RuleStream Closes $6.3 Million Round of Funding; Masthead Venture Partners Leads Financing Round to Support Continued Growth and Product Initiatives

BOSTON & CLEVELAND--Oct. 6, 2003--RuleStream Corporation, the industry leader in knowledge-based engineering (KBE) and design automation software solutions, today announced that it has secured $4.5 million in venture capital funding from Masthead Venture Partners as part of an oversubscribed $6.3 million round of financing that includes existing investors. RuleStream will use the capital to continue to develop and bring to market solutions that dramatically improve the speed, efficiency and accuracy of the product design cycle--enabling engineers to develop product designs and proposals in days instead of weeks or months. RuleStream's global client base includes industry-leading manufactures such as Babcock & Wilcox, General Electric, and Interior Concepts.

"Today, RuleStream provides the most powerful KBE software solutions available. The substantial increase in investor funding truly validates our corporate vision and will enable us to continue to bring cutting edge KBE products to market," said Dave W. Vredenburgh, president and chief executive officer of RuleStream. "We are very excited that Masthead, a leading early-stage privately funded venture capital firm, has invested such a substantial amount with us. We believe that this investment can only serve to further our already strong technological lead in the industry. This funding will fuel the rapid growth of RuleStream Release 5 and other products."

RuleStream's suite of powerful, easy-to-use software tools helps manufacturers, engineers, and designers improve and speed up the design process. RuleStream enables the automation of every step of the product development cycle--from conceptual design through manufacturing, including field and in-house sales--while maintaining design flexibility and facilitating innovation. Additionally, RuleStream tools provide for direct integration with the SolidWorks(R) modeling environment, and the development and implementation of quality metrics.

"We are genuinely excited about the future direction of RuleStream," says Brian Owen, general partner of Masthead Venture Partners. "RuleStream has revolutionized the way that people conceive of KBE and design automation. They have brought application development out of the expensive and time-consuming morass of highly specialized programming to the ease and comfort of the engineer's desktop; and despite the slow economy, they have proven that they can capture and retain premier clients."

RuleStream's leading Knowledge-Based Engineering Software, RuleStream Release 5, is the most complete engineering software solution available today. Release 5 builds off of 15 years of software experience in helping engineers automate mechanical, electromechanical and systems designs. The product is easy to implement and requires little ramp up time, so engineers spend time using the product rather than learning about it.

Key features include:

-- Superior automation of all sales proposal and engineering design tasks

-- Advanced knowledge capture and management tools

-- Built from the ground up on a relational database platform that enables engineering workgroups to easily integrate with IT systems across the enterprise--a first for a KBE software system

-- Extensive and deep integration with CAD, CAE and PDM systems

-- Ability to evolve design models through continuously changing rule sets

-- The only KBE system to successfully blend the productivity of rule-based design automation with the flexibility of end-user interactivity and control

For pricing and availability please contact RuleStream at (866) 660-3100 or visit the company's website at www.rulestream.com.

About RuleStream

RuleStream was founded in 1999 as Navion Software Corporation with the mission to provide world-class knowledge-based design automation functionality that is both easy to use and available at a price point that every manufacturing company can afford. Since then, RuleStream has developed a revolutionary new software system that enables manufacturers to automate the creation of unique product models based on customer input and a knowledge base populated with rules, design processes, and engineering best practices. For more information visit www.rulestream.com.

About Masthead Venture Partners

Masthead Venture Partners (MVP) is a privately funded venture capital operation founded in 1997 to provide capital and management expertise to development-stage, technology-based companies. MVP's partners have diverse operating, venture capital, and Wall Street experience in high technology and life sciences companies. MVP invests in all stages of company growth, from initiating the formation of a company to later-round investments in established companies. Masthead's partners actively advise and support the management teams of the companies they fund, providing help with structuring, planning, and raising additional debt or equity capital as a company's business needs require. For more information, please visit http://www.mvpartners.com.