Document:

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                                                                    EXHIBIT 10.5

             FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

            This Agreement, dated as of December 27, 2001, is entered into by
and among each of the following parties: (I) Phase Forward Incorporated, a
Delaware corporation (the "Company"); (II) Schroder Ventures International Life
Sciences Fund II LP1, Schroder Ventures International Life Sciences Fund II LP2,
Schroder Ventures International Life Sciences Fund II LP3, Schroder Ventures
International Life Sciences Fund Strategic Partners L.P., Schroder Ventures
International Life Sciences Fund II Group Co-Investment Scheme, Schroder
Ventures Investments Limited (collectively, "Schroder"), North Bridge Venture
Partners II, L.P. ("North Bridge II"), North Bridge Venture Partners III, L.P.
("North Bridge III," and together with North Bridge II, "North Bridge"), Atlas
Venture Fund III, L.P. ("Atlas Venture Fund"), Atlas Venture Entrepreneurs' Fund
III, L.P. ("Atlas Venture Entrepreneurs", and, together with Atlas Venture Fund,
"Atlas Venture"), DLJ Capital Corp. ("DLJ Capital"), DLJ ESC II, L.P. ("DLJ
ESC"), Sprout Capital VIII, L.P. ("Sprout Capital"), Sprout Venture Capital,
L.P. ("Sprout Venture"), The Sprout CEO Fund, L.P. ("Sprout CEO", and, together
with DLJ Capital, DLJ ESC, Sprout Capital and Sprout Venture, "Sprout"), HLM/UH
Fund, L.P. ("HLM"), Pacific Venture Group II, L.P. ("Pacific"), PVG Associates
II, L.P., BioVentures Investors Limited Partnership ("BioVentures"), Gabriel
Schmergel, Ronald A. Agel, Mirza Mehdi, and Robert J. Carpenter, Nicholas
Stamos, George Kerns and Richard Alexander (each individually, an "Original
Series C Purchaser" and collectively, the "Original Series C Purchasers"); (III)
Silicon Valley Bank ("Silicon"); (IV) Thomas Weisel Capital Partners L.P.,
Thomas Weisel Capital Partners Employee Fund, L.P., TWP CEO Founders Circle
(QP), L.P., TWP CEO Founders Circle (AI), L.P., TWP 2000 Co-Investment Fund,
L.P., Thomas Weisel Capital Partners (Dutch), L.P. and Thomas Weisel Capital
Partners (Dutch II), L.P. (collectively, "Weisel"), Atlas Venture Fund III,
L.P., Atlas Venture Entrepreneurs' Fund III, L.P., Atlas Venture Fund V, L.P.,
Atlas Venture Parallel Fund V-A, C.V., Atlas Venture Parallel Fund V-B, C.V.,
Atlas Venture Entrepreneurs' Fund V, L.P., DLJ Capital Corp., DLJ ESC II, L.P.,
Sprout Capital VIII, L.P., Sprout Venture Capital, L.P., Sprout CEO Fund, L.P.,
Schroder Ventures International Life Sciences Fund II LP1, Schroder Ventures
International Life Sciences Fund II LP2, Schroder Ventures International Life
Sciences Fund II LP3, Schroder Ventures International Life Sciences Fund II
Strategic Partners L.P., Schroder Ventures International Life Sciences Fund II
Group Co-Investment Scheme, Schroder Ventures Investments Limited, North Bridge
Venture Partners II, L.P., North Bridge Venture Partners III, L.P., HLM/UH Fund,
L.P., Pacific Venture Group II, L.P., PVG Associates II, L.P., BioVentures
Investors Limited Partnership (each individually, a "New Series C Purchaser" and
collectively, the "New Series C Purchasers", and together with the Original
Series C Purchasers, the "Series C Purchasers", each of which is referred to
individually as a "Series C Purchaser") (V) Sprout, Atlas Venture, North Bridge
II, Mirza Mehdi, Nicholas Stamos, Michael Stamos, Angelo Stamos, G. Gordon M.
Large, Shiv Tasker, and Gabriel Schmergel (each individually, a "Series B
Purchaser" and collectively, the "Series B Purchasers"); (VI) Atlas Venture,
North Bridge II, Gustav A.

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Christensen, Gabriel Schmergel, Ronald A. Agel, Mirza Mehdi, Robert J.
Carpenter, and Stephen J. Schaubert (each individually, a "Series A Purchaser"
and collectively, the "Series A Purchasers"); (VII) ABS Capital Partners, L.P.;
ABS Capital Partners II, L.P.; St. Paul Fire and Marine Insurance Company; St.
Paul Venture Capital IV, LLC; St. Paul Venture Capital V, LLC; Housatonic Equity
Investors SBIC, L.P.; Onset Enterprise Associates, LP; Onset Enterprise
Associates II, LP; Onset Ventures Services Corporation; Salix Ventures, L.P.;
New Enterprise Associates VI, LP.; FSC Corporation, Inc.; Paul L. Gomory Jr.
Trust; Lisa A. Mitchell; Philip J. Goward; Paul L. McCullough; Michael Lack;
Thomas S. Volpe; Theodore Ridgway; Theodore H. Ashford; and PharmaSoft, Inc.
(each, individually, an "Original Series D Purchaser" and collectively, the
"Original Series D Purchasers"); (VIII) ABS Capital Partners, L.P., ABS Capital
Partners II, L.P., Atlas Venture Fund III, L.P., Atlas Venture Entrepreneurs'
Fund III, L.P., Atlas Venture Fund V, L.P., Atlas Venture Parallel Fund V-A,
C.V., Atlas Venture Parallel Fund V-B, C.V., Atlas Venture Entrepreneurs' Fund
V, L.P., BioVentures Investors Limited Partnership, DLJ Capital Corp., DLJ ESC
II, L.P., Eli Lilly and Company, Sprout Capital VIII, L.P., Sprout Venture
Capital, L.P., Sprout CEO Fund, L.P., HLM/UH Fund, L.P., Housatonic Equity
Investors SBIC, L.P., International Business Machines Corporation, New
Enterprise Associates VI, LP., North Bridge Venture Partners II, L.P., North
Bridge Venture Partners III, L.P., Pacific Venture Group II, L.P., PVG
Associates II, L.P., Salix Ventures, L.P., Schroder Ventures International Life
Sciences Fund II LP1, Schroder Ventures International Life Sciences Fund II LP2,
Schroder Ventures International Life Sciences Fund II LP3, Schroder Ventures
International Life Sciences Fund II Strategic Partners L.P., Schroder Ventures
International Life Sciences Fund II Group Co-Investment Scheme, Schroder
Ventures Investments Limited, St. Paul Venture Capital VI, LLC, and Weisel (each
individually, a "New Series D Purchaser" and collectively, the "New Series D
Purchasers", and together with the Original Series D Purchasers, the "Series D
Purchasers", each of which is referred to individually as a "Series D
Purchaser", and the Series D Purchasers, together with the Series A Purchasers,
Series B Purchasers, and the Series C Purchasers, the "Purchasers"; solely for
the purposes of Article III and Article VI hereof, the term "Purchasers" shall
be deemed to include Silicon) and (IX) Paul Bleicher, Paul A. Bleicher 1999
Irrevocable Trust, Andrew Dale, Richard Dale, Dorit E. Harverd, Harverd-Dale
Children 1999 Irrevocable Trust, dated July 8, 1999, Jeffrey Klofft, G. Gordon
M. Large, Gillian Lewin, Shiv Tasker, The Tasker Children 1999 Irrevocable
Trust, Monisha Tasker (individually, a "Founder" and collectively, the
"Founders"). The Purchasers and the Founders are sometimes referred to in this
Agreement as the "Stockholders."

                                   BACKGROUND

            WHEREAS, the Founders hold 2,505,266 shares of the Common Stock of
the Company, par value $0.01 per share (the "Common Stock");

            WHEREAS, the Series A Purchasers hold 4,000,000 shares of the Series
A Preferred Stock of the Company, par value $0.01 per share (the "Series A
Preferred Stock");

            WHEREAS, the Series B Purchasers hold 4,531,063 shares of the Series
B Preferred Stock of the Company, par value $0.01 per share (the "Series B
Preferred Stock");

            WHEREAS, the Series C Purchasers hold 9,187,640 shares of the Series
C Preferred Stock of the Company, par value $0.01 per share (the "Series C
Preferred Stock");

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            WHEREAS, the Original Series D Purchasers either hold directly or
have a right to receive upon release from escrow 3,879,482 shares of the Series
D Preferred Stock of the Company, par value $0.01 per share (the "Series D
Preferred Stock") ;

            WHEREAS, Silicon is the holder of a Warrant to Purchase Stock to
purchase shares of Series C Preferred Stock issued on August 9, 2000 in the
amount of 34,330 shares (the "SVB Warrant");

            WHEREAS, the Company, the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers, the Original Series D Purchasers, Silicon
and the Founders have previously entered into that certain Fourth Amended and
Restated Investors' Rights Agreement, dated as of August 14, 2001, (the "Prior
Agreement");

            WHEREAS, the Company and the New Series D Purchasers have entered
into a Series D Convertible Preferred Stock Purchase Agreement of even date
herewith (the "New Purchase Agreement") pursuant to which the New Series D
Purchasers have agreed to purchase 1,230,770 shares of Series D Preferred Stock;
and

            WHEREAS, the Stockholders wish to amend and restate the Prior
Agreement and to provide for (i) the basis for electing members of the Board of
Directors of the Company, (ii) certain arrangements with respect to the
registration of shares of capital stock of the Company under the Securities Act
of 1933, as amended (the "Securities Act"), and (iii) a right of first refusal
and co-sale with respect to the sale of the Founders' shares of capital stock of
the Company;

            NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, and the consummation of the transactions
contemplated by the New Purchase Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:

                                    ARTICLE I

                                   DEFINITIONS

            1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:

            "Commission" means the U.S. Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.

            "Initial Public Offering" means the initial public offering of
shares of Common Stock pursuant to a Registration Statement at a price to the
public of at least $11.36 per share (subject to appropriate adjustments for
stock splits, stock dividends, combinations and other similar recapitalizations
affecting such shares) resulting in gross proceeds to the Company (net of all
underwriting discounts and commissions) of at least $20,000,000.

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            "IPO Shares" means the total number of shares to be offered by the
Company in the Initial Public Offering as reflected on the Company's final
prospectus.

            "Other Registrable Shares" means (i) shares of Common Stock held by
the Founders on the date hereof (the "Founders' Stock") and (ii) any other
shares of Common Stock issued in respect of such shares of Founders' Stock
(because of stock splits, stock dividends, reclassifications, recapitalizations
or similar events), provided, however, that shares of Common Stock which are
Other Registrable Shares shall cease to be Other Registrable Shares (a) upon any
sale pursuant to a Registration Statement or Rule 144 under the Securities Act
("Rule 144"), (b) upon any sale in any manner to a person or entity which, by
virtue of Article VI, Section 2 of this Agreement, is not entitled to the rights
provided by this Agreement or (c) at such time as the holder of such shares may
sell all such shares pursuant to Rule 144 in any three-month period.

            "Pro-Rata Share" means the fraction, the numerator of which is equal
to the number of shares of Common Stock issued or issuable upon conversion of
the Series C Shares held by such Series C Purchaser and the denominator of which
is the total number of Voting Shares of the Company.

            "Purchaser Registrable Shares" means (i) the shares of Common Stock
issued or issuable upon conversion of the Series A Shares; (ii) the shares of
Common Stock issued or issuable upon conversion of the Series B Shares; (iii)
the shares of Common Stock issued or issuable upon conversion of the Series C
Shares; (iv) the shares of Common Stock issued or issuable upon conversion of
the Series D Shares; (v) any shares of Common Stock, and any shares of Common
Stock issued or issuable upon the conversion or exercise of any other
securities, acquired by the Purchasers pursuant to Articles IV or V of this
Agreement; (vi) solely for the purposes of Article III and Article VI hereof,
the shares of Common Stock issued upon exercise of the SVB Warrant or issued or
issuable upon conversion of shares of Series C Preferred Stock issued upon
exercise of the SVB Warrant; and (vii) any other shares of Common Stock issued
in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Purchaser Registrable Shares shall cease
to be Purchaser Registrable Shares (a) upon any sale pursuant to a Registration
Statement or Rule 144, or (b) upon any sale in any manner to a person or entity
which, by virtue of Article VI, Section 2 of this Agreement, is not entitled to
the rights provided by this Agreement. Wherever reference is made in this
Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Registrable Shares even if such
conversion has not yet been effected.

            "Registrable Shares" means the Purchaser Registrable Shares
and the Other Registrable Shares.

            "Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-4 or Form S-8, or any successor
form thereto, or any registration statement covering only securities proposed to
be issued in exchange for securities or assets of another corporation).

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            "Registration Expenses" means the expenses described in Article III,
Section 4 below.

             "Series A Shares" shall mean the shares of Series A Preferred Stock
issued and sold pursuant to that certain Series A Convertible Preferred Stock
Purchase Agreement by and among the Company and Paul Bleicher, Richard Dale,
Jeffrey Klofft, Atlas Venture, North Bridge II, Gustav A. Christensen, Gabriel
Schmergel, Ronald A. Agel, Mirza Mehdi, Robert J. Carpenter and Stephen J.
Schaubert dated as of November 14, 1997.

            "Series B Shares" shall mean the shares of Series B Preferred Stock
issued and sold pursuant to that certain Series B Convertible Preferred Stock
Purchase Agreement by and among the Company and Sprout, Atlas Venture, North
Bridge II, Mirza Mehdi, Nicholas Stamos, G. Gordon M. Large, Shiv Tasker, and
Gabriel Schmergel, dated as of November 12, 1998.

            "Series C Registrable Shares" shall mean the shares of Common Stock
issued or issuable upon conversion of the Series C Shares; provided, however,
that shares of Common Stock which are Series C Registrable Shares shall cease to
be Series C Registrable Shares (a) upon any sale pursuant to a Registration
Statement or Rule 144, or (b) upon any sale in any manner to a person or entity
which, by virtue of Article VI, Section 2 of this Agreement, is not entitled to
the rights provided by this Agreement.

            "Series C Shares" shall mean the shares of Series C Preferred Stock
issued and sold pursuant to that certain Series C Convertible Preferred Stock
Purchase Agreement by and among the Company and the Original Series C
Purchasers, dated as of November 18, 1999, and the shares of Series C Preferred
Stock issued and sold pursuant to that certain Series C Convertible Preferred
Stock Purchase Agreement by and among the Company and the New Series C
Purchasers, dated as of August 9, 2000, as amended by Amendment No. 1 thereto
dated February 6, 2001.

            "Series D Shares" shall mean the shares of Series D Preferred Stock
issued and sold to the Original Series D Purchasers pursuant to the Agreement
and Plan of Merger dated as of August 14, 2001 (the "Merger Agreement") by and
among the Company, PF Acquisitions Corporation and Clinsoft Corporation, and the
shares of Series D Preferred Stock issued and sold pursuant to the New Purchase
Agreement.

            "Stockholders" means the Purchasers, the Founders and any persons or
entities to whom the rights granted under this Agreement are transferred by any
Purchaser or any Founder, their successors or assigns pursuant to Article VI,
Section 2 below.

            "Voting Shares" means any and all shares of Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and/or shares of capital stock of the Company, by whatever name
called, which carry voting rights (including voting rights which arise by reason
of default) which are now held or subsequently acquired by a Stockholder,
however acquired, including, without limitation, shares of capital stock
acquired pursuant to stock splits, stock dividends combinations and other
similar events affecting such shares.

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                                   ARTICLE II

                                  VOTING RIGHTS

            1. Voting of Shares.

                  (a) In any and all elections of directors of the Company
(whether at a meeting or by written consent in lieu of a meeting), each
Stockholder shall vote or cause to be voted all Voting Shares held by him or it,
or over which he or it has voting control, and otherwise use his or its
respective best efforts, so as to fix the number of directors of the Company at
nine (9), and to elect, (i) so long as such Founders holding not less than
750,000 shares (as adjusted for stock splits, stock dividends, combinations,
reclassifications and the like) of Common Stock are employed by the Company, one
member designated by the Founders (by action of the holders of a majority of the
Voting Shares held by the Founders), (ii) one member designated by Atlas
Venture, (iii) one member designated by North Bridge (who, together with the
member designated by Atlas Venture, shall be deemed to be the directors
designated by the holders of the Series A Shares pursuant to the Company's Fifth
Restated Certificate of Incorporation, as amended by the Certificate of
Amendment thereto field with the Delaware Secretary of State on December ___,
2001 (the "Charter")), (iv) one member designated by Sprout (who shall be deemed
to be the director designated by the holders of the Series B Shares pursuant to
the Company's Charter), (v) one member designated by Schroder, (vi) one member
designated by Weisel (who, together with the member designated by Schroder,
shall be deemed to be the directors designated by the holders of the Series C
Shares pursuant to the Company's Charter), (vii) one member designated by ABS
Capital Partners, L.P. (who shall be deemed to be the director designated by the
holders of the Series D Shares pursuant to the Company's Charter) (viii) the
person then serving as the Company's Chief Executive Officer, and (ix) one
outside member jointly designated by the Board of Directors. The director
initially designated by the Founders shall be Paul Bleicher, the director
initially designated by Atlas Venture shall be Axel Bichara, the director
initially designated by North Bridge shall be Richard D'Amore, the director
initially designated by Sprout shall be Ron Hunt, the director initially
designated by Schroder shall be Eugene D. Hill, III, the director initially
designated by Weisel shall be Daniel Dross, the director initially designated by
ABS Capital Partners, L.P. shall be John D. Stobo and the outside director shall
be Peter Hutt.

