<PAGE>

                                                                   EXHIBIT 10.33

                                                             File ref: 1.108.D.S
                                                                      Data file:






                                BUSINESS PREMISES
                           L E A S E  A G R E E M E N T






       The following Lease is concluded between

       Despa Deutsche Sparkassen-Immobilien-Anlage-Gesellschaft mbH,
       Mainzer Landstrasse 37, 60329 Frankfurt am Main

                                                                 - as Landlord -

       and

       eToys Germany GmbH
       Weltenburger Strasse 70, 81677 Munich

                                                                   - as Tenant -




       DECLARATION CONCERNING THE PERSON OF THE TENANT:

       The Tenant is registered in the Trade Register of the Munich Amtsgericht
       (District Court) under reference HR B 126015.

       The Tenant is a business for the purposes of Section 2 Turnover Tax Act.


<PAGE>

                              SECTION 1 RENTED PREMISES


1.1    The following space is leased in the commercial and office building
       Bayerstrasse 21 in Munich:

       1.1.1.   On the 6th + 7th storeys, 691.59 m(2) for office use including
                proportional use of communal areas and service areas on each
                floor. The size of the rented premises is deemed to have been
                agreed at 691.59 m(2).
       1.1.2.   On the 5th storey, 230.85 m(2) for office including proportional
                use of communal areas and service areas on each floor. The size
                of the rented premises is deemed to have been agreed at 230.85
                m(2).
       1.1.3.  On the 2nd basement storey - m(2) storage space.
       1.1.4.  On the 2nd basement storey, 3 car parking spaces numbered ......

       The areas to be demised to the Tenant for exclusive use are outlined in
       colour on the floor plan attached as an appendix.

       If any subsequent measurement shows the total floor areas to differ by no
       more than +/- 5% from the agreed overall floor area, then the rent here
       determined shall continue to apply. Otherwise the rent shall be increased
       or reduced in accordance with the floor areas determined by the new
       measurement in accordance with the rates agreed per square metre. Neither
       party shall be entitled to any further claims or rights relating to a
       change in the floor area.

       For the purposes of calculation of ancillary costs the area for
       apportionment is agreed at 922.44 m(2).

1.2    The use of any additional garages or car parking areas available within
       the property will form the subject of separately agreed leases.

       The right to rearrange the car parking arrangements is reserved. The use
       thereof is governed by the attached garage and parking space plan which
       forms a part of this contract.


This lease contract includes as essential components:

       a)         Floor plans of 2nd bsmt storey, 5th, 6th & 7th storeys.
       b)         Specimen bank guarantee
       c)         Specimen Letter of Awareness
       d)         Building specification


              SECTION 2 USE OF RENTED PREMISES (SEE ALSO SECTIONS 10, 11)

                                 Use as offices

                                     Page 2
<PAGE>

                                 SECTION 3 TERM


3.1    The lease is initially concluded for a fixed term of 5 years. It will
       commence on 01.07.2000 and will expire on 30.06.2005, provided notice to
       terminate has been given at the correct time.

       The tenancy in respect of the rented premises on the 5th storey in
       accordance with Section 1.1.2 will commence on 01 Dec. 2000.

       Some residual renovation and where appropriate alteration works are still
       to be carried out in the rented premises by the Landlord; the Tenant is
       aware of these. Should these works still not be complete by 01.07.2000,
       then Landlord and Tenant agree that due to their nature and scope these
       works shall not have a substantial effect on the agreed use by the
       Tenant. The Tenant undertakes in any case to pay the full rent from
       01.07.2000, and renounces any claims against the Landlord arising from
       execution of these works following transfer of possession. Should these
       measures, contrary to this assumption, be found to have a demonstrable
       substantial effect on the use of the premises by the Tenant, or should
       these measures not be completed within a reasonable time, the right of
       the Tenant to claim a reduction in rent shall not to this extent be
       affected.

3.2    The Tenant is entitled to a one-off option to extend the tenancy for a
       further 5 years. The intention to exercise this option must be notified
       at the latest fourteen months before the end of the tenancy, i.e. by 30th
       April 2004, in writing by registered letter.

       If the option is not exercised, or if the tenancy expires after the
       option has been exercised, it will continue to be extended by a further
       year, provided it is not terminated by either of the parties to the
       contract giving in writing the correct notice of twelve months.

3.3    If the Tenant continues to use the rented premises after the end of the
       contract, this shall not give rise to a tacit extension (Section 568 of
       the Civil Code shall not apply).



                    SECTION 4 RIGHT TO EXTRAORDINARY TERMINATION


4.1    The Landlord may terminate the tenancy with immediate effect, without the
       need to give notice, for an essential reason, in particular if:

       a)     the Tenant is in arrears with any payment obligations to the
              equivalent of an amount in excess of two monthly rent payments
              including the ancillary costs prepayment and VAT where applicable;
       b)     the Tenant is in arrears with the provision of the security
              deposit after a single warning, for a period in excess of one
              month;
       c)     the Tenant becomes insolvent or initiates extrajudicial
              composition proceedings or
       d)     if insolvency proceedings are not initiated due to insufficiency
              of assets.

                                     Page 3
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       The Landlord shall have the same entitlement if the Tenant initiates
       extrajudicial composition proceedings, i.e. if the Tenant approaches the
       Landlord and other creditors with a request for complete or partial
       waiver of demands and makes it known that otherwise the full compliance
       with payment and any other performance obligations would be under threat.

4.2    If the tenancy is ended through termination without notice by the
       Landlord, the Tenant shall be liable until expiry of the agreed term or
       until the earliest point, following the Landlord's termination without
       notice, at which the Tenant would have been able to terminate the tenancy
       by giving proper notice, for any loss of rent and ancillary costs arising
       from the fact that the property is not fully let, or if another tenant
       can only be found at a rent which is lower than that previously obtained.
       The Landlord remains bound by the legal requirement to minimize any
       losses. The Landlord is entitled to claim for losses relating to use or
       for loss of rent, at least equal to the amount of the rent to be paid in
       accordance with the lease, plus the prepayment in respect of ancillary
       costs, or once the ancillary costs statement is drawn up, plus the
       ancillary costs actually shown. This shall not affect the right to claim
       for additional damages.



