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Collaborative BPM and Compliance Firms Zaplet and MetricStream Merge

VENTUREWIRE - March 31, 2004

Redwood Shores, Calif. (3/31/2004) - Zaplet, a developer of collaborative business process management software for corporate compliance markets, said it has merged with MetricStream, a provider of software for quality and operational compliance market. The combined company will be called MetricStream. Financial details of the merger were not disclosed.

Shellye Archambeau, Zaplet's CEO, will become CEO of the combined company.

Gunjan Sinha, the chairman of MetricStream, will become executive chairman of the combined company. Other members of the executive management team include Ramana Mulpury, co-founder and CTO of MetricStream, and Gaurav Kapoor, CFO of MetricStream.

According to Ms. Archambeau, the two company's products have been integrated into one suite that is now available, however the company will further integrate the two going forward. The companies will merge operations, with a headquarters located in Redwood Shores, Calif.

According to Metric Stream, the combined product will enable enterprises to address a range of compliance issues including FDA, USDA, automotive regulations, and industry mandates; as well as the Sarbanes-Oxley Act and internal policy compliance.

While Zaplet had been focused on business process management since its inception in 1999, Ms. Archambeau was brought on in late 2002 to help the company refine its focus.

"We became more and more convinced we should focus on a specific area,"; she said. That area was Sarbaines-Oxley and internal policy compliance. The company released its more recent collaborative BPM product, Zaplet3 in October 2003. The product focused on "people-oriented activities" to ensure that processes are executed according to specification and user activities are self-documenting and auditable.

According to Anil Gupta, MetricStream vice president of marketing, the company launched the most recent version of the product during the third quarter of last year. MetricStream's product, Quality*Stream enables enterprises in automotive, food, FDA-regulated, high-technology and manufacturing industries to manage quality and operational compliance.

Ms. Archambeau joined Zaplet after the company had gone through significant restructuring over the previous year and half, including several rounds of layoffs and the departure of several executives from the management team, including its chief marketing officer, executive vice president of global sales and field operations, and vice president of services. Zaplet, which had approximately 190 employees at its height, had about 50 at the time Ms. Archambeau joined in late 2002.

While Ms. Archambeau would not comment how many employees each company had prior to the merger, she said the combined firm now has less than 100 and, as the companies operations merge, could cut employees whose positions may overlap.

MetricStream customers include Johnson Controls, and Aerojet Fine Chemicals.

Backers of the combined company include Kleiner Perkins Caufield & Byers, Questmark, and Integral Capital.

The new board of directors includes Zaplet board members Vinod Khosla, general partner at Kleiner Perkins Caufield & Byers; Mark Leslie, director and former CEO of Veritas; Masood Jabbar, retired executive vice president, global sales operations, Sun Microsystems; and Ms. Archambeau. Existing members of the MetricStream board including Mr. Mulpury; Mr. Sinha, chairman; and Mike Levinthal of Mayfield.

Zaplet has raised more than $100 million in funding Kleiner Perkins Caufield & Byers, Integral Capital Partners, Questark Partners, Accenture Technology Ventures, Cisco Systems, Novell, Oracle, and Research in Motion.

MetricStream had raised seed funding from individual investors.

Ms. Archambeau said the merged company may raise addtional funding as MetricStream expands. "Our investors are all still with us and supportive of what we're doing."