                  (b) As long as Pacific holds at least 100,000 Series C Shares
(as adjusted for any stock splits, stock dividends, recapitalizations or the
like), Pacific shall be entitled to have one representative attend all meetings
of the board of directors of this corporation as a non-voting observer, and in
such capacity, Pacific shall be entitled to receive copies of all notices,
minutes, consents and other materials provided to directors of the Corporation.

                  (c) The Company shall provide the Stockholders with 30 days'
prior written notice of any intended mailing of a notice to stockholders for a
meeting at which directors are to be elected. The Stockholders shall give
written notice to all other parties to this Agreement, no later than 20 days
prior to such mailing, of the person designated by them as nominee for election
as director. If the Stockholders fail to give notice to the Company as provided
above, it shall be deemed that their designees then serving as directors shall
be their designees for reelection.

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                  (d) Any director of the Company may be removed from the Board
of Directors in the manner allowed by law and the Company's Charter and Bylaws;
provided, however, that (i) the member designated by the Founders may be removed
only with the consent of the holders of a majority of the Voting Shares held by
the Founders, (ii) the member designated by Atlas Venture may be removed only
with the consent of Atlas Venture, (iii) the member designated by North Bridge
may be removed only with the consent of North Bridge, (iv) the member designated
by Sprout may be removed only with the consent of Sprout, (v) the member
designated by Schroder may be removed only with the consent of Schroder, (vi)
the member designated by Weisel may be removed only with the consent of Weisel,
(vii) the member designated by ABS Capital Partners, L.P. may be removed only
with the consent of ABS Capital Partners, L.P., (viii) the Company's Chief
Executive Officer may be removed as a director at any time by the vote of a
majority of the Board of Directors, (ix) the outside director may be removed as
a director at any time by the vote of a majority of the Board of Directors.

            2. Negative Covenants. So long as at least ten percent (10%) of the
originally issued Series A Shares, Series B Shares, Series C Shares, or Series D
Shares remain outstanding (subject to adjustment for stock splits, stock
dividends, reclassifications, recapitalization or similar events), the Company
shall not, without the prior written consent of at least seventy five percent
(75%) of the designees to the Board of Directors of the Company identified in
Section 1(a)(ii) through (vi) hereof:

                  (a) establish any employee benefit plan as defined in the
Employee Retirement Income Security Act of 1974, as amended;

                  (b) adopt an annual business plan and budget, including the
annual budget for management compensation;

                  (c) make any borrowings, issue any debt securities (whether or
not convertible) or guarantee (directly or indirectly) any indebtedness,
including any such debt, guarantee or obligation secured by accounts receivable,
inventory, real property, fixtures or equipment; provided, that this subsection
2(c) shall not apply to unsecured debt of less than two million dollars
($2,000,000); and

                  (d) declare or pay any dividends (payable other than in Common
Stock or other securities and rights convertible into or entitling the holder
thereof to receive, directly or indirectly, additional shares of Common Stock of
this corporation) on any class of stock or equity securities of the Company.

            3. No Revocation. The voting agreements contained herein are coupled
with an interest and may not be revoked, except by written consent of holders of
a majority of the Voting Shares held by the Series A Purchasers, the Series B
Purchasers, the Series C Purchasers, and the Series D Purchasers voting on an
as-converted basis together as a single class, and holders of twenty-five
percent (25%) of the Voting Shares held by the Founders; provided, however, that
in the event that any such revocation affects the appointment of any director
pursuant to Section 1(a) above, then such revocation shall require the consent
of the Stockholders who have the right to designate such director.

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            4. Indemnification. In the event that any director elected pursuant
to Section 1 of this Article II shall be made or threatened to be made a party
to any action, suit or proceeding with respect to which he may be entitled to
indemnification by the Company pursuant to its Charter or Bylaws, or otherwise,
he shall be entitled to be represented in such action, suit or proceeding by
counsel of his choice and the reasonable expenses of such director shall be
reimbursed by the Company to the extent provided in or authorized by said
Charter or Bylaws. Each Stockholder agrees not to take any action to amend any
provisions of the Charter or Bylaws of the Company relating to indemnification
of directors, as presently in effect, to reduce the benefits thereof to any
director without the prior written consent of a sixty-six and two-thirds percent
(66 2/3 %) of the Voting Shares held by the Stockholders.

            5. Restrictive Legend. All certificates representing Voting Shares
hereafter acquired by the Stockholders or any transferee of the Stockholders
bound by this Agreement shall have affixed thereto a legend substantially in the
following form:

            "The shares of stock represented by this certificate are subject to
            certain voting agreements as set forth in a Fifth Amended and
            Restated Investors' Rights Agreement, as the same may be amended or
            restated from time to time, by and among the registered holder of
            this certificate, the corporation and certain other shareholders of
            the corporation, a copy of which is available for inspection at the
            office of the Secretary of the corporation."

            6. Transfers of Voting Rights. Any transferee to whom Voting Shares
are transferred by a Stockholder in accordance with the terms of this Agreement,
whether voluntarily or by operation of law, shall be bound by the voting
obligations imposed upon the transferor under this Agreement, and shall be
entitled to the rights granted to the transferor under this Agreement, to the
same extent as if such transferee were a Stockholder hereunder.

                                   ARTICLE III

                               REGISTRATION RIGHTS

            1. Required Registrations.

                  (a) At any time after the earlier of November 18, 2002 or six
months after the closing of the Company's first underwritten public offering of
shares of Common Stock pursuant to a Registration Statement, any Purchaser or
Purchasers holding sixty-six and two-thirds percent (66 2/3%) of the Purchaser
Registrable Shares may request, in writing, that the Company effect the
registration on Form S-1 or Form S-2 (or any successor form thereto) of
Purchaser Registrable Shares held by holders having an aggregate offering price
of at least $10,000,000 (based on the then current market price or fair value).
If the Purchaser or Purchasers initiating the registration intend(s) to
distribute the Purchaser Registrable Shares by means of an underwriting, such
Purchasers shall so advise the Company in its request. In the event such
registration is underwritten, all Purchasers proposing to distribute their
securities through such underwriting under this Section 1(a) shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting and the rights of other Purchasers to participate
in such registration shall be conditioned on such Purchasers' participation in
such

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underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all other Purchasers. Such
Purchasers shall have the right, by giving written notice to the Company within
30 days after the Company provides its notice, to elect to have included in such
registration such of their Purchaser Registrable Shares as such Purchasers may
request in such notice of election; provided that, if the underwriter (if any)
managing the offering determines that, because of marketing factors, all of the
Purchaser Registrable Shares requested to be registered by all Purchasers may
not be included in the offering, then all Purchasers who have requested
registration shall participate in the registration pro rata based upon the
number of Purchaser Registrable Shares which they have requested to be so
registered. Thereupon, the Company shall, as expeditiously as possible, use its
best efforts to effect the registration on Form S-1 or Form S-2 (or any
successor form) of all Purchaser Registrable Shares which the Company has been
requested to so register.

                  (b) Subject to the last sentence of this paragraph (b), at any
time after the earlier of November 18, 2002 or six months after the closing of
the Company's first underwritten public offering of shares of Common Stock
pursuant to a Registration Statement, any Series C Purchaser or Purchasers
holding a majority of the Series C Registrable Shares may request, in writing,
that the Company effect the registration on Form S-1 or Form S-2 (or any
successor form thereto) of Series C Registrable Shares held by holders having an
aggregate offering price of at least $10,000,000 (based on the then current
market price or fair value). If the Series C Purchaser or Purchasers initiating
the registration intend(s) to distribute the Series C Registrable Shares by
means of an underwriting, such Series C Purchasers shall so advise the Company
in its request. In the event such registration is underwritten, all Purchasers
proposing to distribute their securities through such underwriting under this
Section 1(b) shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting and the rights of
other Purchasers to participate in such registration shall be conditioned on
such Series C Purchasers' participation in such underwriting. Upon receipt of
any such request, the Company shall promptly give written notice of such
proposed registration to all other Purchasers. Such Purchasers shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Purchaser Registrable Shares as such Purchasers may request in such notice
of election; provided that, if the underwriter (if any) managing the offering
determines that, because of marketing factors, all of the Purchaser Registrable
Shares requested to be registered by all Purchasers may not be included in the
offering, then all Purchasers who have requested registration shall participate
in the registration pro rata based upon the number of Purchaser Registrable
Shares which they have requested to be so registered. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-1 or Form S-2 (or any successor form) of all Purchaser
Registrable Shares which the Company has been requested to so register.
Notwithstanding the foregoing, the rights granted under this paragraph (b) shall
no longer be in effect if the holders of sixty-six and two-thirds percent (66
2/3%) of the Series C Registrable Shares participate in a registration initiated
pursuant to paragraph (a) above.

                  (c) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Purchaser or Purchasers or Founder or Founders holding Registrable
Shares may request, in writing, that the Company effect the registration on Form
S-3 (or such successor form), of Registrable Shares held by such holders having
a minimum aggregate offering price of at least

                                       9
<PAGE>
$1,000,000 (based on the then current public market price or fair value). In the
event such registration is underwritten, all Purchasers proposing to distribute
their securities through such underwriting under this Section 1(c) shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Upon receipt of any such request,
the Company shall promptly give written notice of such proposed registration to
all Purchasers, Stockholders and Founders. Such Purchasers, Stockholders and
Founders shall have the right, by giving written notice to the Company within 30
days after the Company provides its notice, to elect to have included in such
registration such of their Registrable Shares as such Purchasers, Stockholders
or Founders may request in such notice of election; provided that, if the
underwriter (if any) managing the offering determines that, because of marketing
factors, all of the Registrable Shares requested to be registered by all
Purchasers, Stockholders or Founders may not be included in the offering, then,
prior to the inclusion of any Other Registrable Shares in such offering, all
Purchasers who have requested registration shall participate in the registration
pro rata based upon the number of Purchaser Registrable Shares which they have
requested to be so registered (the "Requested Purchaser Shares"). In the event
that any Purchaser is not permitted to include all of such Requested Purchaser
Shares in the offering, no Other Registrable Shares shall be included in such
offering. If all of the Requested Purchaser Shares are included in the offering,
the Founders may participate in the registration, to the extent permitted by the
underwriter managing the offering, pro rata based on the number of Other
Registrable Shares which they have requested to be so registered. Thereupon, the
Company shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or any successor form) of all Registrable Shares which
the Company has been requested to so register. After the Company's first public
offering of its securities, the Company will use its best efforts to qualify
(and remain eligible) for Form S-3 registration or a similar short-form
registration.

                  (d) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a), nor more than 1 registration pursuant
to paragraph (b); provided, however, that such obligation shall be deemed
satisfied only when a registration statement covering the applicable Registrable
Shares shall have (i) become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such Registrable Shares have
been sold pursuant thereto, or (ii) been withdrawn at the request of the
Purchasers requesting such registration (other than as a result of information
concerning the business or financial condition of the Company which is made
known to the Purchasers after the date on which such registration was requested
or if the underwriter for the registration determines that adverse market
conditions exist that would seriously jeopardize the success of the
registration). In addition, the Company shall not be required to effect any
registration within 180 days after the effective date of any other Registration
Statement on Form S-1 or S-3 involving an underwritten offering of the Company
and the Company shall not be required to file more than two Registration
Statements on Form S-3 in any one year period.

                  (e) If at the time of any request to register Registrable
Shares pursuant to this Article III, Section 1, the Company is engaged or has
plans to engage within 30 days of the time of the request in a registered public
offering of securities as to which the Purchasers, Stockholders or Founders may
include Registrable Shares or is engaged in any other activity which, in the
good faith determination of the Company's Board of Directors, would be
materially adversely affected by the requested registration to the material
detriment of the Company, then the Company may at its option direct that such
request be delayed for a period not in excess of 120

                                       10
<PAGE>
days from the effective date of such offering or the date of commencement of
such other material activity, as the case may be, such right to delay a request
to be exercised by the Company not more than once in any two-year period.

            2. Incidental Registration.

            (a) Whenever the Company proposes to file a Registration Statement
(which for purposes of this Section 2(a) shall include a Registration Statement
filed pursuant to Section 1(c) above but shall not include a Registration
Statement filed in connection with the Company's initial public offering) at any
time and from time to time, it will, prior to such filing, give written notice
to all Purchasers and Founders of its intention to do so and, upon the written
request of such a Purchaser or Purchasers or Founder or Founders given within 30
days after the Company provides such notice (which request shall state the
intended method of disposition of such Registrable Shares), the Company shall
use its reasonable best efforts to cause all Registrable Shares which the
Company has been requested by such Purchaser or Purchasers or Founder or
Founders to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the
intended methods of distribution specified in the request of such Purchaser or
Purchasers or Founder or Founders; provided, however, that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Article III, Section 2 without obligation to any Purchaser or Founder.

            (b) In connection with any registration under this Article III,
Section 2 involving an underwriting, the Company shall not be required to
include any Registrable Shares in such registration unless the holders thereof
accept the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it. If in the opinion of the managing underwriter it is
desirable because of marketing factors to limit the number of Registrable Shares
to be included in the offering, then the Company shall be required to include in
the registration only that number of Registrable Shares, if any, which the
managing underwriter believes should be included therein; provided however,
that, such limitation shall not decrease the number of Series C Registrable
Shares requested to be registered in the offering to a number less than thirty
percent (30%) of the number of Series C Registrable Shares originally requested
to be registered in the offering; and provided further, that, no persons or
entities other than the Company, the Purchasers, Founders and other persons or
entities holding registration rights shall be permitted to include securities in
the offering. If the number of Registrable Shares to be included in the offering
in accordance with the foregoing is less than the total number of shares which
the Purchasers and Founders have requested to be included, then the Purchasers
and Founders who have requested registration and other holders of securities
entitled to include them in such registration shall participate in the
registration pro rata based upon their total ownership of shares of Common Stock
(giving effect to the conversion into Common Stock of all securities convertible
thereinto); provided, however, that the Registrable Shares held by Founders
shall be excluded from the offering before any Registrable Shares held by
Purchasers are excluded. If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.

                                       11
<PAGE>
            3. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its reasonable best efforts to effect
the registration of any of the Registrable Shares under the Securities Act, the
Company shall:

                  (a) File with the Commission a Registration Statement with
respect to such Registrable Shares and use its reasonable best efforts to cause
that Registration Statement to become and remain effective;

                  (b) As expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to keep
the Registration Statement effective, in the case of a firm commitment
underwritten public offering, until each underwriter has completed the
distribution of all securities purchased by it and, in the case of any other
offering, until the earlier of the sale of all Registrable Shares covered
thereby or 180 days after the effective date thereof;

                  (c) As expeditiously as possible furnish to each selling
Purchaser such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Purchaser may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Shares held by the Purchaser;

                  (d) As expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of such states as the selling Purchaser
shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Purchaser to consummate the public
sale or other disposition in such states of the Registrable Shares held by the
selling Purchaser; provided, however, that the Company shall not be required in
connection with this paragraph (d) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction; and

                  (e) Use its best efforts to list the Registrable Shares
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed.

            If the Company has delivered preliminary or final prospectuses to
the selling Purchasers and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Purchasers and, if requested, the selling Purchasers shall
immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide each selling
Purchaser with revised prospectuses and, following receipt of the revised
prospectuses, the selling holder shall be free to resume making offers of the
Registrable Shares.

            4. Allocation of Expenses. The Company shall pay all Registration
Expenses of all registrations under this Agreement; provided, however, that if a
registration under Article III, Section 1(a) or 1(b) is withdrawn at the request
of the Purchasers requesting such registration (other than as a result of
information concerning the business or financial condition of the Company which
is made known to the Purchasers after the date on which such registration was

                                       12
<PAGE>
requested) and if the requesting Purchasers elect not to have such registration
counted as a registration requested under Article III, Section 1(a) or 1(b), the
requesting Purchasers shall pay the Registration Expenses of such registration
pro rata in accordance with the number of their Registrable Shares included in
such registration. For purposes of this Article III, Section 4, the term
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with the provisions of this Article III, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of auditors and counsel for the Company and the fees
and expenses of one counsel selected by the selling Purchaser(s) to represent
the selling Purchaser(s) and state Blue Sky fees and expenses, but excluding
underwriting discounts, selling commissions, the fees and expenses of selling
Purchasers' own counsel (other than the one counsel selected to represent all
selling Purchaser(s)).

