities requested to be included in such Offering or in such other manner as is agreed to by the Holders.

Section 2.6           Registration Procedures; Filings; Information. In connection with a Registration Statement or Offering in which one or more Holders are participating:

(a)          The Company will, reasonably in advance of the filing of a Registration Statement or prospectus or any amendment or supplement thereto which relates to Registrable Securities, furnish to each Holder holding such Registrable Securities (and, if such filing relates to an underwritten offering, to the managing underwriter(s) for such offering and its counsel, upon request by the Holders holding a majority of the Registrable Securities included in such offering) a copy of such Registration Statement, prospectus or amendment or supplement thereto as proposed to be filed, which shall be subject to review and comment by such parties, and thereafter furnish to each Holder of such Registrable Securities such number of conformed copies of such Registration Statement, prospectus or amendment or supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) as such Holder may reasonably request for such Holder’s records or in order to facilitate the disposition of the Registrable Securities owned by such Holder; provided, however, that this Section 2.6(a) shall not apply to (i) an amendment or supplement relating solely to securities other than the Registrable Securities, and (ii) an amendment or supplement by means of an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q, a Proxy Statement on Schedule 14A, a Current Report on Form 8-K or a Registration Statement on Form 8-A or any amendments thereto filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into a Registration Statement or prospectus. The Company shall not file any registration statement or prospectus or any amendment or supplement thereto which relates to Registrable Securities if reasonably objected to in writing by, (A) with respect to a Demand Registration, the Demand Representative, (B) with respect to an Underwritten Offering Demand, the Demand Offering Representative or (C) with respect to a Resale Shelf Registration Statement, the Resale Shelf Demand Representative.

(b)          After the filing of a Registration Statement, the Company will immediately notify each Holder holding Registrable Securities covered by such Registration Statement of any stop order issued or threatened by the Commission and use its commercially reasonable best efforts to prevent the entry of such stop order or to remove it if entered. If a stop order previously in effect with respect to a Registration Statement is removed, the Company will promptly notify each Holder holding Registrable Securities covered by such Registration Statement. Each Holder agrees that it will not dispose of any Registrable Securities pursuant to a Registration Statement while any stop order is in effect with respect to such Registration Statement.

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(c)          In connection with the filing of a Registration Statement including Registrable Securities or an Offering in which one or more Holders are participating, the Company will use its commercially reasonable best efforts to (i) register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdictions in the United States (where an exemption does not apply) as any Holder or managing underwriter(s), if any, reasonably (in light of such Holder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition of the Registrable Securities owned by such Holder; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (c), (B) subject itself to general taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction. The Company will promptly notify each Holder of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities held by such Holder for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose or the lifting of a suspension that was previously in effect. Each Holder agrees that it will not dispose of any Registrable Securities pursuant to a Registration Statement or an Offering in a manner requiring qualification under the securities or “blue sky” laws of any jurisdiction during any period of time while such qualification has been suspended.

(d)          The Company will immediately notify each Holder at any time when a prospectus relating to such Holder’s Registrable Securities is required to be delivered under the Securities Act of the occurrence of an event (which may include obtaining preliminary information regarding the Company’s historical financial results that have not yet been publicly announced) a result of which the Company reasonably concludes a supplement or amendment to such prospectus should be prepared in order to ensure that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Upon the occurrence of such event, the Company will promptly prepare, file and, if applicable, make available to each Holder any such supplement or amendment; provided that any supplement or amendment relating to the historical financial results of the Company need not be prepared, filed or made available prior to the Company’s regularly scheduled date for the filing of such results. The Company will promptly notify each Holder when such supplement or amendment has been filed. Each Holder agrees that, upon receipt of any notice from the Company of the occurrence of an event as set forth above, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities until such Holder’s receipt of written notice from the Company that the use of the Registration Statement may be resumed or such Holder’s receipt of copies of such supplement or amendment that has been filed. Each Holder also agrees that such Holder will treat as confidential the receipt of any notice from the Company of the occurrence of an event as set forth above and shall not disclose or use the information contained in such notice without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by a Holder in breach of the terms of this Agreement.

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(e)          The Company will use its commercially reasonable best efforts to timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its securityholders an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act.

(f)          In the case of an Offering in which one or more Holders are participating, the Company will enter into and perform its obligations under customary agreements (including an underwriting agreement, if any, in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities (including, to the extent reasonably requested by the managing underwriter(s), sending appropriate officers of the Company to attend “road shows” scheduled in reasonable number and at reasonable times in connection with any such Offering, and obtaining customary comfort letters and legal opinions) in connection with such Offering.

(g)          The Company will make available for inspection by any Holder, any underwriter participating in any disposition of such Registrable Securities pursuant to a Registration Statement and any attorney, accountant or other professional retained by any such Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise customary due diligence, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Persons in connection with the disposition of Registrable Securities pursuant to a Registration Statement, subject to entry by each such Person of a customary confidentiality agreement in a form reasonably acceptable to the Company.

(h)          The Company will use its commercially reasonable best efforts to cause all Registrable Securities covered by any Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed.

(i)          In addition to the Notice and Questionnaire, the Company may require each Holder to promptly furnish in writing to the Company such information regarding such Holder, the Registrable Securities held by it and the intended method of distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such Registration Statement or Offering. Each Holder further agrees to furnish as soon as reasonably practicable to the Company all information required to be disclosed in order to provide that information previously furnished to the Company by such Holder does not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements in any registration statement not misleading in light of the circumstances in which they were made, and the Company agrees to promptly update any Registration Statement to reflect such information.