                  SECTION 5 RENT, ANCILLARY COSTS, SECURITY DEPOSIT


5.1.1 The monthly rent payable from 01.07.2000, excluding ancillary costs is:
<TABLE>

<S>                             <C>                <C>                  <C>           <C>                       <C>
       Offices                  [EURO]10,608.--          (DM    20,747.70)    plus VAT      = DM 30.-- / m(2)         plus VAT
       Stores                   [EURO]........           (DM  ...........)    plus VAT      = DM ..... / m(2)         plus VAT
       Bsmt gar. pkg space      [EURO]230.--             (DM       450.00)    plus VAT      = DM 150.-- /space        plus VAT

       Total:                   [EURO]10,838.--          (DM    21,197.70)    plus VAT
</TABLE>

       (in words: ten thousand eight hundred and thirty-eight Euros,
       thirty-eight [sic.])
       (in words: twenty-one thousand one hundred and ninety-seven German
       Marks, seventy)

       plus VAT at the legal rate in force,
       currently 16%, [EURO]1,734,11 (DM 3,391.63)
       (in words: one thousand seven hundred and thirty-four Euros, eleven)
       (in words: three thousand three hundred and ninety-one German Marks,
       sixty-three)


       The monthly prepayment in respect of ancillary costs is currently
       [EURO]2,298.43 (DM 4,495.33)
       (in words: two thousand two hundred and ninety-eight Euros, forty-three)
       (in words: four thousand four hundred and ninety-five German Marks,
       thirty-three)

       plus VAT at the legal rate in force,
       currently 16%, [EURO]367.75 (DM 719.25)
       (in words: three hundred and sixty-seven Euros, seventy-five)
       (in words: seven hundred and nineteen German Marks, twenty-five)



5.1.2  The monthly rent from 01.12.2000 excluding ancillary costs is:

                                     Page 4
<PAGE>

<TABLE>

<S>                            <C>                <C>                  <C>           <C>
       Offices                 [EURO]14,622.--          (DM    28,598.15)    plus VAT      = DM 31.00 / m(2)         plus VAT
       Stores                  [EURO]........           (DM    ...........)  plus VAT      = DM ........ / m(2)      plus VAT
       Bsmt  gar.  pkg space   [EURO]230.--             (DM       450.--)    plus VAT      = DM 150.-- /space        plus VAT

       Total:                  [EURO]14,852.--          (DM    29,048.15)    plus VAT
</TABLE>

       (in words: fourteen thousand eight hundred and fifty-two Euros)
       (in words: twenty-nine thousand and forty-eight German Marks, fifteen)

       plus VAT at the legal rate in force,
       currently 16%, [EURO]2,376.33 (DM 4,647.70)
       (in words: two thousand, three hundred and seventy-six Euros,
       thirty-three)
       (in words: four thousand six hundred and forty-seven German Marks,
       seventy)


       The monthly prepayment in respect of ancillary costs from 01.12.2000 is
       currently [EURO]3,066.-- (DM 5996.57)
       (in words: three thousand and sixty-six Euros)
       (in words: five thousand nine hundred and ninety-six German Marks,
       fifty-seven)

       plus VAT at the legal rate in force,
       currently 16%, [EURO]490.56 (DM 959.45)
       (in words: four hundred and ninety Euros, fifty-six)
       (in words: nine hundred and fifty-nine German Marks, forty-five)


       The Landlord is entitled to adjust the prepayment to correspond to the
       amount necessary to cover the anticipated tenant's ancillary costs.


5.2    The Landlord is entitled to assign the  following  costs (in  accordance
       with Appendix 3 of Section 27 II. of the version in force at the time of
       the Computation Act) as they occur:

       a)    Water supply, drainage, disposal of rainwater
       b)    Communal heating, hot water, ventilation, air conditioning;
             including maintenance, purchase or leasing of metering equipment
             and the reading thereof (see also Section 9.2), maintenance of
             heating/water heating for each storey
       c)    Caretaker / maintenance engineer for the building
       d)    Communal electricity consumption for the building, lighting,
             replacement light bulbs and fittings
       e)    Personnel and goods lifts (cost of operation, maintenance and
             inspection, lift operative, emergency system)
       f)    Cleaning and maintenance of areas in communal use, pest control,
             bird control
       g)    Cleaning of roads and footpaths, snow and ice clearance and
             gritting
       h)    Refuse disposal
       i)    Chimney cleaning
       j)    Property insurance incl. Extended Coverage and liability insurance
       k)    Land tax, any other public rates, charges and taxes
       l)    Maintenance of grounds and gardens, roof planting, interior
             planting

                                     Page 5
<PAGE>

       m)    Window cleaning incl. frames, cleaning of the facades and sun
             protection installations
       n)    Operation, control, maintenance and inspection, servicing and
             repair of all further  technical operation plant and machinery,
             e.g. sprinkler system, fire-fighting and protection equipment,
             flues, waste disposal systems, external access roads, facade lift
             cradles, lightning conductors, alarm systems, emergency power
             supply systems etc.
       o)    Communal aerials, broad-band cable connections
       p)    Porters, security and guarding of the building
       q)    Control and operation of the underground garage and maintenance,
             servicing, repair and inspection of any existing plant and
             machinery, e.g. CO warning system, sprinkler system, barriers and
             gates, lighting, ventilation etc.
       r)    Other operating costs
       s)    Cost of intermediate readings of meters on moving out / change of
             tenant
       t)    - left open -
       u)    Specific to the property:
       v)    Administrative costs:
             The Landlord is entitled to transfer to the Tenant administrative
             costs amounting to 2% of the net rent.

         It is the Landlord's intention to take out a Facility Management
         Contract for the cost-optimized running of the property, in respect of
         the technical maintenance including the building services. The Tenant
         shall contribute towards the costs of the Facility Management in
         proportion to the space occupied, including management services,
         insofar as these replace the cost items liable for transfer to the
         Tenant in accordance with this lease.

5.2.1  A statement shall be issued in respect of the foregoing ancillary costs
       by the end of the year following the statement period (e.g. 1st October
       to 30th September). If issue of the statement is delayed beyond this
       period, the Landlord must inform the Tenant thereof. Any increases with
       retrospective effect which become known to the Landlord after the
       statement date (e.g. a change to the unit value for Land Tax) or any new
       ancillary costs introduced must be paid by the Tenant to the Landlord in
       due proportion following a separate demand by the Landlord. Any
       retrospective cost reductions will either be repaid to the Tenant by the
       Landlord in due proportion or accounted for in the subsequent ancillary
       cost statement. Any refunds or payments due as a result of the statement
       are due for settlement within 14 days of the Tenant receiving the
       statement.