            5. Indemnification and Contribution.

                  (a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company shall
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or final prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.

                  (b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, shall indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act, Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Registrable

                                       13
<PAGE>
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information relating to such seller furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; provided,
however, that the obligations of such sellers of Registrable Shares hereunder
shall be limited to an amount equal to the proceeds to each seller from the
Registrable Shares sold in connection with such registration.

                  (c) Each party entitled to indemnification under this Article
III, Section 5 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article III, Section 5, except
to the extent that such failure to provide notice causes prejudice to the
Indemnified Party. The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall pay such
expense if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
differing interests between or the existence or availability of different
defenses to the Indemnified Party and any other party represented by such
counsel in such proceeding. No Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect of such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party.

                  (d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
holder of Registrable Shares exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Article III, Section 5 but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Article III, Section 5 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
such selling holder or any such controlling person in circumstances for which
indemnification is provided under this Article III, Section 5; then, in each
such case, the Company and such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportions so that such holder is responsible for the
portion represented by the percentage that the public offering price of its
Registrable Shares offered by the Registration Statement bears to the public
offering price of all

                                       14
<PAGE>
securities offered by such Registration Statement, and the Company is
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such holder will be required to contribute any amount in excess of
the proceeds to it of all Registrable Shares sold by it pursuant to such
Registration Statement, and (B) no person or entity guilty of fraudulent
misrepresentation, within the meaning of Section 11(f) of the Securities Act,
shall be entitled to contribution from any person or entity who is not guilty of
such fraudulent misrepresentation.

            6. Indemnification with Respect to Underwritten Offering. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Article III, Section 1, the Company shall
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including, without limitation, customary provisions
with respect to indemnification by the Company of the underwriters of such
offering.

            7. Information by Holder. Each Purchaser including Registrable
Shares in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.

            8. "Stand-Off" Agreement. Each Stockholder hereby agrees that it
will not, without the prior written consent of the managing underwriter, during
(a) the period commencing on the date of the final prospectus relating to the
Company's initial public offering and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred
eighty (l80) days) and (b) the period commencing on the date of the final
prospectus relating to any subsequent underwritten public offering of the
Company's Common Stock and ending on the date specified by the Company and the
managing underwriter (such period not to exceed ninety (90) days): (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then held by the Stockholder or re thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
provisions of this Section 8 shall: (A) not apply to the sale of any shares to
an underwriter pursuant to an underwriting agreement; and (B) only be applicable
to the Stockholders if all officers and directors and greater than one percent
(1%) stockholders of the Company enter into similar agreements. The underwriters
in connection with a public offering of the Company's Common Stock are intended
third party beneficiaries of this Section 8 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Shares of each Stockholder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period. Notwithstanding the foregoing, in the event that
the Company or the managing underwriter

                                       15
<PAGE>
releases any Stockholder from the requirements of the foregoing market stand-off
provisions in this Section 8, any Purchaser not so released shall be entitled to
a corresponding pro rata release.

            9. Limitations on Subsequent Registration Rights. The Company shall
not, without the prior written consent of Purchasers holding at least sixty-six
and two-thirds percent (66 2/3%) of the Purchaser Registrable Shares and
Founders holding at least twenty-five percent (25%) of the Other Registrable
Shares, provided such Founders are employed with the Company, enter into any
agreement (other than this Agreement) with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder to (a) make a demand registration or (b) include securities of the
Company in any Registration Statement, unless under the terms of such agreement,
such holder or prospective holder includes such securities (the "Third Party
Shares") only on terms substantially similar to the terms on which holders of
Registrable Shares may include shares in such registration, including that (x)
if the underwriter (if any) managing the offering determines that, because of
marketing factors, all of the Registrable Shares requested to be registered may
not be included in the offering, then, prior to the inclusion of any Third Party
Shares in such offering, all Stockholders who have requested registration shall
participate in the registration and (y) in the event that any Stockholder is not
permitted to include all Registrable Shares requested by such Stockholder in the
offering, no Third Party Shares shall be included in such offering.

            10. Rule 144 Requirements. After the earliest of (a) the closing of
the sale of securities of the Company pursuant to a Registration Statement, (b)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (c) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:

                  (i) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;

                  (ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and

                  (iii) furnish to any holder of Registrable Shares upon request
(A) a written statement by the Company as to its compliance with the
requirements of said Rule 144(c), and the reporting requirements of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), (B) a copy of the most recent annual or quarterly
report of the Company, and (C) such other reports and documents of the Company
as such holder may reasonably request to avail itself of any similar rule or
regulation of the Commission allowing it to sell any such securities without
registration.

            11. Mergers, Etc. The Company shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Company under this Agreement, and for that
purpose references hereunder to "Registrable Shares" shall be deemed to be
references to the securities which the Purchasers would be entitled to receive
in exchange for Registrable

                                       16
<PAGE>
Shares under any such merger, consolidation or reorganization; provided,
however, that the provisions of this Article III, Section 11 shall not apply in
the event of any merger, consolidation or reorganization in which the Company is
not the surviving corporation if all holders are entitled to receive in exchange
for their Registrable Shares consideration consisting solely of (a) cash, (b)
securities of the acquiring corporation which may be immediately sold to the
public without limitations on volume or manner of sale and without registration
under the Securities Act (including pursuant to Rule 144 and/or Rule 145
promulgated thereunder), or (c) securities of the acquiring corporation which
the acquiring corporation has agreed to register within 90 days of completion of
the transaction for resale to the public pursuant to the Securities Act.

                                   ARTICLE IV

                              PARTICIPATION RIGHTS

            1. Participation Rights.

                  (a) Except as set forth in Section 3 of this Article IV
hereof, until the earlier of (i) the consummation of an Initial Public Offering
or (ii) such time as less than ten percent (10%) of the originally issued
Purchaser Registrable Shares (as adjusted for stock splits, stock dividends,
combinations, reclassifications and the like) remain outstanding, the Company
shall not issue, sell or exchange, agree to issue, sell or exchange, or reserve
or set aside for issuance, sale or exchange, (i) any shares of its Common Stock,
(ii) any other equity securities of the Company, including, without limitation,
shares of preferred stock or other convertible equity securities, (iii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any equity securities of the Company, or (iv) any debt securities convertible
into capital stock of the Company (collectively, the "Offered Securities"),
unless in each such case the Company shall have first complied with this
Agreement. The Company shall deliver to the Purchasers a written notice of any
proposed or intended issuance, sale or exchange of Offered Securities (the
"Offer"), which Offer shall (i) identify and describe the Offered Securities,
(ii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (iii) identify the persons or entities, if known, to which or
with which the Offered Securities are to be offered, issued, sold or exchanged,
and (iv) offer to issue and sell to or exchange with the Purchasers all of the
Offered Securities. The amount of Offered Securities to be offered by the
Company to each Purchaser for issuance, sale or exchange shall be determined as
follows: (A) each Purchaser may subscribe for an amount of the Offered
Securities in proportion to the amount that the Voting Shares then held by such
Purchaser bears to the Voting Shares then held by all Purchasers (the "Basic
Amount"), and (B) such additional amount of the Offered Securities as such
Purchaser indicates it will purchase or acquire should other Purchasers acquire
less than their respective Basic Amounts (the "Undersubscription Amount"). Each
Purchaser shall have the right, for a period of 30 days following delivery of
the Offer, to purchase or acquire, at the price and upon the other terms
specified in the Offer, the number or amount of Offered Securities described
above. To the extent that the consideration proposed to be paid for the Offered
Securities consists of property other than cash or a promissory note, the
consideration required to be paid by the Purchasers exercising their options
under this Article IV may consist of cash equal to the value of such property,
as determined in good faith by the Company and the Purchasers acquiring such
Offered Securities. The Offer by its term shall remain open and irrevocable for
such 30-day period.

                                       17
<PAGE>
                  (b) For purposes of calculating a Purchaser's ownership of
Voting Shares, all shares of convertible Preferred Stock of the Company shall be
deemed to have been converted into shares of Common Stock.

                  (c) To accept an Offer, in whole or in part, a Purchaser must
deliver a written notice to the Company prior to the end of the 30-day period of
the Offer, setting forth the portion of the Purchaser's Basic Amount that such
Purchaser elects to purchase and, if such Purchaser shall elect to purchase all
of its Basic Amount, the Undersubscription Amount (if any) that such holder
elects to purchase (the "Notice of Acceptance"). If the Basic Amounts subscribed
for by all Purchasers are less than the total Offered Securities, then each
holder who has set forth Undersubscription Amounts in its Notice of Acceptance
shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
all Undersubscription Amounts it has subscribed for; provided, however, that
should the Undersubscription Amounts subscribed for exceed the difference
between the Offered Securities and the Basic Amounts subscribed for (the
"Available Undersubscription Amount"), each Purchaser who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Purchaser bears to the total Undersubscription Amounts subscribed
for by all Purchasers, subject to rounding by the Board of Directors to the
extent it reasonably deems necessary.

                  (d) In the event that Notices of Acceptance are not given by
the Purchasers in respect of all the Offered Securities, the Company shall have
90 days from the expiration of the period set forth in Article IV, Section 1(a)
to issue, sell or exchange all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the Purchasers (the "Refused
Securities"), but only upon terms and conditions (including, without limitation,
unit prices and interest rates) which are not more favorable, in the aggregate,
to the acquiring person or persons or less favorable to the Company than those
set forth in the Offer.

                  (e) Upon the closing of the issuance, sale or exchange of all
or less than all the Refused Securities and the balance of the Offered
Securities, the Purchasers shall acquire from the Company, and the Company shall
issue to such Purchasers, the number or amount of Offered Securities specified
in the Notices of Acceptance, upon the terms and conditions specified in the
Offer (provided that such closing may be extended as to any Purchaser for
purposes of obtaining any necessary governmental approvals, if applicable). The
purchase by the Purchasers of any Offered Securities is subject in all cases to
the preparation, execution and delivery by the Company and such Purchasers of a
purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to such holders and their respective counsel.

                  (f) Any Offered Securities not acquired by the Purchasers or
other persons in accordance with Article IV, Section 1(d) may not be issued,
sold or exchanged until they are again offered to the Purchasers under the
procedures specified in this Article.

            2. Excluded Issuances. The rights of the Purchasers under this
Article IV shall not apply to:

                  (a) Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock;

                                       18
<PAGE>
                  (b) the issuance of any shares of Common Stock upon conversion
of outstanding shares of convertible preferred stock;

                  (c) up to Five Million Forty-Six Thousand Six Hundred
Sixty-Four (5,046,664) shares of Common Stock, or options exercisable therefor,
including options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company;

                  (d) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity;

                  (e) securities issued pursuant to the exercise of the SVB
Warrant; or

                  (f) except as set forth in Section 3 of this Article IV
hereof, shares of Common Stock sold by the Company in an Initial Public
Offering.

            3. Participation Right in an Initial Public Offering. In connection
with the Company's Initial Public Offering, and subject to any applicable
securities laws, the Company shall use its best efforts to cause the managing
underwriter of such Initial Public Offering to offer to each Series C Purchaser
the right to purchase at least that number of shares of capital stock of the
Company determined by multiplying (a) each Series C Purchaser's then current
Pro-Rata Share by (b) the number of IPO Shares, at the price per share offered
to the public and as reflected on the final prospectus of the Company. A Series
C Purchaser shall have the right to apportion its participation in the Initial
Public Offering pursuant to this Section 3 of Article IV among any of its
partners, members, or affiliates. Notwithstanding the foregoing in this Section
3 of Article IV, the managing underwriter, in its sole discretion, may modify or
limit the Series C Purchaser's participation right provided herein by providing
written notice to such Series C Purchaser setting forth such underwriter's
reasons for such limitation or modification, including that such limitation or
modification is necessary, because of marketing factors, for the success of the
Initial Public Offering.

                                    ARTICLE V

             FOUNDERS' RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

            1. Restrictions on Transfer.

                  (a) Any sale or other disposition of any Voting Shares by a
Founder, other than according to the terms of this Agreement shall be void and
transfer no right, title or interest in or to any of such Voting Shares to the
purported transferee.

                  (b) Each Founder agrees to present the certificates
representing the Voting Shares presently held or hereafter acquired by him to
the Secretary of the Company and cause the Secretary to stamp on the certificate
in a prominent manner the following legend:

                                       19
<PAGE>
                  "The sale or other disposition of any of the shares
                  represented by this certificate is restricted by a Fifth
                  Amended and Restated Investors' Rights Agreement, as the same
                  may be amended or restated from time to time, by and among
                  certain of the shareholders of this corporation and this
                  corporation (the "Agreement"). A copy of the Agreement is
                  available for inspection during normal business hours at the
                  office of the Secretary of the corporation."

            2. Transfers Not Subject to Restrictions.

                  (a) Subject to Section 2 of Article VI hereof, any Founder may
sell, assign or transfer Voting Shares to (i) his spouse, children (natural or
adopted), siblings or parents, or to a trust established for the benefit of his
spouse, children (natural or adopted), siblings, parents or himself, or dispose
of them under his will, or (ii) the other Founders, without compliance with
Sections 3 and 5 of this Article V; provided that the transferee provides the
Company and the Purchasers with a written agreement to be bound hereby to the
same extent as the transferring Founder.

                  (b) The rights of the holders of the Series A Preferred Stock,
Series B Preferred Stock, the Series C Preferred Stock, or the Series D
Preferred Stock under Section 5 of this Article V shall not apply to any pledge
of Voting Shares by a Founder which creates a mere security interest, provided
the pledgee provides the Company with a written agreement to be bound hereby to
the same extent as the pledging Founder.

            3. Offer of Sale; Notice of Proposed Sale. If any Founder desires to
sell, transfer or otherwise dispose of any of his Voting Shares, or of any
interest in such Voting Shares, whether voluntarily or by operation of law, in
any transaction other than pursuant to Section 2 of this Article V, such Founder
(the "Selling Founder") shall first deliver written notice of his desire to do
so (the "Notice") to the Company and the Purchasers, in the manner prescribed in
Section 6 of Article VI hereof. The Notice must specify: (i) the name and
address of the party to which the Selling Founder proposes to sell or otherwise
dispose of the Voting Shares or an interest in the Voting Shares (the
"Offeror"), (ii) the number of Voting Shares the Selling Founder proposes to
sell or otherwise dispose of (the "Offered Shares"), (iii) the consideration per
Voting Share to be delivered to the Selling Founder for the proposed sale,
transfer or disposition, and (iv) all other material terms and conditions of the
proposed transaction.

            4. Company's Option to Purchase.

                  (a) Subject to Section 6(a) of this Article V, the Company
shall have the first option to purchase all or any part of the Offered Shares
for the consideration per share and on the terms and conditions specified in the
Notice. The Company shall be entitled to exercise such option, within 15 days
following delivery of such Notice.

                  (b) In the event the Company does not exercise its option
within such 15 day period with respect to all of the Offered Shares, the
Secretary of the Company shall, by the last day of such period, give written
notice of that fact to the Purchasers (the "Purchasers Notice").

                                       20
<PAGE>
The Purchasers Notice shall specify the number of Offered Shares not purchased
by the Company (the "Remaining Shares").

                  (c) In the event the Company duly exercises its option to
purchase all or part of the Offered Shares, the closing of such purchase shall
take place at the offices of the Company on the later of (i) the date five days
after the expiration of such 15 day period or (ii) the date that the Purchasers
consummate their purchase of Offered Shares under Section 5(b) of this Article
V.

                  (d) To the extent that the consideration proposed to be paid
by the Offeror for the Offered Shares consists of property other than cash or a
promissory note, the consideration required to be paid by the Company and/or the
Purchasers exercising their options under Sections 4 and 5 of this Article V may
consist of cash equal to the value of such property, as determined in good faith
by agreement of the Selling Founder and the Company and/or the Purchasers
acquiring such Offered Shares.

                  (e) Notwithstanding anything to the contrary herein, neither
the Company nor any Purchasers shall have any right to purchase any of the
Offered Shares hereunder unless the Company and/or such Purchasers exercise
their option to purchase all of the Offered Shares.

            5. Purchasers' Option to Purchase.

                  (a) Subject to Section 6(a) of this Article V, each Purchaser
shall have an option, exercisable for a period of 15 days from the date of
delivery of the Purchaser's Notice, to purchase his or its pro rata share
(subject to adjustment pursuant to Section 5(b)), according to the number of
Voting Shares held by such Purchaser, of the Remaining Shares for the
consideration per share and on the terms and conditions set forth in the Notice.
Such option shall be exercised by delivery of written notice to the Secretary of
the Company. In addition to or alternatively, each Purchaser may within the same
15-day period, notify the Secretary of the Company of his or its desire to
participate in the sale of Voting Shares held by him or it on the terms set
forth in the Notice, and the number of Voting Shares he or it wishes to sell
should the Company and/or the Purchasers not exercise their option to purchase
all of the Offered Shares.

