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In her bedroom Marguerite reflects on her feelings towards Armand. Otto enters and tries to confess his love for her, but she just talks about Georges's petrol coupons. Otto becomes enraged and accuses her of being a whore and tells her that even if she doesn't love him, she is his. He threatens her but is upset when he sees himself and what he is doing. As the band members walk home, they reflect on the changing state of Paris, while Armand sings of his new passion for Marguerite. At the bandstand a Nazi band is playing and the public join in. Armand waits for Marguerite but when she turns up she decides she cannot stay and tries to leave unnoticed. Armand sees her, but she says that this relationship can never happen and goes. Lucien and Annette are at home listening to coded radio messages, when they hear that the French government is going to force Jews to wear an identifying mark. This worries Lucien as he is Jewish. Annette says she will speak to her resistance contact about getting out of Paris. Nobody knows where Armand has been for two days since the party. Pierrot turns up with various things that he has pinched from the party but this only worries Lucien more since it is food stolen from a Nazi. Armand turns up, he has been out wandering the streets and thinking of Marguerite, but claims not to care about her. However, Pierrot teases him and he gets angry and leaves. Pierrot gathers up his stolen goods and leaves too. He is stopped by police on his way home who search his bag and drag him away to be sent to a concentration camp. Pierrot is dragged out of a crowd of gathered Jews to be tortured. He manages to buy his way out of trouble by giving the Nazis the name and address of a Jew – Lucien. However when they knock on his door, both Pierrot and Lucien manage to escape. Annette has come to see Armand. She has train tickets and wants him to come along. Suddenly Lucien bursts in and explains the situation - he must leave Paris at once. Annette calms him telling him about the train tickets. Armand has still heard nothing from Marguerite since the bandstand, and he agrees to meet them at the train station that night. However, while he is packing his bag, Marguerite comes to his flat and they make love. Annette and Lucien are at the railway station waiting for Armand. Annette explains she has to do something, but Lucien must go and she will join him later. Both couples sing their respective songs together as the curtain falls. Act II Marguerite and Otto meet in a park, whilst the crowd sing of change. Otto decides to have Marguerite followed. Annette meets Pierrot who tells her where to meet her resistance contact. She is angry about what he did to Lucien, but he tells her to worry about the current situation. Marguerite goes to see Armand. She tells him that she must go early because Otto has invited dinner guests. He becomes enraged and throws her love letters all over his flat as she leaves. Annette meets her resistance contact. He gives her a briefcase full of documents and tells her to get them out of Paris. He says her brother, Armand, is a danger to her and himself since he is sleeping with a Nazi officer’s wife, and that she must on no account visit him. This only worries Annette. She decides she must see her brother, but arrives at the flat at the same time as Hermann. Armand has gone, but left the letters all over the floor, and when the Nazis look in Annette’s bag they find maps and other incriminating material so take her with them. Otto is sitting in a darkened room with the love letters. Marguerite arrives home, and he confronts her with the letters. He tells her to break it off, and when she refuses Hermann brings in Annette, covered in cuts and bruises and Otto shows her an arrest warrant for Armand. She breaks down, and eventually, he promises to let Annette and Armand go if she writes a letter to Armand saying that she will never see him again, which she does, whilst hoping that he will understand she is not writing her own words. Once she has done it, he says he cannot let Annette go, as she is too dangerous, but he promises not to torture her any more. He tears up Armand's arrest warrant saying he is a man of his word. Armand reads the letter and is distraught . Pierrot finds Armand and shows him that Lucien has returned since he has heard about Annette. Lucien is angry with Armand as he sees the affair with Marguerite as the cause of the Annette situation.

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