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(j)          In the case of an Offering, no Holder may participate unless such Holder (i) agrees to sell the Registrable Securities it desires to have included in the Offering on the basis provided in underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements, as negotiated by the Company (other than those provisions relating to the Holders); provided that such Holder shall not be required to make any representations or warranties or provide indemnification other than those related to title and ownership of such Holder’s shares and as to the accuracy and completeness of statements made in the applicable registration statement, prospectus or other document in reliance upon and in conformity with written information furnished to the Company or the managing underwriter(s) by such Holder for use therein; provided, further, that that the liability of such Holder with respect thereto shall be limited to the net proceeds (after deducting underwriting commissions and discounts, if any) received by such Holder from the sale of its Registrable Securities pursuant to a registration statement with respect to such Offering.

(k)          No Holder will offer or sell, without the Company’s consent, any Registrable Securities by means of any “free writing prospectus” (as defined in Rule 405 under the Securities Act) that is required to be filed by the Holder with the Commission pursuant to Rule 433 under the Securities Act.

(l)          The Company will cooperate with the Holders and the managing underwriter(s) to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required under applicable law) representing Registrable Securities sold under any Registration Statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter(s) or such Holders may request and cause its transfer agent to cooperate in connection with any transfer of Registrable Securities pursuant to a Registration Statement or Offering.

Section 2.7           Registration Expenses. In connection with any Registration Statement or Offering in which one or more Holders are participating, the Company shall pay all customary registration and offering expenses incurred, regardless of whether such Registration Statement is declared effective by the Commission or such Offering is completed, including: (a) all registration and filing fees, (b) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (c) printing expenses, (d) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (e) the fees and expenses incurred in connection with the listing of the Registrable Securities, (f) the fees and disbursements of legal counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company, including in connection with the preparation of comfort letters, and any transfer agent and registrar fees and (g) the reasonable fees and expenses of any special experts retained by the Company in connection with such Registration Statement and/or Offering. The Company shall have no obligation to pay any transfer taxes or underwriting, brokerage or other similar fees, discounts or commissions attributable to the sale of Registrable Securities (which expenses shall be borne by the Holders) or out-of-pocket expenses borne by the Holders or the underwriters.

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Section 2.8           Indemnification by the Company. The Company agrees to indemnify and hold harmless each Holder of Registrable Securities, its officers, directors, agents, partners, members, employees, managers, advisors, attorneys, representatives and Affiliates, and each Person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against, as incurred, any and all losses, claims, damages and liabilities (or actions in respect thereof) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, preliminary prospectus, prospectus, or free writing prospectus relating to the Registrable Securities (in each case, as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or that arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, (with respect to any preliminary prospectus, prospectus or free writing prospectus, in light of the circumstances under which they were made), not misleading, except insofar as such losses, claims, damages or liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission included in reliance upon and in conformity with information furnished in writing to the Company by such Holder or on such Holder’s behalf expressly for inclusion therein.

Section 2.9           Indemnification by Holders of Registrable Securities. Each Holder agrees, severally but not jointly or jointly and severally, to indemnify and hold harmless the Company, its officers, directors, agents, employees, attorneys, representatives and Affiliates, and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Holder, but only with respect to information relating to such Holder included in reliance upon and in conformity with information furnished in writing by such Holder or on such Holder’s behalf expressly for use in any registration statement, preliminary prospectus, prospectus or free writing prospectus relating to the Registrable Securities, or any amendment or supplement thereto; provided that the liability of each Holder shall be limited to the net proceeds (after deducting underwriting commissions and discounts, if any) received by such Holder from the sale of its Registrable Securities pursuant to any such registration statement. In case any action or proceeding shall be brought against the Company or its officers, directors, agents, employees, attorneys, representatives or Affiliates or any such controlling person, in respect of which indemnity may be sought against such Holder, such Holder shall have the rights and duties given to the Company, and the Company or its officers, directors, agents, employees, attorneys, representatives or Affiliates or such controlling person shall have the rights and duties given to such Holder, by Section 2.10.

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Section 2.10         Conduct of Indemnification Proceedings. In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.8 or Section 2.9, such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Party to give such notice will not relieve such Indemnifying Party of any obligations under Section 2.8 or Section 2.9, except to the extent such Indemnifying Party is materially prejudiced by such failure; provided further, that the failure to notify an Indemnifying Party shall not relieve it from any liability that it may have to an Indemnified Party otherwise under Section 2.8 or Section 2.9. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (b) representation of the Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnifying Party and the Indemnified Party. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.8 hereof, the Holders which owned a majority of the Registrable Securities sold under the applicable registration statement and (ii) in the case of Persons indemnified pursuant to Section 2.9, the Company. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement involves monetary damages only and includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding without any admission of liability by such Indemnified Party.

Section 2.11         Contribution. If the indemnification provided for in Section 2.8 or Section 2.9 hereof is held by a court of competent jurisdiction to be unavailable to an Indemnified Party or insufficient in respect of any losses, claims, damages or liabilities that otherwise would have been covered by Section 2.8 or Section 2.9 hereof, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and of each such Indemnified Party, on the other hand, in connection with such statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party on the one hand and of each Indemnified Party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.11 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.11, no Holder shall be required to contribute any amount which in the aggregate exceeds the amount by which the net proceeds actually received by such Holder from the sale of its securities (after deducting underwriting commissions and discounts, if any) to the public exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holder’s obligations to contribute pursuant to this Section 2.11, if any, are several in proportion to the proceeds of the offering actually received by such Holder (after deducting underwriting commissions and discounts, if any) bears to the total proceeds of the offering received by all the Holders and not joint.