       Provided there are no compulsory legal stipulations to specify a specific
       method of calculation, the Landlord will fix an appropriate, fair,
       reasonable apportionment scale (in general apportioned according to
       rented floor area). During the term of the tenancy the Landlord may, at
       the beginning of a statement period, amend the apportionment scale to a
       reasonable extent. The Landlord shall inform the Tenant of any such
       alteration with the relevant ancillary costs statement. If the
       consumption of any service covered by the ancillary costs is determined
       by the meters operated by an outside company's customer service
       department, then the apportionment will be made in accordance with the
       standard consumption determination and billing procedures of the company
       instructed. More than one building spatially adjacent may be accounted
       for as a single unit.

                                     Page 6
<PAGE>

5.2.2  Insofar as increases in ancillary costs are caused by the activities of
       the Tenant, or through structural alterations instigated by the Tenant,
       e.g. insurance premiums, the increase may be transferred to the Tenant in
       full.

       If such increase or new introduction of ancillary costs also places an
       additional burden on the Landlord, the Tenant is obliged to pay the
       proportional increase from the moment it arises.


5.3    The Tenant shall pay any supply costs relating directly to the rented
       premises, in particular:

       a) Electricity consumption within the rented premises
       b) Telephone, telecommunications etc.

       The responsible utility and supply companies must be notified by the
       Tenant in good time prior to commencement of the tenancy, and proof
       thereof shown to the Landlord.

5.4    The Tenant shall provide the Landlord in good time before commencement of
       the tenancy (see Section 12.3) with a deposit as security for compliance
       with the duties and obligations arising from the lease, in the sum of 3
       months` gross rent (net rent plus prepayment in respect of ancillary
       costs and VAT where applicable) thus

       [EURO]62,354.91 (DM 121,955.61)
       (in words: sixty-two thousand three hundred and fifty-four Euros,
       ninety-one, one hundred and twenty-one thousand nine hundred and
       fifty-five German Marks, sixty-one)

       The Landlord shall pay interest on the deposit at a rate of 1/4% above
       the current 3-month notice savings account rate of the Frankfurter
       Sparkasse. The interest shall increase the security.

       The Tenant is entitled to substitute for the deposit a non-time-limited
       rent guarantee from a German banking institution in respect of the same
       amount, in accordance with the sample attached as an Appendix.

       Furthermore a Letter of Awareness in accordance with Appendix c) to this
       lease shall be provided by eToys co.uk, 2 Queen Caroline Street, London.

       The Landlord is entitled to demand an adjustment of the deposit or the
       guarantee in accordance with any changes in rent, by the percentage by
       which the rent including the prepayment in respect of ancillary costs has
       changed.


                               SECTION 6 RENT REVIEWS


6.1    At the end of one year following the signing of the lease, and thereafter
       at yearly intervals the rent shall be increased or reduced by the same
       percentage by which the cost of living index determined by the Federal
       Statistics Office for all private households in the whole of Germany
       (1995 = 100) has changed from its position either at the signing of the
       lease or at the time of the last rent review. The rent review shall be

                                     Page 7
<PAGE>

       applied from the 1st of July of each calendar year, by notification in
       writing specifying the percentage alteration to the index on which the
       review is based for the previous month of April, compared with the
       previous year's value for the same month. The review may also be applied
       retrospectively to the relevant review date.

6.2    This indexation clause is based on the Indexation Clauses Order (Federal
       Law Gazette 1998 p. 3043). The parties to the contract proceed on the
       assumption that the prerequisite of Section 4 S. 1 of the Indexation
       Clauses Order have been satisfied and that the indexation clause is
       therefore deemed to have been approved. Should this not be the case, the
       approval of the Federal Office for Trade and Industry will be obtained by
       the Landlord.

6.3    Should the necessary approval not be given, this shall not affect the
       validity of any of the other agreements made by the parties. In this case
       the parties shall alter the indexation clause in such a way that it is
       capable of obtaining approval.



                    SECTION 7 PAYMENT OF RENT AND ANCILLARY COSTS


       The rent including the prepayment in respect of ancillary costs and VAT
       where applicable shall be paid monthly in advance, by the latest on the
       3rd working day, credited to the Landlord or the person or office duly
       authorized by the Landlord, to be notified. The Tenant undertakes, if the
       Landlord so requests, to take out a direct debit mandate in favour of the
       Landlord in respect of the rent. In the case of all payments the file
       reference provided by the Landlord must be quoted as purpose of the
       payment.

       In the case of late payment the Landlord is entitled to charge for the
       cost of any warnings and interest on the arrears. Payment is deemed to
       have been made on the date it is actually received or credited. Interest
       shall be charged on rent arrears from the date they became due at a rate
       of 4% above the base rate in force in accordance with the Base Rate
       Transitional Act, at a minimum of 8% p.a. The Tenant remains entitled to
       prove that the Landlord has incurred a lower loss. The Landlord is not
       excluded from claiming a higher loss. If the base rate is replaced by a
       new reference rate, this shall take the place of the aforementioned base
       rate. The parties to the contract are obliged to redraft the interest on
       arrears clause as it appears above as soon as such change takes legal
       effect.

       If the Tenant is in arrears with the payment of rent or ancillary costs,
       then any payments made, regardless of any payment allocation to the
       contrary by the Tenant, shall be assigned firstly to any claims which
       threaten to become statute-barred, then to the costs, then to the
       interest and finally to the main demand.



                     SECTION 8 SET-OFF, RETENTION, COMPENSATION


8.1    The Tenant may only offset a rent demand incl. ancillary costs against
       uncontested or legally determined claims, or claim the right to retention
       in respect of such claims, provided this is notified to the Landlord in
       writing, specifying the sum and the reason, in good time before the rent
       or ancillary cost demand falls due. In addition the Tenant may


                                     Page 8
<PAGE>

       give notice of set-off in respect of rent reduction claims in accordance
       with Section 537 Civil Code arising out of this tenancy, provided they
       relate to a period within the last three full calendar months prior to
       the set-off date, provided the Tenant immediately, but at the latest one
       week after the Landlord's demand for rent/ancillary costs intended for
       set-off becomes due, gives notification of the set-off in writing and at
       the same time states the extent of the rent reduction claims and the
       fault which provides the basis of the claim. This shall not affect
       Section 545 S. 2 Civil Code.

8.2    The Tenant is obliged to take out adequate business liability and
       business contents insurance.

8.3    Claims for compensation in accordance with Section 538 Civil code are
       excluded, unless the Landlord, the Landlord's senior employees or
       employee(s) responsible for the administration and maintenance of the
       property have acted with deliberate intent or gross negligence, or have
       failed to carry out a contractually essential obligation (cardinal
       obligation). This limit to liability shall not apply to the extent that
       the Landlord is in arrears with the rectification of defects in
       accordance with Section 537 Civil Code, nor to the extent of Tenant's
       damages covered within the scope of insurance taken out by the Landlord.