                  (b) In the event options to purchase have been exercised by
the Purchasers with respect to some but not all of the Remaining Shares, those
Purchasers who have exercised their options within the 15-day period specified
in Section 5(a) shall have an additional option, for a period of five days next
succeeding the expiration of such 15-day period, to purchase all or any part of
the balance of such Remaining Shares on the terms and conditions set forth in
the Notice, which option shall be exercised by the delivery of written notice to
the Secretary of the Company. In the event there are two or more such Purchasers
that choose to exercise the last-mentioned option for a total number of Voting
Shares in excess of the number available, the Remaining Shares available for
each such Purchaser's option shall be allocated to such Purchaser pro rata based
on the number of Voting Shares held by the Purchaser so electing.

                  (c) If the option to purchase the Remaining Shares is
exercised in full by the Purchasers, the closing of the purchase of the
Remaining Shares shall take place at the

                                       21
<PAGE>
offices of the Company no later five days after the exercise of such purchase
option by the Purchaser or Purchasers (provided that such closing may be
extended as to any Purchaser for purposes of obtaining any necessary
governmental approvals).

            6. Failure to Fully Exercise Options; Co-Sale.

                  (a) If the Company and the Purchasers do not exercise their
options to purchase all of the Offered Shares within the periods described in
this Agreement (the "Option Period"), then all options of the Company and the
Purchasers to purchase the Offered Shares, whether exercised or not, shall
terminate with respect to that sale only, but each Purchaser which has, pursuant
to Section 5 of this Article V, expressed a desire to sell Voting Shares in the
transaction (a "Participating Purchaser"), shall be entitled to do so pursuant
to this Section 6. The Secretary of the Company shall promptly, on expiration of
the Option Period, notify the Selling Founder of the aggregate number of Voting
Shares the Participating Purchasers wish to sell. The Selling Founder shall use
his best efforts to interest the Offeror in purchasing, in addition to the
Offered Shares, the Voting Shares the Participating Purchasers wish to sell. If
the Offeror does not wish to purchase all of the Voting Shares made available by
the Selling Founder and the Participating Purchasers, then each Participating
Purchaser and the Selling Founder shall be entitled to sell, at the price and on
the terms and conditions set forth in the Notice, a portion of the Voting Shares
being sold to the Offeror, in the same proportion as such Selling Founder or
Participating Purchaser's ownership of Voting Shares bears to the aggregate
number of Voting Shares held by the Selling Founder and the Participating
Purchasers. Any Participating Purchaser may at its option convert the portion of
its Preferred Stock requested to be included in the proposed sale by the Selling
Founder into Common Stock. The Company and the Selling Founder agree to make any
such conversion concurrent with the actual transfer of such shares to the
proposed transferee. The transaction contemplated by the Notice shall be
consummated not later than 60 days after the expiration of the Option Period.

                  (b) If the Participating Purchasers do not elect to sell the
full number of Voting Shares which they are entitled to sell pursuant to Section
6(a), the Selling Founder shall be entitled to sell to the Offeror, according to
the terms set forth in the Notice, that number of his own Voting Shares which
equals the difference between the number of Voting Shares desired to be
purchased by the Offeror and the number of Voting Shares the Participating
Purchasers wish to sell. If the Selling Founder wishes to sell, transfer or
otherwise dispose of any such Voting Shares at a price per Voting Share which
differs from that set forth in the Notice, upon terms different from those
previously offered to the Purchasers, or more than 60 days after the expiration
of the Option Period, as a condition precedent to such transaction, such Voting
Shares must first be offered to the Purchasers on the same terms and procedures
and time periods set forth above in Sections 4 and 5 and must again be subject
to the co-sale rights in this Section 6.

                  (c) The proceeds of any sale made by the Selling Founder
without compliance with the provisions of this Section 6 shall be deemed to be
held in constructive trust in such amount as would have been due the
Participating Purchasers if the Selling Founder had complied with this
Agreement.

            7. Other Rights Not Affected. Notwithstanding any provision in this
Article V to the contrary, nothing in this Article V shall limit any right of
the Company to repurchase any

                                       22
<PAGE>
shares from a Founder or employee which have not yet vested pursuant to the
terms of any other agreement between the Company and such Founder or employee.

                                   ARTICLE VI

                                     GENERAL

            1. Termination. Article II of this Agreement shall terminate in its
entirety on the earlier of (a) the closing of an Initial Public Offering or (b)
the tenth anniversary of the date of this Agreement. All of the Company's
obligations to register Registrable Shares under Article III of this Agreement
shall terminate on the later of (a) the fifth anniversary of an Initial Public
Offering or (b) the tenth anniversary of the date of this Agreement. Article IV
and Article V of this Agreement shall terminate in their entirety upon the
earliest of (a) a Liquidation Event (as defined in the Company's Charter), (b)
the closing of an Initial Public Offering, or (c) such time as less than ten
percent (10%) of the originally issued Purchaser Registrable Shares (as adjusted
for stock splits, stock dividends, combinations, reclassifications and the like)
remain outstanding.

            2. Transfer of Rights. This Agreement, and the rights and
obligations of the Purchasers hereunder, may be assigned by a Purchaser to any
person or entity to which Shares are transferred by the Purchaser, and such
transferee shall be deemed a "Purchaser" and a "Stockholder" for purposes of
this Agreement; provided that the transferee provides written notice of such
assignment to the Company and agrees to be bound by the terms hereof.
Notwithstanding the foregoing sentence, the rights and obligations of each
Purchaser under Article III of this Agreement may only be assigned by such
Purchaser to any person or entity (i) to which at least 100,000 Shares, or, in
the case of a transfer by Silicon (on one occasion only), 34,330 Shares (in each
case, as adjusted for stock splits, stock dividends, combinations,
reclassifications and the like) are transferred by such Purchaser or (ii) which
is a partner, stockholder or affiliate of such Purchaser or another Purchaser.
No Purchaser may assign any of its rights or obligations hereunder to any person
or entity which is determined in good faith by the Board of Directors to be a
"competitor" of the Company. The Founders may not assign any rights under this
Agreement except to or for the benefit of any spouse, child or grandchild, or to
a trust for their benefit, provided that such rights shall remain subject to
this Agreement (including without limitation the restrictions on transfer set
forth in this Article VI, Section 2) and such permitted assignee shall, as a
condition to such assignment, deliver to the Company a written instrument
confirming that such assignee shall be bound by all of the terms and conditions
of this Agreement.

            3. Severability. The provisions of this Agreement are severable, so
that the invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other term or provision of this
Agreement, which shall remain in full force and effect.

            4. Specific Performance. In addition to any and all other remedies
that may be available at law in the event of any breach of this Agreement, the
Stockholders shall be entitled to specific performance of the agreements and
obligations of the Company and the Stockholders hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction.

                                       23
<PAGE>
            5. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).

            6. Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

            7. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:

                  If to the Company:

                  Phase Forward Incorporated
                  1440 Main Street
                  Waltham, MA  02451
                  Attention: President and General Counsel

or at such other address or addresses as may have been furnished in writing by
the Company to the Purchasers.

                  With a copy to:

                  Testa, Hurwitz & Thibeault, LLP
                  125 High Street
                  Boston, MA 02110
                  Attn: William J. Schnoor, Jr., Esq.

                  If to a Series A Purchaser:

                  at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series A Purchaser.

                  With a copy to:

                  Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109
                  Attention:  Paul Rogers, Esq.

                                       24
<PAGE>
                  If to a Series B Purchaser:

                  at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series B Purchaser.

                  With copies to:

                  Gunderson Dettmer Stough Villeneuve Franklin and
                  Hachigian, LLP
                  155 Constitution Drive
                  Menlo Park, CA 94025
                  Attention: Scott C. Dettmer, Esq.

                  Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109
                  Attention: Paul Rogers, Esq.

                  If to a Series C Purchaser:

                  at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series C Purchaser.

                  With copies to:

                  Testa, Hurwitz & Thibeault, LLP
                  125 High Street
                  Boston, MA  02110
                  Attention: Lawrence S. Wittenberg, Esq.

                  Hale and Dorr LLP
                  60 State Street
                  Boston, MA 02109
                  Attention: Paul Rogers, Esq.

                  Weil, Gotshal & Manges LLP
                  100 Crescent Court, Suite 1300
                  Dallas, TX  75201
                  Attention:  R. Jay Tabor

                  If to a Series D Purchaser:

                  at his or its address set forth beneath his or its signature
to this Agreement or at such other address or addresses as may have been
furnished to the Company in writing by the Series D Purchaser.

                  With copies to:

                                       25
<PAGE>
                  Hogan & Hartson L.L.P.
                  111 South Calvert Street
                  Baltimore, Maryland  21202
                  Attention:  Thene Martin, Esq.

                  If to IBM:

                  International Business Machines Corporation
                  MS 217
                  New Orchard Road
                  Armonk, NY 10504
                  Attention: John W. Greene

                  If to a Founder:

                  at each such Founder's respective address set forth beneath
his signature on this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing by such Founder. Notices provided
in accordance with this Article VI, Section 6 shall be deemed delivered upon
personal delivery or two business days after deposit in the mail.

            8. (a) Waiver of Participation Rights. In accordance with Section
8(b) of Article VI of the Prior Agreement, the Prior Agreement is hereby amended
to provide that any rights any party to the Prior Agreement may have, including
prior notice rights, under, and any failure of the Company to comply with, the
requirements of Article IV, Section 1 of the Prior Agreement with respect to the
sale and issuance of the Series D Preferred Stock pursuant to the New Purchase
Agreement, are hereby waived.

                   (b) Complete Agreement; Amendments. By such party's execution
below, each party to the Prior Agreement hereby agrees to amend and restate the
Prior Agreement in accordance with Article VI Section 8 thereof. This Agreement
constitutes the full and complete agreement of the parties hereto with respect
to the subject matter hereof, provided, however, that the rights of Purchasers
or Founders that became parties to the Prior Agreement in connection with
permitted transfers thereunder shall be subject to the restrictions contained in
the counterpart signature pages executed in connection therewith. No amendment,
waiver, modification or termination of any provision of this Agreement shall be
valid unless in writing and signed by the Company and the holders of sixty-six
and two-thirds percent (66 2/3%) of the Voting Shares held by the Purchasers and
holders of twenty-five percent (25%) of the Voting Shares held by the Founders,
provided such Founders are employed with the Company; provided, that (i) Article
II, Section 1(a) governing the designation of a member of the Board of Directors
by the Founders may be amended or waived only if the Founders (by action of the
holders of a majority of the Voting Shares held by the Founders) concur in such
amendment or waiver; and (ii) Article III may be amended or waived (A) by the
Company and Purchasers holding 66 2/3% of the Registrable Shares and no consent
of the Founders shall be required to amend or waive such Article; and (B) with
the consent of less than all of the Purchasers only in a manner which affects
all Registrable Shares (to the extent affected) in the same fashion. No waivers
of or exceptions to any term,

                                       26
<PAGE>
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision. Any amendment or waiver effected in accordance with this
paragraph 8 of Article VI shall be binding upon each holder of any Registrable
Shares, each future holder of all such Registrable Shares, and the Company,
whether or not such holder consented, agreed to, or signed such amendment or
waiver.

            9. Pronouns. Whenever the content may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.

            10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one Agreement binding on all the parties hereto.

            11. Captions. Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.

            12. Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

            13. Stock Split. All references to numbers of shares in this
Agreement shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring after
the date of this Agreement.

                             Signature Pages Follow

                                       27
<PAGE>
      IN WITNESS WHEREOF, this Fifth Amended and Restated Investors' Rights
Agreement has been executed as of the date first written above.

                                    COMPANY:

                                    PHASE FORWARD INCORPORATED

                                    By:
                                       ----------------------------------------

                                    Title:
                                          -------------------------------------

                                    Address: 1440 Main Street
                                             Waltham, MA  02451
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    FOUNDERS:

                                    ------------------------------------------
                                    PAUL BLEICHER

                                    Address: 174 Mt. Vernon Street
                                             Newton, MA 02465

                                    PAUL A BLEICHER 1999 IRREVOCABLE TRUST

                                    By:
                                        --------------------------------------
                                          Name:  Elaine Greenstein, Trustee
                                          Address:

                                    ------------------------------------------
                                    RICHARD DALE

                                    Address: 83 Dalton Road
                                             Newton, MA 02459

                                    Harverd-Dale Children 1999 Irrevocable
                                    Trust, dated July 8, 1999

                                    By:
                                        --------------------------------------
                                          Name: Dale Ann Kaiser, Trustee
                                          Address: 199 Wells Avenue, Suite 201
                                                   Newton, MA  02459

                                    ------------------------------------------
                                    DORIT HARVERD

                                    Address: 83 Dalton Road
                                             Newton, MA  02459
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ------------------------------------------
                                    ANDREW DALE

                                    Address: 83 Dalton Road
                                             Newton, MA  02459

                                    ------------------------------------------
                                    JEFFREY KLOFFT
                                    Address: 15 Ironworks Road
                                             Sudbury, MA 01776

                                    ------------------------------------------
                                    SHIV TASKER

                                    Address: 336 Boston Post Road
                                             Weston, MA  02193

                                    The Tasker Children 1999 Irrevocable
                                      Trust

                                    By:
                                        --------------------------------------
                                          Name: Rushikesh Tasker, Trustee
                                          Address:
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ------------------------------------------
                                    MONISHA TASKER

                                    Address: 336 Boston Post Road
                                             Weston, MA  02193

                                    ------------------------------------------
                                    G. GORDON M. LARGE

                                    Address: 238 Winged Foot Drive
                                             Blue Bell, PA 19422

                                    ------------------------------------------
                                    GILLIAN E. LEWIN*

                                    Address: 28 Fitzalan Road
                                             Finchley, London N3 3PD
                                             United Kingdom

*The undersigned acknowledges that she will not receive rights under this
Agreement and hereby agrees to be bound by all the provisions of this Agreement.
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    PURCHASERS:

                                    Schroder Ventures International Life
                                    Sciences Fund II LP1

                                    By    Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:  N. Lawson, G. Carr
                                          Title: Directors & Vice Presidents

                                          Address:  22 Church Street
                                                   Hamilton HM 11
                                                   Bermuda

                                    Schroder Ventures International Life
                                    Sciences Fund II LP2

                                    By    Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:  N. Lawson, G. Carr
                                          Title: Directors & Vice Presidents

                                          Address:  22 Church Street
                                                   Hamilton HM 11
                                                   Bermuda
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    Schroder Ventures International Life
                                    Sciences Fund II LP3

                                    By    Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:  N. Lawson, G. Carr
                                          Title: Directors & Vice Presidents

                                          Address: 22 Church Street
                                                    Hamilton HM 11
                                                   Bermuda

                                    Schroder Ventures International Life
                                    Sciences FUND II STRATEGIC PARTNERS L.P.

                                    By    Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:  N. Lawson, G. Carr
                                          Title: Directors & Vice Presidents

                                          Address:  22 Church Street
                                                    Hamilton HM 11
                                                    Bermuda
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    SCHRODER VENTURES INTERNATONAL LIFE
                                    SCIENCES FUND II GROUP CO-INVESTMENT
                                     SCHEME

                                    By    SITCO Nominees Ltd. - VC 01903,
                                          as nominee

                                    By:
                                        --------------------------------------
                                          Name:  N. Lawson, G. Carr
                                          Title: Directors

                                          Address:  22 Church Street
                                                   Hamilton HM 11
                                                   Bermuda

                                    SCHRODER VENTURES INVESTMENTS LIMITED

                                    By    SV (Nominees) Ltd.,
                                          as nominee

                                    By:
                                        --------------------------------------
                                          Name:  L.S. McNairn
                                          Title: Director

                                          Address:  22 Church Street
                                           Hamilton HM11
                                                    Bermuda
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    HLM/UH FUND, L.P.

                                    By:   HLM UH Associates, LLC,
                                          its General Partner

                                    By:
                                        --------------------------------------
                                          Name: Thomas F. O'Donnell, III
                                          Title:

                                          Address: 222 Berkeley Street
                                                   Boston, MA 02116

                                    PACIFIC VENTURE GROUP II, L.P.

                                       By
                                          ------------------------------------
                                          its General Partner

                                    By:
                                        --------------------------------------
                                          Name:  Annette Bianchi
                                          Title:  Managing Director

                                          Address: 303 Twin Dolphin Drive
                                                   Suite  600
                                                   Redwood Shores, CA 94065

                                    PVG ASSOCIATES II, L.P.