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Section 2.12         Rule 144. The Company covenants that it will use its commercially reasonable best efforts to (a) make and keep current public information regarding the Company available as those terms are defined in Rule 144, (b) file in a timely manner any reports and documents required to be filed by it under the Securities Act and the Exchange Act, (c) furnish to any Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time more than 90 days after the effective date of the registration statement for the Company’s initial public offering), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), and (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the Commission, and (d) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

Section 2.13         Suspension of Use of Registration Statement. The Company will have the right to postpone its obligations in connection with a Demand Registration or Underwritten Offering Demand and/or suspend use of Registration Statements that have become effective for up to 30 consecutive days (not more than twice in any consecutive 12-month period nor less than 30 days from the termination of the prior Suspension Period) (a “Suspension Period”) in the event that the Company determines in its good faith judgment that the Demand Registration or Underwritten Offering Demand and/or use of Registration Statements would require the Company to disclose material, non-public information, the disclosure of which would be harmful to the Company or with respect to which the Company otherwise has a bona fide business purpose for preserving as confidential; provided that the Company notifies the applicable Holders in writing of its determination to this effect (a “Suspension Notice”). Each Holder agrees that such Holder shall not dispose of any Registrable Securities pursuant to a Registration Statement during any Suspension Period, shall treat as confidential the receipt of such Suspension Notice and shall not disclose or use the information contained in such Suspension Notice without the prior written consent of the Company until the earlier of such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by a Holder in breach of the terms of this Agreement, or the end of the applicable Suspension Period. The Company agrees to notify the Holders in writing promptly following the end of a Suspension Period.

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Section 2.14         Lock-Ups. In connection with any underwritten offering of Common Stock by a Holder pursuant to this Agreement or by the Company, the Company and each Holder (for so long as such Holder files Forms 3, 4 or 5 in accordance with Section 16 of the Exchange Act (or similar successor forms established by the Commission) solely in its capacity as a stockholder of the Company) agree to enter into customary lock-up agreements, as negotiated by the Company, restricting, among other things, future sales of Common Stock by such Persons; provided that the length of the restrictions contained in the lock-up agreement required to be signed by the Holders shall not extend beyond the lesser of 45 days (plus a customary extension period in order to address FINRA or other regulatory restrictions relating to the publication of research reports by certain analysts in connection with or within a certain period of time after the expiration of a lock-up agreement) or the duration of the similar restrictions agreed to by the Company, with respect to the Company’s or its directors’ and executive officers’ activity (whichever period is shorter), in connection with such offering.

Article III

MISCELLANEOUS

Section 3.1           Remedies. In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

Section 3.2           Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of the Company and Holders that hold a majority of the Registrable Securities held by all of the Holders. No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

Section 3.3           Notices. All notices and other communications in connection with this Agreement shall be made in writing by hand delivery or courier guaranteeing overnight delivery, by facsimile transmission or such other means as are agreed to by the parties hereto:

(a)          if to any Holder, initially to the address indicated in such Holder’s Notice and Questionnaire or, if no Notice and Questionnaire has been delivered, to the address or facsimile number provided by the Initial Holder set forth on Schedule I hereto; and

(b)          if to the Company, initially at Paramount Group, Inc., 1633 Broadway, Suite 1801, New York, NY 10019, Attention: General Counsel, facsimile: (212) 237-3154 or to such other address as the Company may hereafter specify in writing.

All such notices and communications shall be deemed to have been duly given, delivered, sent, received and provided for purposes of this Agreement: at the time delivered by hand, if personally delivered; and on the next Business Day, if timely delivered to a courier guaranteeing overnight delivery.

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Section 3.4           Successors and Assigns; Assignment of Registration Rights

. Any Holder may transfer its rights under this Agreement to one or more member(s) of the Otto Family (a “Permitted Investor Transferee”). Any permitted transferee pursuant to this Section 3.4 must agree in writing to be bound by the provisions of this Agreement (and execute a counterpart signature page or joinder agreement hereto setting forth such obligations) in order to become a party to this Agreement, in which case such Permitted Investor Transferee will be considered a Holder. Except as set forth in this Section 3.4, the rights under this Agreement are not transferable.

Section 3.5           Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 3.6           Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to the choice of law or conflict of law provisions thereof.

Section 3.7           Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 3.8           Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.9           Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.10         Termination. This Agreement and the rights and obligations of the parties hereunder shall terminate (a) with respect to a Holder when such Holder no longer holds Registrable Securities and (b) with respect to the Company on the first date on which the Registrable Securities all may be sold under Rule 144 within 90 days and constitute less than the lesser of 5.0% of the total outstanding shares of Common Stock or $40,000,000 (based on the average Market Value over a period of ten consecutive trading days); except, in each case, for any obligations under Section 2.7, Section 2.8, Section 2.9, Section 2.10, Section 2.11 and Article III.

Section 3.11         Waiver of Jury Trial. The parties hereto (including any Initial Holder and any subsequent Holder) irrevocably waive any right to trial by jury.

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Section 3.12         Subsequent Registration Rights. The Company may grant registration rights in the future, provided they are not inconsistent with the provisions of this Agreement, and provided further that the Company shall not enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include such holder’s securities of the Company in any registration statement (other than a shelf registration statement) or underwritten offering demanded by the Holders pursuant to this Agreement.

[SIGNATURE PAGES FOLLOW]

19

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

PARAMOUNT GROUP, INC.
By:	/s/ Albert Behler
	Name: Albert Behler
	Title:   Chairman, Chief Executive Officer and President

Registration Rights Agreement

INITIAL HOLDER:

/s/ Alexander Otto

Print Name: Alexander Otto

Registration Rights Agreement

INITIAL HOLDER:

AROSA Vermoegensverwaltungsgesellschaft m.b.H., a German limited liability company

By: Thomas Armbrust and Dr. Thomas Finne, individuals

Its:  Managing Directors

/s/ Thomas Armbrust

Name: Thomas Armbrust

/s/ Dr. Thomas Finne

Name: Dr. Thomas Finne

Registration Rights Agreement

INITIAL HOLDER:

/s/ Katharina Otto-Bernstein

Print Name: Katharina Otto-Bernstein

Registration Rights Agreement

INITIAL HOLDER:

/s/ Frank Otto

Print Name: Frank Otto

Registration Rights Agreement

INITIAL HOLDER:

/s/ Ingvild Goetz

Print Name: Ingvild Goetz

Registration Rights Agreement

INITIAL HOLDER:

/s/ Ingvild Goetz

Print Name: Julia Stoecker

Ingvild Goetz

by Power of Attorney

Registration Rights Agreement

INITIAL HOLDER:

/s/ Ingvild Goetz

Print Name: Sarah Pisani

Ingvild Goetz

by Power of Attorney

Registration Rights Agreement

INITIAL HOLDER:

/s/ Maren Otto

Print Name: Maren Otto

Registration Rights Agreement

INITIAL HOLDER:

/s/ Dr. Michael Otto

Print Name: Benjamin Otto

Dr. Michael Otto

by Power of Attorney

Registration Rights Agreement

INITIAL HOLDER:

/s/ Dr. Michael Otto

Print Name: Janina Otto

Dr. Michael Otto

by Power of Attorney

Registration Rights Agreement

INITIAL HOLDER:

/s/ Michael Otto

Print Name: Dr. Michael Otto

Registration Rights Agreement

INITIAL HOLDER:
Werner Otto Trust
By:	/s/ Jay A. Lipe
	Name: Jay A. Lipe
	Title:   Managing Trustee

Registration Rights Agreement

Schedule I

Alexander Otto

AROSA Vermoegensverwaltungsgesellschaft m.b.H.

Frank Otto

Katharina Otto-Bernstein

Ingvild Goetz

Julia Stoecker

Sarah Pisani

Maren Otto

Benjamin Otto

Janina Otto

Dr. Michael Otto

Werner Otto Trust

Address for all Holders:

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG
Werner-Otto-Straße 1-7
D-22179 Hamburg, Germany
Attention: Thomas Armbrust
Fax: +49-40-6461-2960

EX-99.11

Exhibit 11

FORM OF LOCK-UP AGREEMENT

l, 2014

Merrill Lynch, Pierce, Fenner & Smith Incorporated,

as Representative of the several

Underwriters to be named in the

within-mentioned Underwriting Agreement

One Bryant Park 

New York, New York 10036

Re: Proposed Public Offering by Paramount Group, Inc.

Dear Sirs:

The undersigned, a stockholder and/or an officer and/or director of Paramount Group, Inc., a Maryland corporation (the “Company”) and/or holder of common units in Paramount Group Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), understands that Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company and the Operating Partnership, providing for the public offering (the “Public Offering”) of shares (the “Securities”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder and/or an officer and/or director of the Company, and/or as a holder of common units in the Operating Partnership, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Underwriting Agreement that, during the period beginning on the date hereof and ending on the date that is 180 days from the date of the Underwriting Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or exercise any right with respect to the registration of any of the Lock-Up Securities, or file or cause to be filed any registration statement in connection therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise.

Notwithstanding the foregoing, the undersigned may pledge the Lock-Up Securities without the prior written consent of Merrill Lynch solely to the extent such pledge is (A) in connection with the indemnification obligations of the undersigned relating to New York real property transfer tax and for the benefit of the Company or the Operating Partnership; or (B) pursuant to the terms of the limited partnership agreement of the Operating Partnership and for the benefit of the Company or the Operating Partnership, provided that (i) the undersigned will use the undersigned’s reasonable best efforts to notify Merrill Lynch at least three business days prior to any transfer of the Lock-Up Securities pursuant to any of the foregoing pledges that is required to be reported in any public report or filing with the Securities and Exchange Commission or otherwise, and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers. Furthermore, notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior written consent of Merrill Lynch, provided that (1) Merrill Lynch receives a signed lock-up agreement for the balance of the lockup period from each donee, trustee, distributee, or transferee, as the case may be, (2) any such transfer shall not involve a disposition for value (except with regards to any transfer or sale pursuant to clause (vi) below), (3) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended (except with regards to any transfer or sale pursuant to clause (vi) below, prior to which the undersigned will notify Merrill Lynch in writing of its intention to file a Form 4, or a disposition by will or intestacy), and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers:

(i)          as a bona fide gift or gifts or other dispositions by will or intestacy; or

(ii)         to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); or

(iii)        as a distribution to limited partners, members or stockholders of or other holders of equity interests in the undersigned; or

(iv)        to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned; or

(v)         to an immediate family member of the undersigned or entities wholly owned by or for the benefit of the undersigned, the undersigned’s affiliates or immediate family members of the undersigned, or to an entity that is owned by the undersigned and the undersigned’s affiliates alone or with other stockholders that received Common Stock in connection with the Formation Transactions (as that term is defined in the Underwriting Agreement); or

(vi)        to a spouse, former spouse, child or other dependent pursuant to a domestic relations order or an order of a court of competent jurisdiction; or

(vii)       to the Company upon termination of the undersigned’s employment with the Company; or

(viii)      to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses(i) through (vi) above.

Furthermore, the undersigned may sell shares of Common Stock of the Company purchased by the undersigned on the open market following the completion of the Public Offering if and only if (i) such sales are not required to be reported in any public report or filing with the Securities and Exchange Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales.

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The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions.

The undersigned understands that, if the Underwriting Agreement is not executed, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released from all obligations under this lock-up agreement. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this lock-up agreement.

[Signature Page Follows]

3

Very truly yours,

Signature: 

Print Name:

Lock-Up Agreement

EX-99.12

Exhibit 12

FORM OF LOCK-UP AGREEMENT

l, 2014

Merrill Lynch, Pierce, Fenner & Smith Incorporated,

as Representative of the several

Underwriters to be named in the

within-mentioned Underwriting Agreement

One Bryant Park
New York, New York 10036

Re: Proposed Public Offering by Paramount Group, Inc.

