3. Compliance declaration of REALTECH AG, November 2004

“REALTECH AG complies with the recommendations of the Government Commission on the German Corporate Governance Code (dated May 21, 2003) with the following exceptions:

• No suitable deductible has been agreed to date for the D&O insurance agreed for the Executive Board and Supervisory Board (section 3.8 paragraph 2 of the code).
  Reason: No deductible has yet been agreed for the existing D&O insurance for the Executive and Supervisory Boards. We believe that agreeing a deductible would not improve the motivation and sense of responsibility with which the members of the Executive and Supervisory Boards of REALTECH AG go about the tasks and functions assigned to them. In addition, this insurance focuses on safeguarding the company's essential own risks, not on financial protection for board members. Moreover, it is a group insurance policy that also extends to leading REALTECH employees. We do not consider it appropriate to distinguish between board members and company employees.
  
  
• In connection with the variable remuneration components in the form of stock options and comparable schemes, no cap has been agreed by the Supervisory Board for two Executive Board members with regard to extraordinary, unforeseen developments (section 4.2.3 paragraph 2 of the code).
  Reason: This involves variable remuneration components promised to the two Executive Board members at a time when they worked as managers of the German subsidiary and before they were appointed to the Executive Board. Variable remuneration components agreed afterwards contain a cap for extraordinary, unforeseen developments.
  
  
• Up to now, remuneration of members of the Executive Board and Supervisory Board has not been disclosed individually in the notes of the company's consolidated financial statements (section 4.2.4 and section 5.4.5 paragraph 3 of the code).
  Reason: As the Executive and Supervisory Boards see it, specifying the individual remuneration of each individual member of the Executive Board or Supervisory Board does not provide a suitable foundation for assessing the appropriateness of the remuneration for the Executive Board's joint responsibility for company management or for the Supervisory Board's task as an overall body to monitor the Executive Board's management.
  
  
• Members of the Supervisory Board do not as yet receive performance-based remuneration (section 5.4.5 paragraph 2 of the code).
  Reason: The Executive and Supervisory Boards consider remuneration connected to the company's success not to be conducive to the legally required function of the Supervisory Board as an independent monitoring body and the associated necessary neutrality of interests."

Walldorf, November 25., 2004