                                    By:
                                       ---------------------------------------
                                          its General Partner

                                    By:______________________________
                                       Name:  Annette Bianchi
                                         Title:  Managing Director

                                    Address:  303 Twin Dolphin Drive
                                              Suite  600
                                              Redwood Shores, CA 94065
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    BioVentures Investors Limited
                                    Partnership

                                    By    BioVentures Investors, LLC,
                                          its General Partner

                                    By:
                                        --------------------------------------
                                          Name: Marc E. Goldberg
                                          Title: Managing Director

                                          Address: 1 Innovation Drive
                                                   Worcester, MA 01065

                                    DLJ CAPITAL CORP.

                                    By:
                                        --------------------------------------
                                         Name: Ronald M. Hunt
                                             Title:  Director

                                    Address: 277 Park Avenue
                                             New York, NY  10172

                                    DLJ ESC II, L.P.

                                    By: DLJ LBO Plans Management Corporation,
                                           Its General Partner

                                    By:
                                        --------------------------------------
                                        Name:  Ronald M. Hunt
                                        Title: Attorney in fact

                                    Address: 277 Park Avenue

                                             New York, NY  10172
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    SPROUT CAPITAL VIII, L.P.

                                    By: DLJ Capital Corp.
                                           Its Managing General Partner

                                    By:
                                        --------------------------------------
                                        Name:  Ronald M. Hunt
                                        Title: Director

                                    Address: 277 Park Avenue

                                             New York, NY  10172

                                    SPROUT VENTURE CAPITAL, L.P.

                                    By: DLJ Capital Corp.
                                        Its General Partner

                                    By:
                                        --------------------------------------
                                        Name:  Ronald M. Hunt
                                        Title: Director

                                    Address: 277 Park Avenue

                                             New York, NY  10172

                                    THE SPROUT CEO FUND, L.P.

                                    By: DLJ Capital Corp., Its General
                                     Partner

                                    By:
                                        --------------------------------------
                                        Name:  Ronald M. Hunt
                                        Title: Director

                                    Address: 277 Park Avenue

                                             New York, NY  10172
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    NORTH BRIDGE VENTURE PARTNERS II, L.P.

                                    By:  North Bridge Venture Management
                                         II, L.P.,
                                         its general partner

                                    By:
                                         -------------------------------------
                                         Name:  Richard A. D'Amore
                                         Title: General Partner

                                    Address: 950 Winter Street, Suite 4600
                                             Waltham, MA  02451

                                    NORTH BRIDGE VENTURE PARTNERS III, L.P.

                                    By:  North Bridge Venture Management
                                         III, L.P.,
                                            its general partner

                                         By:
                                             ---------------------------------
                                             Name:  Richard A. D'Amore
                                             Title:  General Partner

                                    Address: 950 Winter Street,
                                             Suite 4600
                                             Waltham, MA  02451

                                    ------------------------------------------
                                    GUSTAV A. CHRISTENSEN

                                    Address: 3 Idylwilde Road
                                             Lexington, MA  02173

                                    ------------------------------------------
                                    GABRIEL SCHMERGEL

                                    Address: 15 Lowell Road
                                             Wellesley, MA 02181

                                    ------------------------------------------
                                    RONALD A. AGEL

                                    Address: 279 Marlborough Street
                                             Boston, MA 02116
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ------------------------------------------
                                    MIRZA MEHDI

                                    Address: 152 Newton Street
                                             Weston, MA 02193

                                    ------------------------------------------
                                    ROBERT J. CARPENTER

                                    Address: 9 Lowell Road
                                             Wellesley, MA 02181

                                    ------------------------------------------
                                    STEPHEN J. SCHAUBERT

                                    Address: 37 Bradford Road
                                             Weston, MA 02193

                                    ------------------------------------------
                                    SHIV TASKER

                                    Address: 336 Boston Post Road
                                             Weston, MA  02193

                                    ------------------------------------------
                                    NICHOLAS STAMOS

                                    Address: 22 Jeanette Avenue
                                             Belmont, MA  02178

                                    ------------------------------------------
                                    GEORGE KERNS

                                    Address: 8701 Overlook
                                             McLean, VA  22102
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ------------------------------------------
                                    G. GORDON M. LARGE

                                    Address: 238 Winged Foot Drive
                                             Blue Bell, PA 19422

                                    THOMAS WEISEL capital partners, l.p.

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    Address: One Montgomery Street, Suite 3700
                                             San Francisco, CA  94104

                                    THOMAS WEISEL capital partners
                                    EMPLOYEE FUND, L.P.

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                      Address:  One Montgomery Street,
                                                Suite 3700
                                                San Francisco, CA 94101

                                    TWP CEO FOUNDERS CIRCLE (QP), L.P.

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                      Address:  One Montgomery Street,
                                                Suite 3700
                                                San Francisco, CA 94104
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    TWP CEO FOUNDERS CIRCLE (AI), L.P.

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                       Address:  One Montgomery Street,
                                                 Suite 3700
                                                 San Francisco, CA  94104

                                    TWP 2000 CO-INVESTMENT FUND, L.P.

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                    Address:  One Montgomery Street, Suite 3700
                                              San Francisco, CA 94104

                                    THOMAS WEISEL capital partners (DUTCH), L.P.

                                    By    Thomas Weisel Capital Partners LLC
                                          (Dutch), its general partner

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                       Address:  One Montgomery Street,
                                                 Suite 3700
                                                 San Francisco, CA 94104
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    THOMAS WEISEL capital partners
                                    (DUTCH II), L.P.

                                    By    Thomas Weisel Capital Partners LLC
                                          (Dutch), its general partner

                                    By    Thomas Weisel Capital Partners LLC,
                                          its general partner

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:

                                      Address:  One Montgomery Street,
                                                Suite 3700
                                                San Francisco, CA 94104

                                    SILICON VALLEY BANK

                                    By:
                                        --------------------------------------
                                        Name:
                                        Title:
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ATLAS VENTURE FUND III, L.P.

                                    By:      Atlas Venture Associates III, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates III, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116

                                    ATLAS VENTURE ENTREPRENEURS' FUND III, L.P.

                                    By:      Atlas Venture Associates III, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates III, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116

                                    ATLAS VENTURE FUND V, L.P.

                                    By:      Atlas Venture Associates V, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates V, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116
<PAGE>
                                    ATLAS VENTURE PARALLEL FUND V-A, C.V.

                                    By:      Atlas Venture Associates V, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates V, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116

                                    ATLAS VENTURE PARALLEL FUND V-B, C.V.

                                    By:      Atlas Venture Associates V, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates V, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.

                                    By:      Atlas Venture Associates V, L.P.
                                             its general partner
                                    By:      Atlas Venture Associates V, Inc.
                                             its general partner

                                    By:
                                        --------------------------------------
                                        Name:  Jeanne Larkin Henry
                                        Title: Vice President

                                    Address: 222 Berkeley Street, Suite 1950
                                             Boston, MA 02116

                                    ------------------------------------------
                                    RICHARD ALEXANDER**

                                    Address:
                                               -------------------------------

                                               -------------------------------

                                    ------------------------------------------
                                    MICHAEL STAMOS**

                                    Address:
                                               -------------------------------

                                               -------------------------------

                                    ------------------------------------------
                                    ANGELO STAMOS**

                                    Address:
                                               -------------------------------

                                               -------------------------------

**The undersigned acknowledges that he will not receive rights under Article
III, "Registration Rights," of this Agreement and hereby agrees to be bound by
all provisions of this Agreement.
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ABS CAPITAL PARTNERS, L.P.

                                    By: ABS Partners, L.P.
                                    its General Partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address: 400 E. Pratt Street
                                                Baltimore, MD 21202

                                    ABS CAPITAL PARTNERS II, L.P.

                                    By:  ABS Partners II, LLC

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:  400 E. Pratt Street
                                                 Baltimore, MD 21202

                                    ST. PAUL FIRE AND MARINE
                                    INSURANCE COMPANY

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ST. PAUL VENTURE CAPITAL IV, LLC

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    ST. PAUL VENTURE CAPITAL V, LLC

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    ST. PAUL VENTURE CAPITAL VI, LLC
                                    By:  SPVC Management VI, LLC
                                    Its: Managing Member

                                    --------------------------------
                                    Its:  Managing Director

                                    Address: 10400 Viking Drive Suite 500
                                            Eden Prairie, MN 55344

                                    HOUSATONIC EQUITY INVESTORS SBIC, L.P.

                                    By:  Housatonic Equity Partners SBIC,
                                    LLC, its general partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address: 88 Kearney Street Suite 1610
                                                San Francisco, CA 94108
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ONSET ENTERPRISE ASSOCIATES, LP

                                    By:  OEA Management, L.P.
                                          its general partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                          Address:

                                    ONSET ENTERPRISE ASSOCIATES II, LP

                                    By:  OEA II Management, L.P.
                                          its general partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    ONSET VENTURES SERVICES CORPORATION

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    SALIX VENTURES, L.P.

                                    By:  Salix Partners LLC, its general
                                     partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address: 30 Burton Hills Boulevard
                                                Suite 370
                                                Nashville, TN 37215
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    NEW ENTERPRISE ASSOCIATES VI, LP

                                    By:  NEA Partners VI, Limited Partnership
                                         its general partner

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address: 1119 St. Paul Street
                                                Baltimore, MD  21202

                                    ------------------------------------------
                                    Theodore H. Ashford

                                       Address:

                                    FSC CORPORATION, INC.

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    ------------------------------------------
                                    Philip J. Goward

                                       Address:
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    PAUL L. GOMORY JR. TRUST

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    PHARMASOFT, INC.

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    ------------------------------------------
                                    Michael Lack

                                       Address:

                                    ------------------------------------------
                                    Paul L. McCullough

                                       Address:

                                    ------------------------------------------
                                    Lisa A. Mitchell

                                       Address:

                                    ------------------------------------------
                                    Theodore Ridgway

                                       Address:
<PAGE>
             Signature page to the Investors' Rights Agreement

                                    ------------------------------------------
                                    Thomas S. Volpe

                                       Address:

                                    ELI LILLY AND COMPANY

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                       Address:

                                    INTERNATIONAL BUSINESS MACHINES CORPORATION

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                    Address:

<PAGE>

                               AMENDMENT NO. 1 TO

             FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

      This Amendment No. 1 (the "Amendment") to that certain Fifth Amended and
Restated Investors' Rights Agreement, dated December 27, 2001 (the "Agreement"),
among Phase Forward Incorporated, a Delaware corporation (the "Corporation"),
and the Founders and Purchasers as named therein, is made as of this 9th day of
October, 2002 by and among the Corporation and the undersigned Founders and
Purchasers.

      WHEREAS, the Corporation deems it desirable to increase the number of
shares of Common Stock that can be granted as stock options, pursuant to the
Corporation's Amended and Restated 1997 Stock Option Plan, to attract and retain
employees, directors and consultants for the Corporation; and

      WHEREAS, the undersigned Purchasers and Founders desire to facilitate the
Corporation's ability to attract and retain employees, directors and
consultants.

      NOW, THEREFORE, for good and valuable consideration, the validity and
sufficiency of which are hereby acknowledged, Article IV, Section 2(c) of the
Agreement is amended to read in its entirety as follows:

      "(c) up to Seven Million Forty-Six Thousand Six Hundred Sixty-Four
(7,046,664) shares of Common Stock, or options exercisable therefor, including
options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company."

      Except as provided for in this Amendment, all other terms and conditions
of the Agreement shall continue to be in full force and effect. The Agreement,
as amended by this Amendment, constitutes the entire agreement between the
parties with respect to the subject matter contained herein and therein.

      This Amendment may be executed in one or more counterparts, each of which
shall be deemed to constitute an original, but all of which together shall
constitute one (1) instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

      IN WITNESS WHEREOF, this Amendment is executed as of the day and year
first above written.

                                          COMPANY:

                                          PHASE FORWARD INCORPORATED

                                          By:
                                               --------------------------------
                                               Paul Bleicher, Chairman and
                                               Chief Executive Officer
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                       FOUNDERS:

                                       ---------------------------------------
                                       PAUL BLEICHER
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    PURCHASERS:

                                    SCHRODER VENTURES INTERNATIONAL LIFE
                                    SCIENCES FUND II LP1

                                    By:   Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    Schroder Ventures International Life
                                    Sciences Fund II LP2

                                    By:   Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    Schroder Ventures International Life
                                    Sciences Fund II LP3

                                    By:   Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    Schroder Ventures International Life
                                    Sciences FUND II STRATEGIC PARTNERS L.P.

                                    By:   Schroder Venture Managers Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    SCHRODER VENTURES INTERNATIONAL LIFE
                                    SCIENCES FUND II GROUP CO-INVESTMENT
                                    SCHEME

                                    By:   SITCO Nominees Ltd. - VC 01903,
                                          as nominee

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    SCHRODER VENTURES INVESTMENTS LIMITED

                                    By:   SV (Nominees) Ltd.,
                                          as nominee

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    PACIFIC VENTURE GROUP II, L.P.

                                    By:
                                       ---------------------------------------
                                       as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    PVG ASSOCIATES ii, L.P.

                                    By:
                                       ---------------------------------------
                                       as General Partner

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    DLJ CAPITAL CORP.

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:

                                    DLJ ESC II, L.P.

                                    By: DLJ LBO Plans Management Corporation,
                                           as General Manager

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:

                                    SPROUT CAPITAL VIII, L.P.

                                    By: DLJ Capital Corp.,
                                        as Managing General Partner

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:

                                    SPROUT VENTURE CAPITAL, L.P.

                                    By: DLJ Capital Corp.,
                                        as General Partner

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    THE SPROUT CEO FUND, L.P.

                                    By: DLJ Capital Corp., as General Partner

                                    By:
                                       ---------------------------------------
                                         Name:
                                         Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    NORTH BRIDGE VENTURE PARTNERS II, L.P.

                                    By:  North Bridge Venture Management
                                         II, L.P.,
                                         as General Partner

                                    By:
                                         -------------------------------------
                                         General Partner

                                    NORTH BRIDGE VENTURE PARTNERS III, L.P.

                                    By:  North Bridge Venture Management
                                         III, L.P.,
                                         as General Partner

                                       By:
                                          -------------------------------------
                                          General Partner
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    THOMAS WEISEL CAPITAL PARTNERS L.P.

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    THOMAS WEISEL CAPITAL PARTNERS
                                    EMPLOYEE FUND, L.P.

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    TWP CEO FOUNDERS CIRCLE (QP), L.P.

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    TWP CEO FOUNDERS CIRCLE (AI), L.P.

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    TWP 2000 CO-INVESTMENT FUND, L.P.

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    THOMAS WEISEL capital partners (DUTCH), L.P.

                                    By:   Thomas Weisel Capital Partners LLC
                                          (Dutch), as General Partner

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    THOMAS WEISEL CAPITAL PARTNERS
                                    (DUTCH II), L.P.

                                    By:   Thomas Weisel Capital Partners LLC
                                          (Dutch), as General Partner

                                    By:   Thomas Weisel Capital Partners LLC,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    ATLAS VENTURE FUND III, L.P.

                                    By:   Atlas Venture Associates III, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates III, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    ATLAS VENTURE ENTREPRENEURS' FUND III, L.P.

                                    By:   Atlas Venture Associates III, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates III, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    ATLAS VENTURE FUND V, L.P.

                                    By:   Atlas Venture Associates V, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates V, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    ATLAS VENTURE PARALLEL FUND V-A, C.V.

                                    By:   Atlas Venture Associates V, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates V, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    ATLAS VENTURE PARALLEL FUND V-B, C.V.

                                    By:   Atlas Venture Associates V, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates V, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.

                                    By:   Atlas Venture Associates V, L.P.,
                                          as General Partner

                                    By:   Atlas Venture Associates V, Inc.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:
<PAGE>
        Signature Page to the Investors' Rights Agreement Amendment

                                    ABS CAPITAL PARTNERS, L.P.

                                    By:   ABS Partners, L.P.,
                                          as General Partner

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

                                    ABS CAPITAL PARTNERS II, L.P.

                                    By:   ABS Partners II, LLC,

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

<PAGE>

                               AMENDMENT NO. 2 TO

             FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

      This Amendment No. 2 (the "Amendment") to that certain Fifth Amended and
Restated Investors' Rights Agreement, dated December 27, 2001 (as amended, the
"Agreement"), among Phase Forward Incorporated, a Delaware corporation (the
"Corporation"), and the Founders and Purchasers as named therein, as amended by
Amendment No. 1 dated October 23, 2002, is made as of this 1st day of May, 2003
by and among the Corporation and the undersigned Founders and Purchasers.

      WHEREAS, the Corporation deems it desirable to increase the number of
shares of Common Stock that can be granted as stock options, pursuant to the
Corporation's 2003 Non-Employee Director Stock Option Plan, to attract and
retain directors for the Corporation; and

      WHEREAS, the undersigned Purchasers and Founders desire to facilitate the
Corporation's ability to attract and retain directors.

