Related Party Transactions and Outside Related Director Information

Phase Forward Incorporated (PFWD)

3/30/2006 Proxy Information

Dr. Bleicher served as Chief Executive Officer and President of Phase Forward Incorporated from September 1997 to March 1998 and from March 2002 to November 2002.

Mr. Bichara was responsible for Atlas Venture’s initial investment in Phase Forward Incorporated’s first round of venture financing in August 1997. He is currently a director of several private companies and has been a Senior Partner of Atlas Venture since 1998. Mr. Bichara joined Atlas Venture in 1993. Atlas Ventures owns 6.45 % of the Comapny Stock.

In August 2005, we acquired all of the outstanding capital stock of Lincoln Technologies, Inc. for approximately $11 million in cash, with a potential for additional cash consideration of up to $6 million, depending on the achievement of certain revenue milestones in 2005 and 2006. Before the acquisition, Channing Russell was President of Lincoln. Following the acquisition, Mr. Russell was appointed to continue to act as President of Lincoln, reporting to Robert Weiler, our President and Chief Executive Officer. Under the terms of the acquisition agreement between us and the stockholders of Lincoln, Mr. Russell, in his capacity as a stockholder of Lincoln, received cash consideration of approximately $4.1 million in exchange for his shares of Lincoln capital stock. Following the closing of the transaction, the former Lincoln stockholders received an additional $278,092 as a result of a purchase price adjustment in accordance with the terms of the acquisition agreement, of which approximately $87,000 is allocable to Mr. Russell. In addition, the 2005 revenue milestones referenced were achieved, which will result in the payment of an additional $2 million to the former stockholders of Lincoln, of which approximately $625,000 is allocable to Mr. Russell.