           SECTION 9 HEATING AND WHERE IN PLACE: VENTILATION, (PARTIAL)
                                  AIR CONDITIONING


9.1    Rooms intended for personal occupation will, in accordance with
       requirements, be heated, to an average temperature of at least 20DEG.
       Celsius. For other rooms a reasonable background temperature in
       accordance with the plant and machinery shall suffice. Ventilation or
       cooling can only be demanded within the scope of the type and capacity of
       any cooling equipment in place. Maintenance of specified maximum
       temperatures is not guaranteed, unless the parties to the contract have
       agreed to the contrary in writing in this lease. The Tenant shall not be
       entitled to make a claim in respect of weather-related warming of the
       building, within the scope of the usual expectations for this kind of
       building.

       By agreement with the tenants of the property, the heating level may be
       reduced at nights and weekends. The Tenant agrees to such a reduction in
       heating. If the Tenant demands a higher or longer-lasting level of
       heating/ventilation/air conditioning, then, taking account of the
       interests of the other tenants, the Tenant shall be obliged to accept any
       resultant additional costs, or to accept the necessary cost of satisfying
       the technical requirements of providing a separate
       heating/ventilation/air conditioning system. Heating/ventilation/air
       conditioning cannot be insisted upon in the case of interruption which is
       not the fault of the Landlord, force majeure, official requirements of
       the authorities or any other case in which supply becomes impossible
       (e.g. a general fuel shortage). In these exceptional cases the Landlord
       is not obliged to provide a replacement heating/air conditioning system
       and the Tenant is not entitled to make claims for damages, unless the
       Landlord has acted with malicious intent or gross negligence. The
       Landlord must take every care to ensure the immediate rectification of
       any defects, insofar as this lies within the capability of the Landlord.

9.2    Heating/ventilation/air conditioning costs include, in addition to
       operating costs, the costs of supply, rental, replacement, reading and
       calibration of the metering equipment and the replacement of the
       thermostat valves. If the Tenant does not make use of the

                                     Page 9
<PAGE>

       heating/ventilation/air conditioning system, this shall not imply any
       release from the obligation to contribute towards the costs.

9.3    The inlet and outlet openings for the ventilation/air conditioning must
       be kept clean. The Tenant must allow access to radiators, induction
       appliances etc. for the execution of maintenance and repair works or
       meter readings, and keep them free of any clothing, furniture etc.



                  SECTION 10 USE OF THE RENTED PREMISES, SUBLETTING


10.1   The Tenant may only use the rented premises for the purposes specified in
       Section 2. If the Tenant wishes to use them for other purposes, this
       requires the prior written consent of the Landlord. The Tenant is solely
       responsible for obtaining and bearing the cost of all official consents
       necessary for any use, including fulfilment of any conditions contained
       therein, and to provide proof of obtaining these consents before
       commencement of use.

       The Landlord makes no guarantee of the suitability of the rented premises
       for the Tenant's intended use, unless this is specifically guaranteed in
       this lease. Claims of any type are therefore precluded. The Landlord does
       however accept responsibility for ensuring that the building complies
       with all general building regulations in force at the time of its
       construction which apply to buildings of its kind (e.g. office buildings,
       commercial buildings), insofar as these requirements are not affected by
       the actual use by the Tenant. The Tenant must itself obtain the necessary
       consents for its business operations and activities at its own expense,
       and ensure that the rented premises are maintained in a condition which
       complies with all official requirements, and comply with all related
       official conditions. The refusal or limitation of consents and similar
       shall not affect the existence or content of this lease. The Landlord
       shall only be obliged to undertake additional structural alterations,
       installations or fitting out, if such an undertaking has been expressly
       made in writing, or if the Landlord as owner of the property, regardless
       of the actual use of the rented premises by the Tenant, is obliged to
       undertake such structural alterations/installations/fitting out as a
       result of legal or official regulations, and there is no protection of
       vested rights.

10.2   In using the rented premises the Tenant must observe the recommendations
       of the Verband der Sachversicherer [Property Insurers' Association] and
       comply with any directives and conditions issued by this Association at
       the Tenant's own expense.

10.3   The drains and refuse containers may only be used as determined by the
       relevant prescriptions and regulations for use. Special waste and any
       other dangerous substances must be properly disposed of by the Tenant in
       accordance with the relevant legal regulations. The Tenant is responsible
       for compliance with all necessary safety procedures when handling
       substances which may be harmful to the environment on the property.

10.4   The Tenant is entitled to sublet the rented premises or parts thereof to
       a third party with the Landlord's consent. The draft of the sublease to
       be agreed and any documents providing information on the intended
       subtenant must be submitted to the Landlord along with the request for
       consent.

                                    Page 10
<PAGE>

       The Landlord may only refuse consent on grounds which lie in the person
       of the subtenant or in the use to which the latter intends to put the
       rented premises, which may be expected to have a substantial effect on
       the property or the other tenants, or if the intended business activities
       can clearly be shown to have little realistic prospect of success. Such
       essential reasons include in particular if the Landlord would incur
       obligations in respect of third parties arising from toleration of the
       intended use of the premises by the subtenant. The Tenant must be
       informed of the reasons for refusing consent to sublet if the Tenant
       asks. Consent only applies to the individual case, and may be revoked for
       essential reasons. Subletting is only permissible within the scope of the
       agreed use of the rented premises in accordance with Section 2. Further
       subletting by the subtenant is not permitted. The Tenant hereby transfers
       to the Landlord, who accepts, all claims to which it may be entitled in
       future as a result of the subtenancy from the relevant subtenant, by way
       of security for the Tenant's obligations arising from this lease.
       However, the Tenant remains entitled to collect payments.

10.5   In the case of partnerships, a change of tenant includes the replacement
       or departure of a personally liable partner in the tenant company or
       another partner significant to the financial standing of the tenant
       company. I.e. the departing partner shall remain, until the Landlord's
       consent has been obtained - regardless of the liability in accordance
       with the provisions of the commercial laws responsible to the Landlord
       for the fulfilment of all present and future rent obligations to the same
       extent as he would have been had he remained in unchanged circumstances
       with the company. The Landlord may not withhold consent provided the
       Tenant can prove that the replacement/departure of the partner will not
       lead to any deterioration in the financial standing of the tenant company
       and that there are no essential grounds for refusal in the person of the
       incoming partner. The consent of the Landlord shall not affect the
       liability of the departing partner, e.g. in accordance with Section 160
       Commercial Code.