Dear Sirs:

The undersigned, a stockholder and/or an officer and/or director of Paramount Group, Inc., a Maryland corporation (the “Company”) and/or holder of common units in Paramount Group Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), understands that Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company and the Operating Partnership, providing for the public offering (the “Public Offering”) of shares (the “Securities”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder and/or an officer and/or director of the Company, and/or as a holder of common units in the Operating Partnership, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Underwriting Agreement that, during the period beginning on the date hereof and ending on the date that is 180 days from the date of the Underwriting Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or exercise any right with respect to the registration of any of the Lock-Up Securities, or file or cause to be filed any registration statement in connection therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise.

Notwithstanding the foregoing, the undersigned may pledge the Lock-Up Securities without the prior written consent of Merrill Lynch solely to the extent such pledge is (A) in connection with the indemnification obligations of the undersigned relating to New York real property transfer tax and for the benefit of the Company or the Operating Partnership; (B) pursuant to the terms of the limited partnership agreement of the Operating Partnership and for the benefit of the Company or the Operating Partnership; or (C) to secure the undersigned’s obligations under notes issued by the undersigned to CNBB-RDF Holdings, LP (the CNBB Note Pledge”), provided that (i) the undersigned will use the undersigned’s reasonable best efforts to notify Merrill Lynch at least three business days prior to any transfer of the Lock-Up Securities pursuant to any of the foregoing pledges that is required to be reported in any public report or filing with the Securities and Exchange Commission or otherwise, and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers. Furthermore, notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior written consent of Merrill Lynch, provided that (1) Merrill Lynch receives a signed lock-up agreement for the balance of the lockup period from each donee, trustee, distributee, or transferee, as the case may be, (2) any such transfer shall not involve a disposition for value (except with regards to any transfer or sale pursuant to clause (vi) below), (3) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended (except with regards to any transfer or sale pursuant to clause (vi) below, prior to which the undersigned will notify Merrill Lynch in writing of its intention to file a Form 4, or a disposition by will or intestacy), and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers:

(i)          as a bona fide gift or gifts or other dispositions by will or intestacy; or

(ii)         to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); or

(iii)        as a distribution to limited partners, members or stockholders of or other holders of equity interests in the undersigned; or

(iv)        to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned; or

(v)         to an immediate family member of the undersigned or entities wholly owned by or for the benefit of the undersigned, the undersigned’s affiliates or immediate family members of the undersigned, or to an entity that is owned by the undersigned and the undersigned’s affiliates alone or with other stockholders that received Common Stock in connection with the Formation Transactions (as that term is defined in the Underwriting Agreement); or

(vi)        to a spouse, former spouse, child or other dependent pursuant to a domestic relations order or an order of a court of competent jurisdiction; or

(vii)       to the Company upon termination of the undersigned’s employment with the Company; or

(viii)      to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses(i) through (vi) above.

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Furthermore, the undersigned may sell shares of Common Stock of the Company purchased by the undersigned on the open market following the completion of the Public Offering if and only if (i) such sales are not required to be reported in any public report or filing with the Securities and Exchange Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales.

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions.

The undersigned understands that, if the Underwriting Agreement is not executed, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released from all obligations under this lock-up agreement. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this lock-up agreement.

[Signature Page Follows]

3

Very truly yours,

Signature: 

Print Name:

Lock-Up Agreement

EX-99.13

Exhibit 13

STOCKHOLDERS AGREEMENT

OF

PARAMOUNT GROUP, INC.

Dated as of November 6, 2014

Table of Contents

		Page
ARTICLE I – DEFINED TERMS		1
Section 1.1	Defined Terms	1
ARTICLE II – DIRECTOR NOMINATION RIGHTS		3
Section 2.1	Director Nomination Rights	3
Section 2.2	Director Qualifications	5
Section 2.3	Vacancies	5
ARTICLE III - GENERAL PROVISIONS		6
Section 3.1	Termination	6
Section 3.2	Notices	6
Section 3.3	Amendment; Waiver	7
Section 3.4	Successors and Assigns	7
Section 3.5	Third Parties	7
Section 3.6	Governing Law	7
Section 3.7	Waiver of Trial by Jury	7
Section 3.8	Specific Performance	7
Section 3.9	Entire Agreement	8
Section 3.10	Severability	8
Section 3.11	Table of Contents, Headings and Captions	8
Section 3.12	Counterparts	8
Section 3.13	Otto Stockholder Representative	8

STOCKHOLDERS AGREEMENT

OF

PARAMOUNT GROUP, INC.

This STOCKHOLDERS AGREEMENT (as the same may be amended, modified or supplemented from time to time, this “Agreement”), dated as of November 6, 2014, concerning Paramount Group, Inc., a Maryland corporation (the “Company”), is entered into by and between the Company and Maren Otto, Alexander Otto and Katharina Otto-Bernstein (collectively, together with any permitted assignees pursuant to Section 3.4, the “Initial Otto Stockholders”).

WHEREAS, the Company has entered into an Underwriting Agreement to sell shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) to the underwriters named therein in connection with the Company’s initial public offering (the “IPO”);

WHEREAS, prior to or concurrently with the IPO, the Initial Otto Stockholders will cause certain entities owned directly or indirectly by the Initial Otto Stockholders to merge with and into the Company in exchange for shares of Common Stock; and

WHEREAS, on and following the date of completion of the IPO (the “Closing Date”), the Initial Otto Stockholders and the Company wish to provide for certain director nomination rights.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

ARTICLE I – DEFINED TERMS

Section 1.1           Defined Terms.

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

“Agreement” shall have the meaning set forth in the Preamble.

“Board” shall mean the board of directors of the Company.

“Cause” shall have the meaning ascribed to such term in the Articles of Amendment and Restatement of the Company as approved by the Company and intended to be filed promptly after the Company enters into this Agreement, as they may be amended, restated or supplemented from time to time.