      NOW, THEREFORE, for good and valuable consideration, the validity and
sufficiency of which are hereby acknowledged, Article IV, Section 2(c) of the
Agreement is amended to read in its entirety as follows:

      "(c) up to Six Million Nine Hundred Ninety-Six Thousand Six Hundred
Sixty-Four (6,996,664) shares of Common Stock, or options exercisable therefor,
including options outstanding on the date of this Agreement (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations, or similar events occurring on or after the date of this
Agreement) issuable to officers, directors, employees and consultants of the
Company or any subsidiary pursuant to any plan, agreement, or arrangement
approved by the Board of Directors of the Company."

      Except as provided for in this Amendment, all other terms and conditions
of the Agreement shall continue to be in full force and effect. The Agreement,
as amended by this Amendment, constitutes the entire agreement between the
parties with respect to the subject matter contained herein and therein.

      This Amendment may be executed in one or more counterparts, each of which
shall be deemed to constitute an original, but all of which together shall
constitute one (1) instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

      IN WITNESS WHEREOF, this Amendment is executed as of the day and year
first above written.

                                      COMPANY:

                                      PHASE FORWARD INCORPORATED

                                      By:  -------------------------------------
                                           Robert K. Weiler, President and Chief
                                           Executive Officer
<PAGE>
              Signature Page to the Investors' Rights Agreement Amendment

                                         FOUNDERS:

                                         ---------------------------------------
                                         PAUL BLEICHER

                                         ---------------------------------------
                                         JEFFREY KLOFFT
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   PURCHASERS:

                                   SCHRODER VENTURES INTERNATIONAL
                                   LIFE SCIENCES FUND II LP1

                                   By:   Schroder Venture Managers Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   SCHRODER VENTURES INTERNATIONAL
                                   LIFE SCIENCES FUND II LP2

                                   By:   Schroder Venture Managers Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   SCHRODER VENTURES INTERNATIONAL
                                   LIFE SCIENCES FUND II LP3

                                   By:   Schroder Venture Managers Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   SCHRODER VENTURES INTERNATIONAL
                                   LIFE SCIENCES FUND II STRATEGIC
                                   PARTNERS L.P.

                                   By:   Schroder Venture Managers Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   SCHRODER VENTURES INTERNATIONAL
                                   LIFE SCIENCES FUND II GROUP CO-
                                   INVESTMENT SCHEME

                                   By:   SITCO Nominees Ltd. - VC 01903,
                                         as nominee

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   SCHRODER VENTURES INVESTMENTS
                                   LIMITED

                                   By:   SV (Nominees) Ltd.,
                                         as nominee

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   PACIFIC VENTURE GROUP II, L.P.

                                   By:
                                      ---------------------------------------
                                      as General Partner

                                   By:
                                      ---------------------------------------
                                         Name:
                                         Title:

                                   PVG ASSOCIATES II, L.P.

                                   By:
                                      ---------------------------------------
                                      as General Partner

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   DLJ CAPITAL CORP.

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:

                                   DLJ ESC II, L.P.

                                   By: DLJ LBO Plans Management Corporation,
                                       as General Manager

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:

                                   SPROUT CAPITAL VIII, L.P.

                                   By: DLJ Capital Corp.,
                                       as Managing General Partner

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:

                                   SPROUT VENTURE CAPITAL, L.P.

                                   By: DLJ Capital Corp.,
                                       as General Partner

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   THE SPROUT CEO FUND, L.P.

                                   By: DLJ Capital Corp., as General Partner

                                   By:
                                      ---------------------------------------
                                        Name:
                                        Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   NORTH BRIDGE VENTURE PARTNERS V-A,
                                   L.P.

                                   By:  North Bridge Venture Management V, L.P.,
                                        as General Partner

                                   By:
                                        -------------------------------------
                                        General Partner

                                   NORTH BRIDGE VENTURE PARTNERS V-B, L.P.

                                   By:  North Bridge Venture Management V, L.P.,
                                        as General Partner

                                   By:
                                      ---------------------------------------
                                        General Partner
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   THOMAS WEISEL CAPITAL PARTNERS L.P.

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   THOMAS WEISEL CAPITAL PARTNERS
                                   EMPLOYEE FUND, L.P.

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   TWP CEO FOUNDERS CIRCLE (QP), L.P.

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   TWP CEO FOUNDERS CIRCLE (AI), L.P.

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   TWP 2000 CO-INVESTMENT FUND, L.P.

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   THOMAS WEISEL CAPITAL PARTNERS
                                   (DUTCH), L.P.

                                   By:   Thomas Weisel Capital Partners LLC
                                         (Dutch), as General Partner

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   THOMAS WEISEL CAPITAL PARTNERS
                                   (DUTCH II), L.P.

                                   By:   Thomas Weisel Capital Partners LLC
                                         (Dutch), as General Partner

                                   By:   Thomas Weisel Capital Partners LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   ATLAS VENTURE FUND III, L.P.

                                   By:   Atlas Venture Associates III, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates III, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   ATLAS VENTURE ENTREPRENEURS' FUND
                                   III, L.P.

                                   By:   Atlas Venture Associates III, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates III, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   ATLAS VENTURE FUND V, L.P.

                                   By:   Atlas Venture Associates V, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates V, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   ATLAS VENTURE PARALLEL FUND V-A, C.V.

                                   By:   Atlas Venture Associates V, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates V, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   ATLAS VENTURE PARALLEL FUND V-B, C.V.

                                   By:   Atlas Venture Associates V, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates V, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   ATLAS VENTURE ENTREPRENEURS' FUND V, L.P.

                                   By:   Atlas Venture Associates V, L.P.,
                                         as General Partner

                                   By:   Atlas Venture Associates V, Inc.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:
<PAGE>
           Signature Page to the Investors' Rights Agreement Amendment

                                   ABS CAPITAL PARTNERS, L.P.

                                   By:   ABS Partners, L.P.,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:

                                   ABS CAPITAL PARTNERS II, L.P.

                                   By:   ABS Partners II, LLC,
                                         as General Partner

                                   By:
                                       --------------------------------------
                                         Name:
                                         Title:<PAGE>
                                                                    EXHIBIT 10.6

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS

                                [LILLY LOGO]

This Software License Agreement (the "Agreement") is entered into as of the 15th
day of March, 2001 by and between Eli Lilly and Company, having its principal
place of business at Lilly Corporate Center, Indianapolis, Indiana 46285, and
its Affiliates, (hereinafter referred to as "Lilly") and Phase Forward
Incorporated, a Delaware corporation with a principal place of business at 1440
Main Street, Waltham, MA 02451 (hereinafter referred to as "Licensor").

INDUCEMENTS

WHEREAS, Lilly is in the business of the research, development, manufacture, and
sale of pharmaceutical based health care solutions, and has submitted to
Licensor certain information regarding (i) Lilly's desire to add value and to
improve its capability for delivering pharmaceutical based health care solutions
through the use of certain technology; (ii) a general description of the
hardware, software and services to be provided by Licensor related to the
implementation of this technology within Lilly's organization, and (iii) certain
technical requirements to fulfill the present and future needs of Lilly
(collectively the "RFP");and

WHEREAS, Lilly desires to enter into a mutually beneficial relationship with
Licensor under the terms and conditions hereinafter set forth in order to
facilitate the anticipated acquisition by Lilly of certain Products; and

NOW, THEREFORE, in consideration of the inducements, mutual covenants and
conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1.   DEFINITIONS. Capitalized terms not otherwise defined in this Agreement
     shall have the meanings detailed below.

     * DATE. For any Product hereunder, the * Date is * provided for in this
     Agreement. If Lilly * , the * Date for such Product shall be the date
     that * .

     * . * is the * that * acquired by Lilly hereunder.

     AFFILIATE. An Affiliate is any company, partnership, or joint venture more
     than twenty-five percent (25%) of the interest in which is owned or
     controlled (i) by a party; or (ii) by any Parent or Subsidiary of a party.

     CONTRACTORS means organizations (such as, but not limited to, consulting
     firms and contract research organizations), employees of such organizations
     and individual contractors that provide services to Lily on a consulting or
     outsourcing basis.

                                    SOFTWARE
                                    LICENSE
                                   AGREEMENT

     CPU. Any computer or computer complex which shares memory or direct access
     storage device, and which for the purposes of Lilly's use thereof may be
     accessed by Lilly.

     DOCUMENTATION. Documentation shall mean the portion of the Product
     consisting of material in written, printed or electronic format, including
     but not limited to: technical reference manual, technical notes manual,
     users manual, application administration guide, and application security
     administration guide.

     INSTALLATION DATE. The Installation Date is the date by which all items and
     parts of the applicable Product(s) shall be installed and prepared for
     Acceptance Testing.

     INVESTIGATIONAL PRODUCTS means medical procedures, drugs or devices which
     Lilly is testing in clinical trials.

     INVESTIGATORS means clinical investigative organizations (such as, but not
     limited to, hospitals, medical clinics, and physicians' organizations and
     practices), employees of such organizations, and individual investigators
     that treat, monitor and provide information about subjects participating in
     clinical trials of Investigational Products.

     PRODUCT. A Product(s) is any Software or other deliverable pursuant to this
     Agreement.

     SERVICES. Services include any programming service, preventive maintenance,
     remedial hardware maintenance, software maintenance conversion service,
     consulting service, training service, or support service or other service
     provided by Licensor to Lilly pursuant to this Agreement.

     SOFTWARE. Software is the object code version of any computer programs,
     programming, modules, patches, upgrades, or modifications delivered by
     Licensor to Lilly pursuant to this Agreement as set forth in Appendix A.

     SPECIFICATIONS. Specifications are the functional performance parameters,
     capabilities and functionality of Software as published in its then-current
     Documentation.

     UPDATE. Update, means a set of procedures or new program code implemented
     by Licensor to correct Errors (as defined in the * Agreement) in the
     Product and to allow the Product to continue to function under supported
     versions of an applicable operating system, and which may include
     modifications and enhancements to improve functioning of the Product and is
     designated by a change in the digits anywhere to the right of the tenths
     digit in the Software version number [x.x(x)].

       THE SECTIONS ON THE FOLLOWING PAGES ALSO ARE PART OF THIS AGREEMENT

IN WITNESS WHEREOF, LILLY and Licensor have caused duly authorized
representatives of the respective parties to execute this Agreement on the
date(s) set forth below.

ELI LILLY AND COMPANY                   LICENSOR

By:  /s/ C. E. Golden                   By: /s/  John J. Schlicking
-------------------------------         ------------------------------------
Name: Charles E. Golden                 Name: John J. Schlicking
-------------------------------         ------------------------------------
Title: Chief Financial Officer          Title: Senior Vice President and CFO
-------------------------------         ------------------------------------
Date: March 15, 2001                    Date: March 7, 2001
-------------------------------         ------------------------------------

<PAGE>

     UPGRADE means a new version or release of the Product provided by Licensor
     which improves the functionality or which adds functional capabilities to
     the Product and is designated by a change in the digits (i) in the tenths
     digit in the Software version number [x.(x)x] or, (ii) to the left of the
     decimal point in the Software version number [(x).xx]. Upgrade shall
     include versions or releases of any successor product to the Product,
     including, but are not limited to by way of example, any next generation or
     successor product that contains or performs comparable or similar
     functionality and performance as the Product.

     SOFTWARE WARRANTY PERIOD. The Software Warranty Period is the period of
     time beginning on the * Date and continuing * calendar days thereafter.

2.   LICENSE. Licensor hereby grants to Lilly, and Lilly hereby accepts, on the
     following terms and conditions, * for either an enterprise license, a
     concurrent user license or a named user license as provided on Appendix A.

3.   USE OF SOFTWARE AND DOCUMENTATION. Lilly will have the right, as part of
     the license granted in this Agreement, to make as many additional copies of
     the Software and Documentation needed in support of the licensed use of the
     Software and Documentation as it may determine; provide however, that Lilly
     * copy of * is installed. Licensor shall have the right to * .

     Lilly may also make backup and archival copies of the Software and
     Documentation. Lilly shall have the right to utilize any Product during the
     term of this Agreement, on or in connection with any CPU that is utilized
     to fulfill its data processing needs at one or more sites owned or
     controlled by Lilly, or its outsourcing Contractor * which will not be
     * . It will not be * organization or other organization providing
     similar services.

     Lilly, its agents or Contractors, shall have the right to unlimited use of
     the applicable Software and to operate and use the Software at any time and
     for any period of time at the convenience of Lilly within the scope of the
     license granted. Lilly may use the Software acquired hereunder * in
     connection with *  at sites owned or controlled by Lilly, or its
     outsourcing Contractor *  which will not * . It will not be * to an
     outsourcing to *  or other organization providing similar services.

4.   SOURCE CODE. Within thirty (30) days after the effective date of this
     Agreement, Licensor shall enter into a software escrow agreement with the
     software escrow agent of its choosing * Lilly shall be listed as a
     beneficiary under the software escrow agreement. Within thirty (30) days
     after the initial delivery of Software to Lilly hereunder, Licensor shall
     provide to the software escrow agent the "Deposit Materials" consisting of
     the source code for the version of the Software delivered to Lilly (the
     "Source Code"), and all documentation necessary for the use thereof.
     Licensor shall maintain all such Deposit Materials with the software escrow
     agent in its most current Upgrade version and will deliver any revised
     Deposit Materials to the source code escrow agent * is effected by
     Licensor. Lilly shall be entitled to receive the Deposit Materials upon the
     occurrence of one or more of the following Escrow Events: (i)* (ii)
     Licensor ceases, for any reason, to do business; (iii)* (iv) * (v)
     bankruptcy, receivership, insolvency, reorganization, dissolution,
     liquidation, or similar proceedings are instituted by or against Licensor
     or all or any substantial part of its property under any Federal or State
     law; or (vi) other events, if any, defined in the source code escrow
     agreement which permit the release of the Deposit Materials. Upon
     occurrence of one or more of the foregoing Escrow Events, Lilly shall
     receive a * including the Source Code and documentation therefor, solely
     for the benefit of Lilly to use in a manner consistent with the terms of
     this Agreement. In the event that Lilly shall be entitled to receive the
     Deposited Materials pursuant to the Escrow Events, Lilly shall have the
     right to * and Licensor shall * of this Agreement or any * .

5.   PHASE FORWARD'S INTELLECTUAL PROPERTY

     5.1 ACKNOWLEDGMENT OF RIGHTS. Lilly acknowledges that (i) as between
     Licensor and Lilly, all right, title and interest in and to the Products
     (including any and all patents, copyrights, trade secret rights,
     trademarks, trade names and other intellectual property rights embodied
     therein or associated therewith) are and shall remain the property of
     Licensor and its licensors (if any), (ii) this Agreement in no way conveys
     any right or interest in the Products other than the limited rights and
     license to use them in accordance herewith, (iii) the Products are works
     protected by the patent and copyright laws of the United States and by
     international treaties, and (iv) Licensor asserts that the Products and
     embody valuable confidential and secret information of Licensor or its
     licensors (if any), the development of which required the expenditure of
     considerable time and money.

     5.2 LILLY'S OBLIGATIONS. Except as may be otherwise expressly authorized
     herein, Lilly shall (i) not disclose or provide any Product to any other
     party, (ii) not alter, reverse engineer, disassemble, decompile or copy any
     Software, (iii) not use or analyze any Product for the purpose of
     developing any similar product whether for external or internal use
     (although Lilly may develop a similar product; provided however that * ,
     (iv) not *  in which any * Product are disclosed to any third party, (v)
     limit access to the Products to its employees, Contractors and
     Investigators who require access in connection with Lilly's use of the
     Products as authorized hereunder and who have agreed in writing or are
     otherwise legally bound to observe Lilly's obligations hereunder, (vi) take
     all reasonable precautions, including secure storage of all media
     containing copies of the Software, to prevent unauthorized or improper use
     or disclosure of the Software, (vii) not remove from, and reproduce on any
     authorized copies of, the Products all titles, trademarks, trade names, and
     copyright, patent and other proprietary or restrictive legends or notices,
     and (viii) maintain all copies of the Products in a manner so as to
     reasonably preclude unauthorized use thereof or access thereto.

6.   *. The initial Product furnished by Licensor shall be subject to * as
     follows:

     6.1. At least * prior to installation of the Product, but no later than *
     following execution of this Agreement, Lilly shall provide Licensor with
     its * Licensor shall then *. Following delivery *. Licensor shall certify
     in writing to Lilly that *. With Licensor's assistance, Lilly shall, within
     * after receipt of such certification, *: (i) *; and (ii) *.

     6.2. If the Product * Lilly shall so notify Licensor in writing within five
     (5) business days of * and the *. In such case, the * shall be the date
     that * specified above.