       Regardless of its legal form, the tenant company must inform the Landlord
       of any alteration to the company or partnership and of all changes to
       circumstances affecting the company's liability in relation to its
       person, e.g. reduction of capital, change of an essential partner.



          SECTION 11 RESTRAINT OF COMPETITION, OPERATOR'S OBLIGATIONS


11.1   It is expressly stated that protection from competition is not
       guaranteed. The Landlord is not subject to any restrictions whatsoever
       when letting the remaining rented premises within the property or any
       other properties.






            SECTION 12 CONDITION OF THE RENTED PREMISES, TRANSFER OF KEYS


12.1   The premises will be handed over in a renovated condition. Any defects
       shall be specified in the schedule of condition to be drawn up on
       transfer of possession of the rented premises. Defects which do not
       substantially affect the intended business


                                    Page 11
<PAGE>

       activities of the Tenant shall not entitle the Tenant to refuse to
       accept possession. The Tenant must tolerate the rectification of the
       defect(s) by the Landlord or third parties, e.g. previous tenants,
       during the usual business hours.

12.2   If the premises are not handed over to the Tenant at the proper time the
       Landlord shall not suffer any consequences from the delay, unless the
       Landlord acted with intent or negligently, or unless transfer of
       possession is delayed by more than two months. The Tenant's right to
       withdraw from this lease in the case of a delay of more than two months
       is not limited. The Landlord hereby transfers to the Tenant, which
       accepts, any claims to which it is entitled against the previous tenant
       in respect of a delay in yielding up the rented premises, or against the
       Landlord's contractors in respect of delay in completing works, equal to
       the level of any claims the Tenant may have as a result.

12.3   The entitlement to transfer of possession of the rented premises shall
       only arise on provision of the rent security deposit. This shall not
       affect the obligation to pay rent.

12.4   On transfer of possession the Tenant shall be given the keys to the
       premises, in a number commensurate with the purpose of the tenancy, as
       specifically agreed. Additional keys or cylinder locks may be obtained by
       the Tenant at the Tenant's own expense. In the case of locking systems,
       any keys additionally required may be obtained through the Landlord at
       the Tenant's expense. The Landlord must be informed immediately of the
       loss of any keys. If the Tenant is unable to exclude fully the risk of
       the unauthorized use of the misplaced keys, then the Tenant must
       reimburse the Landlord for the cost of replacement of the lock or locking
       system.

12.5   The Tenant is entitled to undertake rebuilding, addition and installation
       works and to introduce fixtures and fittings to the rented premises,
       which are necessary for the contractual use, with the consent of the
       Landlord. Consent may only be withheld for an essential reason. The
       Landlord may make consent dependent on the provision of sufficient
       security to cover any necessary restoration costs. The aforementioned
       rebuilding, addition and installation works and the introduction of
       fixtures and fittings shall on their completion become the property of
       the Landlord by way of security. So long as there is a tenancy or
       agreement for use between the parties to the contract, the Tenant alone
       remains responsible for the proper maintenance, servicing and repair,
       replacement and insurance of these components, fixtures and fittings, and
       releases the Landlord from all obligations in this regard. At the end of
       the tenancy, at the latest on yielding up the rented premises, the Tenant
       must, if the Landlord so chooses, restore the structural alterations,
       additions, installations, fixtures and fittings to their original
       condition (see also Section 16).

12.6   The following fixtures and fittings are the property of the Landlord and
       will be handed over to the Tenant for use without additional payment,
       without the Landlord accepting any liability whatsoever; in particular
       the Landlord excludes all liability to maintain these fixtures and
       fittings in a useable condition or to replace them:

       ....


       The Tenant undertakes to take good care of these items. On yielding up
       the rented premises these fixtures and fittings must be returned in good
       condition allowing for reasonable wear and tear, insofar as they have not
       been worn out and removed from the rented premises by the Tenant.

                                    Page 12
<PAGE>

                SECTION 13 MAINTENANCE OF THE RENTED PREMISES


13.1   The Tenant shall carry out the proper decoration works (e.g.
       wallpapering, the painting of walls and ceilings, the painting of
       radiators and pipework, the painting of interior doors, window frames and
       interior surfaces of external doors, the proper care and cleaning of
       floor coverings) at reasonable intervals and more frequently if
       necessary. Natural-varnished timber and partitions, doors and windrows
       with anodized or plastic laminated surfaces may not be painted, papered
       or drilled. If the Tenant wishes to substantially change the appearance
       of the premises by using different colours or materials, this must be
       agreed in advance with the Landlord. The Landlord is entitled to demand
       additional security equal to the cost of restoration of the original
       interior design.

13.2   The Tenant must treat with due care and attention the light fittings,
       electrical wiring and appliances (high/low voltage), telecommunications
       wiring and gas pipework, heating, air conditioning and ventilation
       installations, sanitary installations, locks, blinds, roller shutter
       doors, roller blinds, sun protection devices and similar items.

       The Tenant shall bear the cost of repair for those parts of the rented
       premises and associated fixtures and fittings to which it has direct
       access, in each individual case up to a cost of [EURO]500.-- (DM 977.92),
       the maximum in any calendar year equating to 5% of the net annual rent.
       Any additional repair costs shall be borne by the Landlord. The Tenant is
       not entitled to initiate repair works at the expense of the Landlord
       without obtaining the latter's prior consent, with the exception of
       immediately essential measures to prevent danger or cases of authorized
       substitute performance.

13.3   In the case of excessive wear of the floor coverings (in the case of
       carpets, a life of less than 10 years) the Tenant must contribute to the
       replacement cost of the carpets at a rate of 10% for each year less than
       10 years that the carpet lasts. Any carpet to be laid new must be
       provided with an antistatic finish and be able to withstand castors, and
       must correspond in quality to a price as at the date of signature of the
       lease of [EURO]25.-- (DM 48.90) plus VAT per m(2) (coverage area,
       excluding laying and removal of the old floor covering).

13.4   The Tenant must inform the Landlord or the Landlord's authorized
       representatives immediately of any defects or damage of which it becomes
       aware in or on the building and the rented premises. Any further damage
       resulting from a delay in informing the Landlord shall become the
       liability of the Tenant. The Tenant has made a detailed inspection of the
       rented premises prior to taking possession. Any evident defects in
       existence at the time of transfer of possession shall not entitle the
       Tenant to any claims for reduction in rent, unless the right to do so in
       respect of these was expressly reserved in the schedule of condition
       drawn up at the time of transfer of possession.