“Closing Date” shall have the meaning set forth in the Recitals.

“Common Stock” shall have the meaning set forth in the Recitals.

“Company” shall have the meaning set forth in the Preamble.

“Designation Notice” shall have the meaning set forth in Section 2.1(b).

“Director” shall mean each member of the Board.

“Initial Otto Family Ownership Percentage” shall mean the aggregate number of shares of Common Stock owned by the Otto Stockholders on the Closing Date (other than shares of Common Stock purchased by the Otto Stockholders for cash in the IPO or a concurrent private placement), divided by (i) the total number of shares of Common Stock outstanding on the Closing Date plus (ii) the number of shares of Common Stock, if any, issued upon exercise of the underwriters’ over-allotment option granted in connection with the IPO.

“Initial Otto Stockholders” shall have the meaning set forth in the Preamble.

“IPO” shall have the meaning set forth in the Recitals.

“Majority-in-Interest” shall have the meaning set forth in the definition of “Otto Stockholder Representative.”

“Otto Designee” shall mean: (i) initially, the following individuals who are Directors upon the completion of the IPO: Albert Behler, Thomas Armbrust and Katharina Otto-Bernstein, and (ii) thereafter, at any time, each individual designated by the Otto Stockholder Representative pursuant to this Agreement for nomination or appointment to the Board at or after the then most recent annual meeting of the stockholders of the Company (or special meeting in lieu of an annual meeting at which Directors are to be elected) who is either serving as a Director or whose nomination or appointment to the Board is pending. Albert Behler shall be an Otto Designee for so long as he continues to serve as the Chief Executive Officer of the Company.

“Otto Stockholder Representative” shall mean (i) initially, Dr. Thomas Finne and (ii) thereafter, at any time, an individual designated pursuant to Section 3.13(c) by the Initial Otto Stockholders holding a majority of the shares of Common Stock held by all Initial Otto Stockholders at such time (the “Majority-in-Interest”).

“Otto Stockholders” shall mean (i) the Initial Otto Stockholders, (ii) the lineal descendants of the Initial Otto Stockholders, (iii) any trust or any family foundation which has exclusively been established in favor of one or several of the individuals named under (i) and (ii) above and (iv) any partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity, in which the individuals or entities named under (i), (ii) or (iii) hold (either directly or indirectly) more than 50% of the voting rights or more than 50% of the equity capital of any such partnership, firm, corporation, association, trust, unincorporated organization, joint venture, limited liability company or other legal entity.

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ARTICLE II– DIRECTOR NOMINATION RIGHTS

Section 2.1           Director Nomination Rights.

(a)          Except as reduced pursuant to this Section 2.1(a) or as otherwise provided in this Agreement, the Initial Otto Stockholders shall collectively have the right, but not the obligation, to designate up to three individuals for nomination to the Board at each annual meeting of the stockholders of the Company (or special meeting in lieu of an annual meeting at which all Directors are to be elected). Notwithstanding anything to the contrary in this Agreement and without any further action by the Company, the number of individuals the Initial Otto Stockholders shall have the right to designate for nomination to the Board shall be reduced as follows:

(i)          from and after the time that the aggregate number of shares of Common Stock owned by the Otto Stockholders has been 3.25% less of the Company’s total number of outstanding shares of Common Stock than the Initial Otto Family Ownership Percentage for a period of 12 consecutive months, the number of individuals that the Initial Otto Stockholders shall collectively have the right to designate for nomination to the Board shall be reduced to two;

(ii)         from and after the time that the aggregate number of shares of Common Stock owned by the Otto Stockholders has been 6.5% less of the Company’s total number of outstanding shares of Common Stock than the Initial Otto Family Ownership Percentage for a period of 12 consecutive months, the number of individuals that the Initial Otto Stockholders shall collectively have the right to designate for nomination to the Board shall be reduced to one; and

(iii)        from and after the time that the aggregate number of shares of Common Stock owned by the Otto Stockholders has been 9.75% less of the Company’s total number of outstanding shares of Common Stock than the Initial Otto Family Ownership Percentage for a period of 12 consecutive months, the Initial Otto Stockholders’ right to designate individuals for nomination to the Board shall terminate and be of no further force and effect.

The Otto Stockholder Representative shall notify the Company as promptly as practicable after becoming aware of a reduction in the number of individuals that the Initial Otto Stockholders have the right to designate for nomination to the Board pursuant to this Section 2.1(a). The Otto Stockholder Representative shall provide such certifications regarding the ownership of shares of Common Stock by the Otto Stockholders as may reasonably be requested by the Company in order to confirm the parties’ rights pursuant to this Agreement.

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(b)          For each annual meeting of the stockholders of the Company, the Otto Stockholder Representative (on behalf of the Initial Otto Stockholders) shall submit in writing to the Company the names of the individuals the Initial Otto Stockholders are designating for nomination to the Board (the “Designation Notice”), if any, at least 120 days prior to the first anniversary of the date on which the proxy statement for the preceding year’s annual meeting was filed with the United States Securities and Exchange Commission; provided, however, that with respect to the 2015 annual meeting, a special meeting in lieu of an annual meeting at which all Directors are to be elected, or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, the Designation Notice to be timely must be so submitted not later than the later of the 120^th day prior to the date of such meeting or the tenth day following the day on which public announcement or notice to the Initial Otto Stockholders of the date of such meeting is first made. In the event the Otto Stockholder Representative has not provided the Designation Notice within the time period set forth above for a meeting, the Initial Otto Stockholders will be deemed to have designated the Otto Designees currently serving on the Board for reelection at such meeting. In the event that the Initial Otto Stockholders have designated in the Designation Notice for a meeting less than the total number of individuals the Initial Otto Stockholders shall be entitled to designate pursuant to Section 2.1(a), the Board shall have the right to nominate or appoint a number of individuals of its choosing to the Board equal to the difference between the number of individuals the Initial Otto Stockholders shall be entitled to designate and the number actually designated in the Designation Notice.