Eli Lilly and Company
Software License Agreement -- December, 2000 Edition 1.0

                                        2

<PAGE>

     6.3. If the * , Lilly shall notify Licensor of * in writing within * of
     completion of * and Licensor shall have * in which to * to cause it to *
     Thereafter, Lilly shall have * in which to * specified above. This process
     shall be repeated as may be necessary until * to be *; provided, however,
     that if * hereunder within * after Licensor's initial written certification
     to Lilly that *, Lilly shall have * and * , in addition to the remedies
     available in Section 6.5. If Lilly fails to notify Licensor of * within
     the * Provided that Licensor exercises its best efforts to * and *
     hereunder within * days after Licensor's initial written certification to
     Lilly that * Licensor shall have the option to cancel this Agreement if
     Lilly does not * upon * notice that Licensor is exercising its option to
     cancel the Agreement under this provision.

     6.4. * DURING *. During all *, Licensor shall provide * as set forth in
     Exhibit 2, * , attached hereto, at no expense to Lilly.

     6.5. FAILURE TO * . If * fails to * , then Lilly may, at its sole
     discretion, elect any or all of the following options.

     6.5.1. Lilly may terminate the Agreement and request the * Lilly may cancel
     the license and receive a full reimbursement from Licensor within * for any
     and all fees that it may have paid. Lilly may, at its sole option, extend
     such * subject to Lilly's right to cancel and obtain reimbursements if * .
     If Lilly * Lilly will notify the Licensor in writing within five business
     days of *.

     6.5.2 Lilly may * and thereafter, for a period of * , each party agrees to
     enter into good faith negotiations to determine if there is a resolution to
     * acceptable to both parties, in their sole discretion.

     6.6. In no event shall use of any Product by Lilly, for business, profit,
     revenue, or any other purpose during * , constitute *.

7. FEES, INVOICES AND PAYMENTS

     7.1. LICENSE FEES. Lilly will pay to Licensor the License Fees specified in
     Appendix A, according to the schedule specified in such Appendix A.

     7.2. MAINTENANCE FEES. Provided that Licensor has not breached this
     Agreement or the Maintenance Agreement, during the time period beginning *
     Lilly shall pay for Maintenance Services in accordance with the Maintenance
     Services Fees specified in Appendix A. Licensor shall not enter into a
     factoring transaction or similar transaction obligating Lilly to a third
     party with respect to the Maintenance Fees.

     7.3 CHARGES. Lilly will determine the applicability of charges by the
     following criteria: (i) except as provided in Section 6.3, no Product shall
     be deemed to be * and Lilly shall have no obligation to Licensor for any
     payment unless and until the Product has * as set forth in this Agreement;
     (ii) Lilly shall not be billed or liable for any charges or expenses other
     than those charges or expenses stated and expressly authorized in this
     Agreement; and (iii) charges under this Agreement effective for less than a
     full calendar month shall be prorated on the basis of a thirty (30) day
     month.

     7.4 INVOICES. Invoices shall be delivered to Lilly at the following address
     and must clearly indicate the Lilly Purchase Order number:

                                Eli Lilly and Company
                                Accounts Payable, Drop Code 1057
                                Lilly Corporate Center
                                Indianapolis, Indiana 46285

     Invoiced amounts not in dispute shall be paid by Lilly * . In the event
     that Lilly disputes the validity of any amount in any invoice, Lilly shall
     communicate to Licensor the nature of the dispute within * after the date
     of the invoice.

     7.5 TAXES. Lilly will pay, or reimburse Licensor, for any and all taxes,
     imposed on Lilly or Licensor by this Agreement, or on the Products provided
     hereunder, or the use thereof; provided, however, that Lilly shall have no
     obligation to pay any such taxes or amounts: (i) that are based upon income
     of Licensor; or (ii) that are personal property taxes assessed on Products
     that are licensed to Lilly; or (iii) that are personal property taxes
     assessed or assessable for any period prior to the * for the applicable
     Product; or (iv) if Lilly has no obligation under this Agreement to pay
     Licensor the license, purchase, or other acquisition or usage price or fee
     for the Product(s) against which the tax is assessed or otherwise due and
     payable; or (v) that are due in whole or in part because of any failure by
     Licensor or its agents to file any return or information required by law,
     rule or regulation. Any personal property taxes assessable on purchased
     Products after * therefor shall be borne by Lilly. Licensor shall pay, and
     shall hold Lilly harmless against, any penalty, interest, or additional tax
     that may be assessed or levied as a result of the failure or delay of
     Licensor or its agents to file any return or information required by law,
     rule, or regulation. Licensor shall provide reasonable assistance to Lilly
     should Lilly contest any taxes imposed on it which result from this
     Agreement.

8 LILLY'S COVENANTS AND OBLIGATIONS

     8.1 PROHIBITION OF DIAGNOSTIC OR THERAPEUTIC USE. Lily acknowledges that it
     understands, and undertakes to ensure that all users of the Products
     (including, without limitation, Contractors and Investigators) will
     understand, that (i) the Products are designed to expedite and improve the
     collection, management and analysis of specific and limited data in
     clinical trials; (ii) such data do not comprise complete patient medical
     record (iii) such data may be incorrect because of transcription or other
     errors; (iv) the Products are not a diagnostic or therapeutic aid and must
     be used only for research purposes, and (v) data collected by, or analyses
     performed by, the Products must not be used for patient diagnosis or
     therapy decisions.

     8.2 COMPLIANCE WITH CLINICAL TRIAL AND PRIVACY LAWS. Lilly represents and
     covenants, with respect to all clinical trials for which the Products are
     used, that (i) each such trial will be conducted in compliance with all
     applicable local, Federal and international laws, treaties, rules,
     regulations, guidelines and codes of practice relating to such trial,
     including in particular those pertaining to clinical investigations, the
     use of Investigational Products in humans, the rights of subjects
     participating in clinical trials, compensation for research-related injury
     and privacy of medical records (including the European Data Privacy Act, to
     the extent applicable, and any other applicable regulations governing the
     transfer of medical records to other countries or the inspection of such
     records by government authorities or persons responsible for monitoring
     clinical trials), and

Eli Lilly and Company
Software License Agreement -- December, 2000 Edition 1.0

                                        3

<PAGE>

     (ii) without limiting the generality of the foregoing, that each such trial
     will use consent forms which include all language necessary, and such
     consent forms will be implemented and obtained from subjects under all
     procedures necessary, to ensure compliance with the foregoing.

9.   INFRINGEMENT.

     9.1. INFRINGEMENT WARRANTY. Licensor warrants that Lilly's use of any
     Product or Documentation will not infringe any patent, copyright,
     trademark, trade secret, or other proprietary right and that the Product or
     Documentation is not the subject of a lien, a security interest, claim,
     cause of action, or otherwise hypothecated to a third party.

     Licensor warrants that it has the right to grant to Lilly the license to
     use Product as set forth in this Agreement without violating the rights of
     any third party and that there is no actual or threatened suit by any third
     party based on an alleged violation of such right by Licensor. To the
     extent Licensor incorporates third party rights into the Product, Licensor
     warrants that it shall have obtained the rights from those third parties to
     vest in or grant to Lilly the various license rights necessary under this
     Agreement. Lilly acknowledges that use of any Product may require
     third-party software (the "Third-Party Software"), that the license granted
     by Licensor for Products does not include licenses for any such Third-Party
     Software, and that Lilly is solely responsible for obtaining valid licenses
     for all such necessary Third-Party Software.

     9.2 * FOR * OF *. Licensor shall * as provided for in * against any claim
     of a breach of the warranty set forth in Section 9.1 above. * AND THE
     ENTIRE OBLIGATION * WITH RESPECT TO ANY CLAIM OF INFRINGEMENT.

10.  SOFTWARE WARRANTIES.

     10.1. COMPATIBILITY AND PERFORMANCE. Licensor warrants that the Software
     will be compatible with the Licensor's technical environment
     recommendations, including hardware, operating system(s), software
     application(s), CPU's and networks specified by Licensor. Licensor
     represents and warrants to Lilly that all delivered components of the
     Software will be the latest generally available release, and that future
     releases and engineering changes to the Software or its components will not
     degrade performance or remove functionality. Licensor represents and
     warrants that at delivery and throughout the Warranty Period the Software
     shall substantially conform to and will operate substantially in accordance
     with the Specifications. Licensor shall not be responsible to the extent
     failures are caused by (a) Lilly's failure to use the Software in
     accordance with instructions included in the Documentation, or (b) the
     modification of the Software by any person other than Licensor, its
     employees, agents, affiliates or subcontractors (unless such modification
     was authorized or approved by Licensor); or (c) disaster or accident
     (unless caused by Licensor).

     10.2. * FOR * OF * . Lilly acknowledges that errors may exist or occur in
     any software program. As Licensor's *, and Lilly's * , for * set forth in
     Section 10.1 and 10.3, Licensor shall * to * and/or to * to correct any
     material error in any Software reported to Licensor during the Warranty
     Period. If, after reasonable efforts, Licensor cannot make the Software
     operate as warranted, then Licensor shall refund to Lilly all fees paid for
     such nonconforming Software upon Lilly's return of such nonconforming
     Software, * .

     10.3. MEDIA DEFECTS. Licensor warrants that all tapes, diskettes or other
     electronic media provided to Lilly hereunder will be free from defects.
     Licensor shall, within five days of notification by Lilly of such defect,
     replace any defective electronic media at no additional cost to Lilly.

     10.4. ILLICIT CODE. Licensor warrants unless (i) authorized in writing by
     Lilly or (ii) necessary to perform valid duties under this Agreement, any
     Software provided to Lilly by Licensor for use by Licensor or Lilly shall:
     (a) contain no hidden files, (b) as set up in the default installation, not
     replicate, transmit or activate itself without control of a person
     operating computing equipment on which it resides; (c) not alter, damage,
     or erase any data or computer programs without control of a person
     operating the computing equipment on which it resides; (d) contain no key,
     node lock, time-out or other function, whether implemented by electronic,
     mechanical or other means, which restricts or may restrict use or access to
     any programs or data developed under this Agreement, based on residency on
     a specific hardware configuration, frequency of duration of use, or other
     limiting criteria ("Illicit Code"). Provided and to the extent any program
     has any of the foregoing attributes, and notwithstanding anything elsewhere
     in this Agreement to the contrary, Licensor shall be in default of this
     Agreement, and a * shall apply. In addition to
     any other remedies available to it under this Agreement, Lilly reserves the
     right to pursue any civil and/or criminal penalties available to it against
     the Licensor.

     10.5. YEAR 2000. Licensor warrants and represents that the occurrence in or
     use by the Product of any dates, including without limitation any date with
     a year specified as "99" or "00", regardless of other meanings attached to
     these values, and any date before, on or after January 1, 2000 ("Millennial
     Dates") will not adversely affect its performance with respect to
     date-dependent data, computations, output, or other functions (including,
     without limitation, calculating, comparing, and sequencing) and that the
     Product will create, store, process and output information related to or
     including Millennial Dates without errors or omissions and at no additional
     cost to Lilly. At Lilly's request, Licensor will provide sufficient
     evidence to demonstrate the adequate testing of the Product to meet the
     foregoing requirements.

     10.6. DOCUMENTATION OF THE LICENSED SOFTWARE. Licensor warrants and
     represents that it shall at all times document the operation of the
     Software in a manner consistent with the best practices of the software
     development industry, and such Documentation shall accurately reflect the
     operation of the Software and enable a person reasonably skilled in
     computer programming and in possession of the Software source code to use,
     and maintain the Software fully and completely. Licensor further represents
     and warrants that it shall control and identify all adaptations, upgrades,
     and enhancements of the Software by means of a version, release or build
     number.

11.  GENERAL REPRESENTATIONS AND WARRANTIES.

     11.1. DUE AUTHORITY. Each party's execution, delivery and performance of
     this Agreement and each agreement or instrument contemplated by this
     Agreement has been duly authorized by all necessary corporate action. This
     Agreement and each agreement or instrument contemplated by this Agreement,
     when executed and delivered by each party in accordance with the terms of
     this Agreement, will be the legal, valid, and binding obligation of such
     party, in each case enforceable in accordance with its terms, except as
     such enforceability may be limited by applicable bankruptcy, insolvency,
     moratorium, reorganization, or similar laws then in effect that govern the
     enforcement of creditors' rights generally. All persons who have executed
     this Agreement on behalf of a party, or who will execute any agreement or
     instrument contemplated by this Agreement on behalf of a party, have been
     duly authorized to do so by all necessary corporate action.

     11.2. * REQUIREMENTS. Licensor represents and warrants that any products or
     services provided under this Agreement, as delivered to Lilly, will * .
     Licensor represents and warrants that to its knowledge any products or
     services provided under this Agreement, as delivered to Lilly, * . Upon * ,
     Licensor shall certify to Lilly that the products or services *

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     * . Upon written notice from Lilly that any service or product provided
     under this Agreement, as delivered to Lilly, does not * Licensor shall use
     its best efforts to remedy such * breach within * at no cost to Lilly.
     Furthermore, Licensor shall in good faith execute any and all agreements
     that Lilly reasonably requests Licensor to execute in order that Lilly may
     comply with Health Insurance Portability and Accountability Act ("HIPAA").

     11.3. * . Licensor warrants and represents that * for a Product shall be
     available from Licensor for the current version of the Product and the
     immediately preceding version.

     11.4. INSURANCE. Without limiting Licensor's liability to Lilly or third
     parties hereunder, Licensor shall maintain Commercial General Liability
     Insurance to include contractual and products completed operations
     coverages to the extent covered by insurance to meet its indemnification
     obligations under this Agreement or loss as required by applicable federal,
     state, or local laws, regulations or orders. All such insurance shall be
     primary and not contributory with regard to any other available insurance *
     in the amount of not less than *. * Licensor represents and warrants that
     it shall file all claims made under this Agreement with its insurance
     carriers.

     11.5. COMPLIANCE WITH LILLY POLICIES. Licensor agrees to reasonably assure
     that its employees will follow Lilly policies while at any Lilly site;
     provided Lilly provides Licensor with copies of such policies.

     11.6. GIFTS AND GRATUITIES. Licensor, its employees and agents shall not
     give or offer to give any material gifts or gratuities of any kind
     whatsoever to any Lilly employee or members of their families. In the event
     that Licensor is approached by anyone suggesting fraudulent or unethical
     behavior with regard to Licensor's business activities with Lilly, or if
     any request is made to Licensor, its employees or agents by any Lilly
     employees or members of their families for gifts or gratuities of any kind,
     Licensor agrees to immediately notify Lilly Procurement Management.
     Licensor certifies by execution of this Agreement that it knows of no
     material gifts or gratuities, or any kind whatsoever, paid to Lilly
     employees or members of their families by Licensor, Licensor's employees,
     or agents during the past two (2) years, except as otherwise set forth in
     writing to Lilly Procurement Management as an exhibit to this Agreement.
     Licensor agrees to immediately notify Lilly Procurement Management in
     writing of any violations of this subsection.

     11.7. PENDING LITIGATION. Licensor represents and warrants to Lilly that
     there is no action, suit, claim, investigation, or proceeding pending, or
     to the best of Licensor's knowledge, threatened against, by or affecting
     Licensor or the Product which, if adversely decided, might adversely affect
     Licensor's ability to enter into this Agreement, Licensor's performance of
     its obligations herein, or Lilly's use of the Software. Licensor further
     represents and warrants that it does not know of any basis for any such
     action.

     11.8 CHANGE OF CONTROL WARRANTY. Licensor represents and warrants to Lilly
     that no change of control with respect to Licensor is being considered,
     planned or pending by the Board of Directors or management, or to its
     knowledge the shareholders, of Licensor or by any affiliate of Licensor.

     11.9 DEBARMENT. Licensor represents and warrants that Licensor, and to the
     best of its knowledge its officers, directors, employees and agents, have
     not been debarred under any federal, state or local law, regulation, rule
     or order, including, but not limited to, the Generic Drug Enforcement Act
     of 1992. In the event any pending proceeding or threatened debarment of
     Licensor or its officers, directors, employees or agents, Licensor shall
     immediately notify Lilly of such proceeding or threatened debarment.

     11.10 * . In the event of * caused by the Software or Software failure,
     including, but not limited to, a Software failure resulting from an error,
     malfunction or overloading, Licensor shall *.

     11.11 FINANCIAL STATEMENTS. As of the date provided, Licensor represents
     and warrants that all schedules, documents, financial statements and
     materials provided to Lilly as part of any due diligence requests or RFP,
     if any, contain no untrue statement of material fact or omit a material
     fact necessary to make the statements contained therein not misleading. In
     the event that financial statements are provided to Lilly, as of the date
     provided, the financial statements present fairly and accurately in all
     material respects the financial position of Licensor, the results of its
     operations and costs and expenses for the periods specified and have been
     prepared in conformity with Generally Accepted Accounting Principles. Upon
     request by Lilly, Licensor agrees to provide Lilly with copies of its
     audited annual financial statements and unaudited quarterly financial
     statements as part of Lilly's ongoing vendor management program.