13.5   The Tenant shall be liable to the Landlord for all damage caused by the
       Tenant, including in particular if water supply and drainage pipes,
       toilet and heating facilities etc. have been improperly treated, the
       rooms have been insufficiently ventilated, or insufficiently protected
       against frost damage, unless the Tenant can prove that the damage was not
       caused by neglect of the Tenant's duty of care. Any drain blockages will
       be cleared by the Landlord. The cost will be transferred to the Tenant,
       except for those costs which can be proved to have been caused by another
       party and will be charged separately to this party.

                                    Page 13
<PAGE>

13.6   The Tenant is similarly liable for damage caused by its subtenants,
       relatives, workers, employees, suppliers, tradesmen or any other persons
       (e.g. customers, visitors), provided these have not entered the premises
       against the Tenant's will, unless the Tenant can prove that this does not
       represent fault or breach of duty of care on the part of the Tenant.

13.7   For damage within the rented premises and circulation areas transferred
       to the Tenant for exclusive use, the onus of proof is on the Tenant to
       show that this damage was not caused by the Tenant or the groups of
       persons described above; for damage outside these areas the onus of proof
       is on the Landlord to show that the damage was caused by the Tenant or
       one of the above groups of persons attributable to the Tenant's sphere of
       liability.

13.8   The Tenant must make good immediately any damage for which it is liable;
       in any case, at the latest by the time the rented premises are yielded
       up. If the Tenant does not comply with this obligation within a
       reasonable period fixed by the Landlord, even after a written warning,
       then the Landlord may have the works done at the expense of the Tenant.
       If the damage is potentially dangerous, there shall be no need to issue a
       written warning and set a time limit.

13.9   The Tenant is obliged to take out glass insurance at its own expense, or
       to replace any broken glass panels (window panes, glass doors) in the
       rented premises.



                    SECTION 14 DUTY OF CARE TOWARD THIRD PARTIES


The duty of care is the Tenant's within the rented premises and the circulation
areas used exclusively by the Tenant. Any additional dangers to third parties of
which the Tenant becomes aware must be reported to the Landlord immediately.

The Tenant must ensure accessible, unobstructed emergency escape routes of
sufficient width within the rented premises. The emergency exits must be kept
clear. The relevant fire protection regulations must be observed.









          SECTION 15 THE AFFIXATION OF SIGNS AND PUBLICITY MATERIAL AND THE
                              DESIGN OF THE FACADE


15.1   The Landlord shall point out to the Tenant those places in the entrance
       area of the building and in front of the premises, where the Tenant may
       affix its company signs, in the uniform style and size for the building,
       at the Tenant's own expense. If the facade is to be redesigned, the
       Tenant may also be asked to use another point. The Tenant is


                                    Page 14
<PAGE>

       entitled to affix company signs within the rented premises used
       exclusively by the Tenant, regardless of design and size.

15.2   The Tenant must tolerate the affixation and maintenance of publicity
       materials by others on the facade of the buildings. For the purposes of
       affixation and maintenance of these publicity materials the Tenant
       consents to allow access to the rented premises, subject to an
       appointment being duly made, for the necessary works to be carried out.

15.3   Any use of the facades, windows or roof by the Tenant for publicity
       purposes requires separate agreement and remuneration. The necessary
       official consents must be obtained by the Tenant at its own expense. The
       Tenant is responsible for compliance with any official or legal orders or
       conditions.

15.4   The Tenant is liable for any damage caused by these installations. The
       Tenant is obliged to restore the premises to their original condition at
       the end of the tenancy; any damaged facade panels must be replaced.

15.5   If the signs or advertising installations need to be removed for works on
       the building or site, the Tenant is responsible for removal and
       replacement at its own expense.



                     SECTION 16 YIELDING UP THE RENTED PREMISES


16.1   The Tenant undertakes, at the end of the tenancy or on earlier vacation,
       to yield up the rented premises redecorated, free from defects, fully
       vacated and cleaned. Any traces of wear on the fixtures and fittings made
       available to the Tenant for use, e.g. doors and shelves of fitted
       cupboards, must be removed in advance. Wall plug holes must be made good
       and concealed. Any drilled wall or ceiling panel must be replaced. Any
       low-voltage wiring (e.g. telecommunications, EDP) must be removed and the
       cable ducts left clear.

       A schedule of condition drawn up at the time of yielding up of possession
       of the rented premises shall not preclude the Landlord from making any
       further claims, in particular of defects which first become known during
       later functional testing or a closer inspection.

       The carpets must be shampooed on vacation; stains must be removed. Any
       other floor coverings must be thoroughly cleaned. If the floor covering
       is yielded up in such a condition that it is no longer suitable for
       further use, the Landlord can require the Tenant to contribute to the
       cost of obtaining a new one, in proportion to the length of time below 10
       years it has lasted.

16.2   If the Tenant does not fulfil the above obligations by the time of
       yielding up possession and also within a subsequent, one-off, reasonable
       period set by the Landlord with non-performance warnings, the Landlord
       may, without setting a further period, have any necessary works carried
       out at the expense of the Tenant. Until the rented premises are brought
       up to a contractually acceptable condition, the Tenant remains obliged to
       pay the rent and ancillary costs.

16.3   With regard to any rebuilding, addition and installation works carried
       out in the rented premises by the Tenant, these must as the Landlord
       chooses, either be removed and


                                    Page 15
<PAGE>

       the premises restored to their original condition in such a way as not
       to affect the structure of the building, at the Tenant's own expense,
       or at the end of the tenancy to be left in the building without
       compensation. The same applies to any fixtures and fittings forming part
       of the rented premises.

16.4   The Landlord may, in particular in the case of an intended rearrangement
       of the rented premises, but also in other cases, instead of requiring the
       renovation and any restoration to be carried out by the Tenant, ask for a
       reasonable sum of financial compensation. This compensation shall be
       equal to the costs charged by the tradesmen on site for any additional
       works to be carried out as a result.

16.5   Once notice has been given to terminate the tenancy, the Landlord may
       affix letting boards to the rented premises, e.g. in display windows.

16.6   The Landlord does not have an obligation to allow storage of any items
       left behind by the Tenant on yielding up of possession. The Landlord is
       entitled, having issued a single written notification to the Tenant at
       the last known address of the Tenant, to have these items removed from
       the rented premises at the Tenant's expense, and, insofar as these are
       not obviously objects of value, to have them destroyed.