(c)          At each annual meeting of the stockholders of the Company (or special meeting in lieu of an annual meeting at which Directors are to be elected), the Board shall nominate the Otto Designees for election at such meeting, solicit proxies (or cause the Company to solicit proxies) in favor of the election of the Otto Designees in a manner consistent with its solicitation of proxies for the election of all other Director candidates nominated by the Board and recommend that the stockholders of the Company elect to the Board each of the Otto Designees. Neither the Board nor the Company shall take any action to oppose the election of the Otto Designees, including, without limitation, nominating for election to the Board more individuals than the number of Director seats available or recommending that stockholders vote in favor of any nominee opposing an Otto Designee.

(d)          If the Board becomes classified, the Otto Designees serving as Directors at the time of such classification shall be placed among the classes in equal proportion as near as possible as determined by the Board in good faith. If there are fewer Otto Designees than classes, the Otto Designees shall be placed in classes with the earliest expiring terms. With respect to each annual meeting of the stockholders of the Company (or special meeting in lieu of an annual meeting at which Directors are to be elected) occurring at a time when the Board is classified, the Initial Otto Stockholders may designate a number of individuals for nomination to the Board equal to the number of Otto Designees (or replacements of Otto Designees previously nominated by the Board due to the Initial Otto Stockholders designating less than the total number of individuals the Initial Otto Stockholders were entitled to designate) that have terms expiring in such year; provided that the collective number of such designees together with the number of Otto Designees otherwise serving on the Board does not exceed the number of individuals that the Initial Otto Stockholders have the right to designate for nomination to the Board pursuant to Section 2.1(a).

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Section 2.2           Director Qualifications.

(a)          No individual may be designated by the Initial Otto Stockholders for nomination or appointment to the Board at any time: (i) if, within ten years of such time, any of the events described in Items 401(f)(2)-(8) of Regulation S-K under the Securities Act of 1933, as amended (or any successor regulation) occurred, unless the Company, in its sole discretion, concludes that disclosure of such event would not be required, (ii) if such individual would be prohibited by applicable law from serving as a Director or (iii) if a majority of the members of the Board, other than the Otto Designees, determine, in good faith, that such individual’s service as a Director would be materially detrimental to the Company (in which case the Initial Otto Stockholders will have 30 days to designate a replacement pursuant to a Designation Notice delivered in accordance with Section 2.1(b) without giving effect to the deadlines set forth therein). The Initial Otto Stockholders shall use reasonable efforts to ensure that any Otto Designee satisfies all stated criteria and guidelines for director nominees of the Company.

(b)          Each Otto Designee shall be required, as a condition to such individual’s nomination, appointment and service as a Director, to make such acknowledgements, enter into such agreements and provide such information as the Board requires of all Directors at such time, including without limitation, completing such questionnaires as the Company requires of all Directors or nominees and agreeing to be bound by the Company’s Code of Business Conduct and Ethics, Statement of Company Policy on Insider Trading and Disclosure, and Special Trading Procedures for Insiders. Each Otto Designee (other than the Company’s Chief Executive Officer) shall also be required, as a condition to such individual’s nomination, appointment and service as a Director, to submit an irrevocable conditional resignation to be effective upon the occurrence of a reduction in the Initial Otto Stockholder’s director nomination rights pursuant to Section 2.1(a) and the Board’s formal acceptance of such resignation following such reduction. The Company also agrees that it will provide indemnification, advancement of expenses, directors’ and officers’ liability insurance and compensation for service as a director to the Otto Designees who are Directors on the same basis, and in the same manner, as it does for all other non-employee Directors.

Section 2.3           Vacancies.

In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal of any Otto Designee, the Initial Otto Stockholders shall collectively have the right, but not the obligation, to cause the vacancy created thereby to be filled by a new designee of the Initial Otto Stockholders, and, in such a case, the Company hereby agrees to take all reasonable actions necessary to accomplish the same.

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ARTICLE III- GENERAL PROVISIONS

Section 3.1           Termination.

This Agreement shall automatically terminate at such time as the Initial Otto Stockholders no longer have the right to nominate a Director to the Board pursuant to Section 2.1(a). Upon such termination, no party shall have any further obligations or liabilities hereunder; provided that such termination shall not relieve any party from liability for any breach of this Agreement prior to such termination.

Section 3.2           Notices.

(a)          Any notice, demand, request or report required or permitted to be given or made hereunder shall be in writing and shall be deemed given or made when delivered in person or when sent by nationally recognized overnight delivery service or facsimile transmission (with facsimile receipt confirmed), to the following addresses (or any other address that any such party may designate by written notice to the other parties):

(i) if to the Initial Otto Stockholders:

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG

Werner-Otto-Straße 1-7

D-22179 Hamburg, Germany

Attention: Thomas Armbrust

Fax: +49-40-6461-2960

(ii) if to the Company:

Paramount Group, Inc.

1633 Broadway, Suite 1801

New York, New York 10019

Attention: Albert Behler

Fax: +1-212-974-6435

(b)          Any such notice shall, if delivered personally, be deemed received upon delivery; shall, if delivered by nationally recognized overnight delivery service, be deemed received the first business day after being sent; and shall, if delivered by facsimile, be deemed received upon confirmation.

(c)          Whenever any notice is required to be given by law or this Agreement, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

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Section 3.3           Amendment; Waiver.

This Agreement may be amended, supplemented or otherwise modified only by a written instrument executed by each of the parties hereto. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and executed by the party so waiving. The waiver by any party hereto of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent breach.

Section 3.4           Successors and Assigns.