16.7   If the Tenant intends to vacate the rented premises prior to the end of
       the tenancy for an essential reason, the Landlord must be informed of
       this intention, the reasons for it and - insofar as this is known - the
       proposed vacation date. The Landlord is entitled, but not obliged, to
       agree to an early cancellation of the lease at a date to be fixed by the
       Landlord, unless as an exceptional case the Tenant had an obligatory
       right to claim early cancellation of the contract. The Landlord may also
       make consent to an early cancellation of the lease conditional upon the
       Tenant finding a replacement tenant, acceptable in terms of the person
       and intended use of the premises, of impeccable financial standing, who
       is prepared to take over the rented premises on the basis of a new lease
       at the current market conditions, but at the least equivalent to the
       valid conditions applicable to this lease. This shall not affect any
       Tenant's operating cost or decoration obligations, which the Tenant must
       continue in full until any agreed cancellation of the contract. Early
       acceptance of the rented premises by the Landlord shall not lead to an
       automatic cancellation of the contract. The Landlord cannot be required
       to accept the rented premises early, especially if contractual Tenant's
       operating cost or decoration obligations are still outstanding. In the
       case of early yielding up of the rented premises, the Tenant shall be
       liable, regardless of whether or not it is at fault, for all damages or
       loss caused to the Landlord until the end of the tenancy, which are
       caused by the premises standing vacant, e.g. the increased risk of
       breaking and entering. In addition the Tenant shall bear until the end of
       the tenancy all costs of maintenance, renovation and repair of the rented
       premises, for which it would have been liable had it remained in
       occupation of the rented premises.

       In order to compensate for the administrative expenditure caused by an
       early change of tenant, the Landlord may demand a processing fee
       amounting to half a month's rent, plus VAT where applicable, but
       excluding ancillary costs.



                 SECTION 17 STRUCTURAL ALTERATIONS AND IMPROVEMENTS
                                 BY THE LANDLORD


                                    Page 16
<PAGE>

17.1   The Landlord may carry out repairs, renovation works and other structural
       alterations which are necessary for the maintenance of the building or
       the rented premises, or to avert impending danger or to repair damage,
       with or without the Tenant's agreement The same applies to all works
       necessary for the completion of the building. The Landlord undertakes to
       agree the timescale for the completion of the works with the Tenant, and
       to have as much consideration as possible for the running of the Tenant's
       business.

17.2   The same applies to works and structural measures which are not
       essential, but useful, in particular the modernization, alteration or
       extension of the building or the rented premises. The Landlord undertakes
       to agree the timescale for the execution of the works with the Tenant and
       to have consideration for the running of the Tenant's business.

17.3   The Tenant must keep any affected areas accessible and must not hinder or
       prevent the execution of any permissible works in accordance with the
       above paragraphs. The Tenant shall only be entitled to make claims, in
       particular claims for reduction in rent, in respect of the works
       described in 17.1 and 17.2, only insofar as and to the extent that the
       works have a considerable, unavoidable effect on the business operations
       of the Tenant, or exclude wholly or partially the use of the rented
       premises, and these effects are felt for a period in excess of one week.

17.4   If modernization works to the building are undertaken by the Landlord,
       the Landlord is entitled to increase the rent by an annual 11% of the
       proportion of the costs attributable to the rented premises with effect
       from the completion of the works. Section 3 MHG(1) applies accordingly.



                    SECTION 18 INSPECTION OF THE RENTED PREMISES


18.1   The Landlord or its representatives are entitled to inspect or have
       access to the rented premises during business hours for the purposes of
       inspecting the condition, in the presence of a representative of the
       Tenant. The same applies to persons authorized by the Landlord who
       require access to the rented premises for the execution of maintenance or
       repair works.

18.2   The Tenant must allow access to the rented premises at the end of the
       tenancy for viewing for the purposes of a subsequent letting, or if the
       Landlord intends to sell the property, daily during business hours, or
       outside these hours subject to agreeing an appointment.

18.3   All access must be agreed in advance and an appointment made with the
       Tenant. If delay would cause danger, the Landlord is entitled to have
       access to the rented premises at any time without prior notice.



      SECTION 19 TENANT CONSISTING OF MORE THAN ONE PERSON, EXPRESSION OF WILL

---------------------------------
(1) Abbreviation MHG not recognised

                                    Page 17
<PAGE>


19.1   The parties to the contract are understood as Landlord and Tenant even if
       they consist of several persons. If the Tenant consists of several
       persons they shall be jointly and severally liable for all obligations
       arising from the tenancy.

19.2   Several persons as Tenant mutually authorize one another for the issue
       and acceptance of declarations with beneficial and adverse effect on each
       person; this also applies for the acceptance of notifications, but not
       for the exercise of rights to give notice to terminate and the agreement
       to cancellation of the contract. These powers of authorization may only
       be revoked by each authorizing party making a written declaration to the
       Landlord; this is only valid for future declarations.

19.3   Facts which lead to an extension or reduction in the term of the tenancy
       for one tenant, or provide the grounds for a compensation claim or any
       other claim, shall apply equally to the other tenants.

19.4   If the Tenant's address changes and the Landlord is not informed of this,
       then the Landlord's declarations shall be deemed to have been validly
       served on the Tenant at the latest on the date of dispatch of a letter
       (postmark) to the most recently notified address plus a postal delivery
       period of one working day (excluding Saturdays), unless the Landlord is
       positively aware of the current address.



            SECTION 20 COSTS, CHANGES TO THE LEASE, PLACE OF PERFORMANCE,
                          SALE OF THE RENTED PREMISES


20.1   Each of the parties to the contract  shall bear its own costs and any
       expenses  linked to the conclusion of the contract.

20.2   Collateral agreements, changes and extensions to the contract may only be
       validly agreed in writing. The requirement for written form may itself
       only be cancelled in writing.

20.3   This contract is subject exclusively to the law of the Federal Republic
       of Germany. The jurisdictional venue for all obligations arising from the
       contract is Frankfurt am Main.

20.4   In the case of a future sale of the rented premises the purchaser shall
       take the place of Landlord for the purposes of the lease. The Tenant
       agrees that the purchaser shall assume all rights and obligations arising
       from the lease from the moment of transfer of possession (transfer of
       possession, benefits and burdens), this to be notified to the Tenant by
       the Landlord, rather than on transfer of title, provided these are to be
       fulfilled in a subsequent period. The Landlord is entitled to charge the
       purchaser for a proportion of the ancillary costs relating to the current
       statement period, in proportion to the period from transfer of
       possession. The Landlord shall be liable in accordance with
       Section 571 S. 2 Civil Code for the fulfilment by the purchaser of the
       obligations arising out of this contract. This liability shall be limited
       to a period of one year at the most from transfer of possession to the
       purchaser or from the moment that transfer of possession was notified to
       the Tenant, provided the Tenant has not notified the Landlord in writing
       within the aforementioned period that the Tenant has doubts that the
       purchaser will fulfil the contractual obligations in accordance with the
       contract. These doubts must be justified. The liability of the original
       Landlord in the case of a subsequent disposal of the


                                    Page 18
<PAGE>

       rented premises by the purchaser in accordance with Section 579 para. 2
       Civil Code is excluded.



                             SECTION 21 OTHER AGREEMENTS


21.1   The Landlord is entitled at any time to convert the rent and the
       statements issued, including the statement in respect of ancillary costs,
       to [EURO] and when these become due to collect amounts in [EURO] from the
       Tenant's account, provided the Tenant has authorized a direct debit
       mandate.

21.2   The Tenant's attention is drawn to the fact that in the building, after
       the Tenant has moved in, other rented units will be occupied by other
       tenants, and these other rented premises may only be completed after
       occupation by their respective tenants. Any adverse effect this causes on
       the Tenant's enjoyment of the premises shall be tolerated, without any
       claims being made, unless the use of the rented premises is substantially
       affected in excess of the foreseen degree.

21.3   The Tenant is aware that the use of the Duplex parking spaces in the
       underground garage is limited because of the sprinkler system. The Tenant
       is liable for any damage which may be caused to its own vehicles or those
       of third parties, or the sprinkler system, by careless use of the parking
       spaces.



               SECTION 22 EFFECTIVENESS OF THE CONTRACTUAL CONDITIONS


22.1   If one or more of the conditions of this contract is or becomes invalid,
       this shall not affect the validity of the remaining conditions. In the
       case of a provision becoming invalid or inoperable, it shall be
       retrospectively replaced by another provision which best approaches the
       original commercial intention.



22.2   The parties are aware of the specific requirements for written form of
       Section 566 Civil Code. They hereby mutually undertake, at the request
       of the other party, to ensure compliance with the written form legally
       required by Sections 126, 566 Civil Code in respect of all agreements
       hitherto made and agree to renounce termination on the grounds of failure
       to comply with the requirement for written form. This not only applies to
       the initial contract, but also to all present and future supplementary,
       alteration and extension agreements.




Frankfurt, the  _______________               _______________ , the __________

                                    Page 19
<PAGE>

_______________________________               ________________________________
              Landlord                                    Tenant

                                    Page 20
<PAGE>

                                                                     APPENDIX B)

                                                      Bank ref:

                                G U A R A N T E E

A lease, tenancy account no. ................., was conclUDed on ..............

between            Despa Deutsche Sparkassen-Immobilien-Anlage-Gesellschaft mbH,
                   Mainzer Landstrasse 37, 60329 Frankfurt am Main
                                                          -as Landlord company -

and                eToys

                                                                    -as Tenant -
in respect of office premises on the 5th & 6th floors of the property situate at
Bayerstrasse 21, Munich.

In accordance with this the Tenant is obliged to provide the Landlord by way of
security for the compliance with all Tenant's obligations arising from the
lease, with a security deposit of [EURO]62,354.91 (DM 121,955.61), which may
also take the form of a bank guarantee.

This said, we, the undersigned

      * (Bank/building society, name and address of branch responsible)


hereby grant in favour of the Landlord, renouncing any guarantor's pleas
(Section 768 Civil Code), annullability, offsetability (Section 770 Civil Code),
benefit of discussion (Section 771 Civil Code) and release of security
(Section 776 Civil Code) the absolute bank guarantee for all obligations for
which the Tenant is liable to the Landlord as a result of the lease (including
any supplements, rent reviews and extensions to this lease and including any
agreements concerning termination of the tenancy and any obligations to pay
compensation connected herewith), up to an amount of

                        [EURO]62,354.91 (DM 121,955.61)
 (in words: sixty-two thousand, three hundred and fifty-four Euros, ninety-one)

subject to the proviso that claims can only be made against us for financial
payment, and that the sums demanded up to the aforementioned guaranteed sum
shall be paid on first demand to the Landlord, if the Landlord notifies at the
same time that the Tenant has not complied with its contractual obligations.

We may not release ourselves from this obligation by means of deposit.

The jurisdictional venue governing all legal disputes arising from this
guarantee is Frankfurt am Main. Regardless of this, action may also be brought
against us to the responsible court in our own jurisdictional venue.

The guarantee is not time-limited. It will be extinguished on non-conditional
return of this document to us.

                                    Page 21
<PAGE>

_________________________________            _________________________________
(Place, date)                                (Bank's stamp, signature(s))

                                    Page 22
<PAGE>

                                                                     Appendix c)

                               Letter of Awareness

by the company of eToys
2 Queen Caroline Street, London, GB



Preamble
The company of eToys, , hereafter referred to as the Tenant Company, has taken a
tenancy of 922.44 m(2) office/commercial space in the property of Bayerstrasse
21 in Munich in accordance with a lease dated ...................... .

This said, we declare to the relevant Landlord, currently the company of Despa
Deutsche Sparkassen-Immobilien-Anlage-Gesellschaft mbH, Mainzer Landstrasse 37,
60329 Frankfurt am Main as follows:

We have a holding in the Tenant Company of ..... % of the
share/registered/partnership capital.

There is between the Tenant Company and ourselves a controlling/profit-and-loss
transfer agreement, in accordance with which we are entitled/obliged to accept
transfer of the profits and any losses. There is at present no intention to end
this profit-and-loss transfer agreement for the foreseeable future.

We undertake in favour of Despa or its legal successors to ensure that the
Tenant Company will at present and in future be in an economic position to be
able to comply fully with its obligations towards the relevant Landlord arising
from the Lease referred to above including any future supplements.

The foregoing obligations undertaken by us shall not be extinguished by our
ceasing to hold our share in the Tenant Company, wholly or in part. Before
transferring our holding we will inform you and/or any acquirer in good time. We
will also inform you immediately should we intend to conclude, alter or
terminate any company transfer agreements with the Tenant Company. This
declaration is governed exclusively by German law. Insofar as no other exclusive
jurisdictional venue is specified, the place of jurisdiction is Frankfurt am
Main.



Place/Date


            ...................................................................
            Company
            (Name)                                 (Name)


                                    Page 23