Except as specifically provided herein, this Agreement may not be assigned by the Company without the express prior written consent of each of the Initial Otto Stockholders, and any attempted assignment, without such consent, shall be null and void. Except as specifically provided herein, this Agreement may not be assigned by any of the Otto Stockholders without the express prior written consent of a majority of the Board not affiliated with the Otto Stockholders, and any attempted assignment, without such consent, shall be null and void; provided, however, that any Otto Stockholder (whether in such person’s or entity’s capacity as an Otto Stockholder or an Initial Otto Stockholder) or its authorized representative (e.g., executor or trustee) may assign or transfer this Agreement or any of its rights or benefits hereunder (in whole or in part) to any other Otto Stockholder without such prior written consent.

Section 3.5           Third Parties.

This Agreement does not create any rights, claims or benefits inuring to any person or entity that is not a party hereto nor create or establish any third party beneficiary hereto.

Section 3.6           Governing Law.

This Agreement shall be governed by and construed in accordance with, the laws of the State of Maryland, without regard to the choice of law or conflict of law provisions thereof.

Section 3.7           Waiver of Trial by Jury.

EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Section 3.8           Specific Performance.

Each party hereto acknowledges and agrees that in the event of any breach of this Agreement by any of them, the Company (in the case of a breach by any of the Initial Otto Stockholders) or the Initial Otto Stockholders (in the case of a breach by the Company) would be irreparably harmed and could not be made whole by monetary damages. Each party accordingly agrees to waive the defense in any action for specific performance that a remedy at law would be adequate and that the Company and the Initial Otto Stockholders, as the case may be, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to specific performance of this Agreement without the posting of bond.

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Section 3.9           Entire Agreement.

This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof. There are no agreements, representations, warranties, covenants or understandings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement supersedes all other prior agreements and understandings between the parties with respect to such subject matter.

Section 3.10         Severability.

If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

Section 3.11         Table of Contents, Headings and Captions.

The table of contents, headings, subheadings and captions contained in this Agreement are included for convenience of reference only, and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.

Section 3.12         Counterparts.

This Agreement and any amendment hereto may be signed in any number of separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one agreement (or amendment, as applicable).

Section 3.13         Otto Stockholder Representative.

(a)          The Initial Otto Stockholders hereby designate the Otto Stockholder Representative to act as a representative for the benefit of the Initial Otto Stockholders, as the exclusive agent and attorney-in-fact to act on behalf of each Initial Otto Stockholder, in connection with and to facilitate the matters contemplated hereby, which shall include the power and authority:

(i)          to execute and deliver any notices, documents or instruments (x) required to be delivered hereunder by the Otto Stockholder Representative (on behalf of the Initial Otto Stockholders) or (y) to designate individuals to the Board on behalf of the Initial Otto Stockholders;

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(ii)         to enforce and protect the rights and interests of the Initial Otto Stockholders arising out of or under or in any manner relating to this Agreement and each other document or instrument referred to herein, and to take any and all actions which the Otto Stockholder Representative believes are necessary or appropriate under this Agreement for and on behalf of the Initial Otto Stockholders, including asserting or pursuing or defending any claim, action, proceeding or investigation by or against any Initial Stockholder Representative; and

(iii)        to make, execute, acknowledge and deliver all such other agreements, documents, instruments or other writings, and, in general, to do any and all things and to take any and all actions that are necessary or proper or convenient in connection with or to carry out the matters contemplated by this Agreement.

(b)          The Company shall have the right to rely upon all actions taken or omitted to be taken by the Otto Stockholder Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon the Initial Otto Stockholders.

(c)          The Majority-in-Interest shall have the right, at any time, to remove and replace the Otto Stockholder Representative by written notice to the Company executed by the Majority-in-Interest and delivered to the Company pursuant to Section 3.2.

(d)          The grant of authority provided for herein is coupled with an interest and shall survive the death, incompetency, bankruptcy or liquidation of any Initial Otto Stockholder.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders Agreement to be duly executed as of the date first above written.

PARAMOUNT GROUP, INC., a Maryland corporation
By:	/s/ Albert Behler
	Name: Albert Behler
	Title: President and CEO

[Signatures continue on following page]

INITIAL OTTO STOCKHOLDERS:

/s/ Maren Otto

Maren Otto

INITIAL OTTO STOCKHOLDERS:

/s/ Alexander Otto

Alexander Otto

INITIAL OTTO STOCKHOLDERS:

/s/ Katharina Otto-Bernstein

Katharina Otto-Bernstein

Schedule I

Initial Otto Stockholders

Maren Otto

Alexander Otto

Katharina Otto-Bernstein

Address for Initial Otto Stockholders:

c/o CURA Vermögensverwaltung, G.m.b.H. & Co. KG

Werner-Otto-Straße 1-7

D-22179 Hamburg, Germany

Attention: Thomas Armbrust

Fax: +49-40-6461-2960

EX-99.14

EXHIBIT 14

AGREEMENT

Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, the undersigned hereby agree that only one statement containing the information required by Schedule 13D need be filed with respect to the ownership by each of the undersigned of shares of common stock, par value $0.01, of Paramount Group, Inc.

EXECUTED this 4th day of December, 2014.

Dated: December 4, 2014	ALEXANDER OTTO
	By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Alexander Otto
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
Dated: December 4, 2014	AROSA Vermoegensverwaltungsgesellschaft m.b.H.
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
	By:	/s/ Thomas Finne
		Thomas Finne
		Managing Director
Dated: December 4, 2014	KATHARINA OTTO-BERNSTEIN
	By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Katharina Otto-Bernstein
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director
Dated: December 4, 2014	MAREN OTTO
	By: KG CURA Vermögensverwaltung, G.m.b.H. & Co., by power of attorney for Maren Otto
	By:	/s/ Thomas Armbrust
		Thomas Armbrust
		Managing Director