12.  DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY STATED IN THIS
     AGREEMENT, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW
     OR OTHERWISE, REGARDING OR RELATING TO * HEREUNDER OR IN CONNECTION
     HEREWITH. LICENSOR SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING
     WITHOUT LIMITATION THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
     PURPOSE. * REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING BUT NOT
     LIMITED TO STATEMENTS REGARDING * WHETHER MADE * OR OTHERWISE, WHICH IS
     NOT CONTAINED IN THIS AGREEMENT, SHALL BE DEEMED TO BE A WARRANTY BY
     LICENSOR FOR * .

13.  TERM. The License granted pursuant to this Agreement shall commence upon
     execution of this Agreement and shall continue * , subject to the terms of
     this Agreement unless terminated in accordance with the provisions detailed
     herein.

14.  TERMINATION. This Agreement and the License may be terminated as follows:

     14.1. By Licensor upon * for the material breach by Lilly of any of its
     obligations under this Agreement if Lilly has not cured such breach within
     such notice period. Licensor shall not be permitted to terminate this
     Agreement or any License granted hereunder in the event Lilly breaches its
     obligations relating to * *

     14.2. If Licensor substantially fails to perform in accordance with its
     obligations under this Agreement, Lilly may notify Licensor of its breach
     of this Agreement. Within * following such notice, Licensor shall * such
     failure to perform and shall upon correction immediately notify Lilly.
     Lilly may terminate this Agreement if Licensor does not correct such
     failure to perform * . Lilly also may terminate this Agreement if any
     representation, warranty or obligation contained or referred to herein has
     been materially

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     breached, provided that Licensor has failed to cure such breach *.

     14.3. * after termination of this Agreement pursuant to this Section, Lilly
     shall immediately discontinue further use of the Software and destroy all
     such copies of the Software. Lilly shall, upon written request by Licensor,
     provide Licensor with written certification indicating the destruction of
     all such copies of the Software in Lilly's possession or under its custody
     or control.

     14.4. Without in any way prejudicing any legal relief or remedy, upon
     termination by Lilly pursuant to this Section, Lilly, shall receive from
     Licensor at * for the licenses Lilly has paid for and a * of amounts paid
     hereunder by Lilly for any *.

     14.5. DATA RIGHTS UPON TERMINATION. Upon termination of this Agreement,
     Licensor grants Lilly *.

     14.6. *. The * Agreement attached hereto as Exhibit 2 and incorporated
     herein by reference shall apply to all Products licensed or sold to Lilly
     hereunder as set forth in Appendix A, shall become effective upon * by
     Lilly. Notwithstanding anything else in the Agreement, if Lilly * it shall
     not result in * this Agreement.

15.  SURVIVAL. The provisions in Sections 5, 8, 9, 11, and 16 through 30 shall
     survive acceptance and, payment under, and termination of, this Agreement

16.  USE OF NAME AND PUBLICITY. Licensor agrees that it shall not, without prior
     written consent of Lilly in each instance, use in advertising, publicity or
     otherwise the name of Lilly, or any partner or employee of Lilly, nor any
     trade name, trademark, trade device or simulation thereof owned by Lilly,
     or represent, directly or indirectly, that any product or any service
     provided by Licensor has been approved, recommended, certified, or endorsed
     by Lilly. Licensor and Lilly agree not to advertise any affiliation with
     each other under this Agreement and not to publicly reveal the existence of
     this Agreement or any of the terms of this Agreement, without the prior
     written consent of the parties. Upon Lilly written consent, *, Licensor
     may *.

17.  CONFIDENTIALITY, PROPRIETARY NATURE OF INFORMATION. The parties hereto
     acknowledge that all information and documents disclosed by a party, or
     which come to the receiving party's attention during the course of its
     performance of its obligations under this Agreement, constitute a valuable
     asset of and are proprietary to the disclosing party. Therefore, each party
     shall keep confidential and not disclose or otherwise make available to any
     third party any confidential information, advice or material of any nature
     that is provided or made available by the other party, including but not
     limited to, any written reports or other data, without the prior written
     consent of the other party. This provision shall survive termination of
     this Agreement.

     This section shall not apply to any information that: (i) is in or comes
     into the public domain through no breach by the recipient of the
     information of its obligations under this Agreement; (ii) the recipient
     acquires from a third party who owes no obligations of confidence to the
     other party to this Agreement in respect thereof; (iii) was already known
     to the recipient at the time it received such information from the other
     party to this Agreement as shown by the recipient's prior written records;
     or (iv) is independently developed by the receiving party without use of
     the other party's confidential information.

     If either Licensor or Lilly is requested or required by any legal or
     investigative process to disclose any information that it is not permitted
     to disclose, that party shall provide the other with prompt notice of each
     such request and the information requested so that the other party may seek
     to prevent disclosure or the entry of protective order. If disclosure is
     required and a protective order is not obtained, the party from whom
     disclosure is required shall disclose only such information that it is
     advised by its counsel is legally required to be disclosed.

     Due to the nature of the confidential information, the parties shall have
     the right to seek equitable relief to enforce any right arising hereunder
     or to prevent or cure any breach of this Section, without in any way
     prejudicing any available legal relief. Such equitable relief may include,
     but is not limited to, the seeking of a temporary or permanent injunction,
     restraining order or order for specific performance, and may be sought with
     or without prior notice, depending on the circumstances.

18. INDEMNIFICATION.

     18.1. INFRINGEMENT INDEMNIFICATION. In the event of an claim by a third
     party against Lilly that any Software infringes a patent, or any copyright
     or trade secret, Licensor shall indemnify, defend and hold Lilly harmless
     from any loss, cost, liability or expense, including reasonable attorneys'
     fees arising from such claim. If, as a result of any such claim of
     infringement, Licensor or Lilly is enjoined from using any Product and/or
     Documentation, or if Licensor believes that the Software is likely to
     become the subject of a claim of infringement, Licensor will, at its option
     and its expense: (i) procure for Lilly the right to continue using the
     Product and/or Documentation; or (ii) replace or modify the Product and/or
     Documentation so that it becomes non-infringing (which modification or
     replacement shall not adversely affect the applicable specifications for,
     or the use or operation by Lilly of, the Product and/or Documentation); or
     (iii) if the Product and/or Documentation is purchased, and the other
     options stated are not practicable, repurchase the Product and/or
     Documentation from Lilly; or (iv) if the Product and/or Documentation is
     licensed, and the other options stated are not practicable, remove such
     Product and/or Documentation from Lilly's site(s) and refund to Lilly
     licenses fees paid by Lilly for the Software *, and release Lilly from any
     further liability under this Agreement. This provision will survive
     termination of this Agreement. THE FOREGOING STATES *.

     18.2 GENERAL INDEMNIFICATION. Each party (the "Indemnifying Party") shall
     defend, indemnify, and hold the other party and its Affiliates, and the
     officers, directors, agents, employees and assigns or successors of each
     (the "Indemnified Party"), harmless from and against any and all claims,
     demands, suits, judgments, losses, or expenses of any nature whatsoever
     (including attorney's fees) arising directly or indirectly form or out of:
     (i) any negligent act, error, or omission of the Indemnifying Party, its
     subcontractors or their respective officers, directors, agents,
     subcontractors, invitees or employees; (ii) any breach of the Indemnifying
     Party's obligations or representations as set forth herein; (iii) * (iv)
     injuries to persons (including death) or loss of, or damage to, property,
     occasioned by negligence, unlawful act, or willful misconduct of the
     Indemnifying Party's personnel, subcontractors, or agents. Except for a
     party's liabilities as set forth in Section 18.1, and 17 of this Agreement,
     any damages that either party is required to pay for any reason whatsoever
     and regardless of the form of action, in the aggregate, shall be *. In
     addition, Lilly shall indemnify and hold Licensor and its affiliates,
     directors, officers, employees and agents (including successors and
     assigns) harmless against any claim arising out of or relating to any
     accident, adverse event, illness, disability, death or other
     medical-related problem in any way arising out or relating to, or alleged
     to arise out of or relate to, (i) any clinical trial of an Investigational
     Product for which any Product was used and (ii) any product derived from or
     based on such clinical trial or Investigational Product. Notwithstanding
     the foregoing, if any claim against Licensor for breach of this Agreement
     is a claim covered by any insurance policy maintained by Licensor, any
     recovery of proceeds under such policy shall be paid to Lilly to the extent
     Lilly's damages exceed the foregoing limitation of liability. Licensor
     shall vigorously pursue any applicable policy claim as requested by Lilly.

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     18.3 Except for the obligations in Section 17, neither Licensor nor Lilly
     shall be liable to the other party for any special, punitive or
     consequential damages, or loss of profits arising out of or in connection
     with their respective obligations under this Agreement.

19.  ASSIGNMENT. The duties under this Agreement may not be delegated, and the
     rights under this Agreement may not be assigned, to any third party in
     either case without the prior written consent of the non-assigning party,
     which consent shall not be unreasonably withheld; provided, however, that
     the either party may assign its rights and delegate its duties hereunder,
     with notice to but without consent of the other party, to any corporate
     successor to such party by merger, purchase of assets and assumption of
     liabilities, acquisition, reorganization, or otherwise, or to any
     Affiliate. Notwithstanding the foregoing, in no event shall * under this
     Agreement in whole or in part * in connection with *.

20.  ADDITIONAL PROVISIONS. Additional provisions, if any, are set forth in
     Appendix A.

21.  AUDIT PROVISION. During the term of this Agreement Lilly will have the
     right, at its expense and upon not less than five (5) working days prior
     written notice, to audit Licensor's systems and services, with specific
     emphasis on Licensor's security and change control procedures. Such audit,
     which may be conducted by Lilly personnel under obligations of
     confidentiality or by an independent auditing firm that Licensor has
     approved, will not interfere unreasonably with Licensor's business
     activities, and will be conducted no more than once per calendar year,
     unless Lilly has received a request from the U.S. Food and Drug
     Administration (or agency with similar regulatory authority and
     jurisdiction over Lilly's business), or unless a previous audit has
     disclosed a material non-conformance to the standards required by the
     appropriate agencies. If the audit shows material non-conformance to the
     obligations set forth in this Agreement, then Licensor will * as soon as
     practicable. If the non-conformance continues for  *, then Lilly shall have
     the option to declare Licensor in breach of this Agreement. Lilly will use
     information received during an audit solely for the purposes of the
     Agreement and will otherwise maintain the confidentiality of such
     information. In addition, upon request, Licensor shall make available to
     the FDA all records required by governmental regulations related to the
     Software and any data or results produced by the Software. In any
     governmental or regulatory agency gives notice of its intention to conduct
     an audit or take any other regulatory actions with respect to the Software
     or any data or results produced by the Software, Licensor shall promptly
     give Lilly notice thereof, and Lilly shall have the right to be present at
     any such audit or regulatory action.

22.  UCITA. Licensor and Lilly hereby acknowledge and agree that any provisions
     of any state law adopting exactly or in modified form the Uniform Computer
     Information Transactions Act ("UCITA") shall not be applicable to this
     Agreement. Furthermore, both Licensor and Lilly waive any and all rights
     arising from any such law.

23.  CHOICE OF LAW AND VENUE. This Agreement and all matters arising out of or
     relating to this Agreement shall be governed by and construed in accordance
     with the laws of the State of Indiana, excluding all choice of law
     provisions. All proceedings relating to or arising out of the subject
     matter hereof shall be maintained exclusively in the courts situated in
     Marion County, Indiana, and Licensor hereby consents to personal
     jurisdiction and venue therein and hereby waives any right to object to
     personal jurisdiction or venue therein.

24.  ENTIRE AGREEMENT. This Agreement, and all Exhibits, Schedules and
     Attachments constitutes the entire agreement between the parties regarding
     its subject matter. Any modification of this Agreement will be effective
     only if it is in writing and signed by the parties.

25.  WAIVER. None of the conditions of the Agreement shall be considered waived
     unless such waiver is in writing and signed by the waiving party. No such
     waiver shall be a waiver of any past or future default, breach or
     modification of any of the conditions of the Agreement unless expressly
     stipulated in such waiver.

26.  SEVERABILITY. If any provision in this Agreement is held to be invalid,
     void, or unenforceable, the remaining provisions shall nevertheless
     continue in full force.

27.  NOTICES. Any written notices to be given hereunder by either party shall be
     deemed effective upon personal delivery or upon mailing the notice to the
     party to be served at the address appearing in Appendix B.

28.  FORCE MAJEURE. Neither party shall be liable to the other for failure to
     perform under this Agreement if said failure results, directly or
     indirectly, from government action or inaction, labor disputes, mechanical
     or electrical breakdown, or natural disaster.

29.  HEADINGS. The headings in this Agreement are solely for convenience of
     reference and shall not affect its interpretation.

30.  AMBIGUOUS TERMS. Any ambiguities in this Agreement will not be strictly
     construed against the drafter of the language concerned but will be
     resolved by applying the most reasonable interpretation under the
     circumstances, giving full consideration to the intentions of the parties
     at the time of contracting. This Agreement will not be construed against
     any party by reason of its preparation.

Eli Lilly and Company
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<PAGE>

                    APPENDIX A - FEES AND ADDITIONAL PROVISIONS

I.   FEES.

1.   DESCRIPTION OF * SERVICES

<TABLE>
<CAPTION>

                                                                                          Annual
Quantity                   Description                  Unit Cost       Total Cost      Maintenance
--------    -------------------------------------       ---------       ----------      -----------

<S>         <C>                                         <C>             <C>             <C>

                        *                                   *                *               *
                        *                                   *                *               *

                                                           TOTAL:            *               *

</TABLE>

2.   PAYMENT FOR * SERVICES

     *

II.  ADDITIONAL PROVISIONS.

     *

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                                                                    EXHIBIT 2: *

This * Agreement ("* Agreement") is subject to all terms and conditions of the
Software License Agreement entered into by and between Lilly and Licensor on
March ___, 2001 ("License Agreement").

WHEREAS, Lilly wishes to obtain * from Licensor for the Product(s) specified in
the License Agreement; and

WHEREAS, Licensor wishes to provide * for the Product(s) on the terms and
conditions described in this * Agreement;

NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.   DEFINITIONS.

     Terms in this * Agreement which are capitalized have the meanings set forth
     below, as defined elsewhere in this * Agreement or in the License
     Agreement.

     ERROR means an instance of failure of the Product to be operative. An Error
     is a Class 1 Error if it renders continued use of the Product commercially
     infeasible in Lilly's reasonable judgment. An Error is a Class 2 Error if
     it makes continued use of the Product seriously inconvenient and
     substantially reduces its value to Lilly, in Lilly's reasonable judgment.
     All other Errors are Class 3 Errors; in particular, all Documentation
     shortcomings and deviations and cosmetic errors that do not have the
     economic consequences defined for Class 1 and Class 2 Errors shall be
     deemed Class 3 Errors.

     * shall include the * described herein.

     * shall include, without limitation, providing a means for *.

     * shall be *. In addition, * . Beginning on January 1, 2002, *. Until
     December 31, 2001, Lilly may purchase * .

2.   TERM AND TERMINATION.

     2.1. TERM. The initial term of this * Agreement shall commence * for the
     Product covered by this * Agreement and continue through * (the " * Term").
     Each subsequent term shall be for a period of * and this * Agreement *
     unless earlier terminated as provided herein.

     2.2. TERMINATION BY LILLY. After * Lilly may * the Product covered by this
     * Agreement at any time upon thirty (30) days prior notice to Licensor,
     whereupon the obligations of the parties under this * Agreement relating to
     such Product not expressly surviving shall cease.

     2.3. TERMINATION BY LICENSOR. If Licensor no longer continues to make *
     thereto generally available to its customers for such Product, the
     obligations set forth in Section 5.9 * of this * Agreement shall apply.
     Thereafter, in either event, Licensor may terminate the provision of * to
     such particular Product.

     2.4. TERMINATION BILLING. Licensor shall refund any prepaid charges for *
     pro rata from the effective date of any permitted termination. Lilly shall
     pay any charges for * rendered pro rata to the effective date of any
     permitted termination.

3.   CHARGES. Licensor shall invoice Lilly for charges due and payable for * as
     set forth on Exhibit A * prior to each annual anniversary, and Lilly shall
     pay undisputed invoices *. Lilly shall not be obligated for any * of any
     kind rendered by Licensor except in accordance with this * Agreement.

4.   REINSTATEMENT. After any * Lilly may * upon the terms and conditions of
     this * Agreement. The cost of * shall be * and, in addition, a penalty in
     the amount of * Licensor * had Lilly continued * during the period of *.

5.   * RESPONSIBILITIES.

     5.1. * Licensor shall provide Lilly the * described in this * Agreement
     with respect to each covered Product, including * Licensor shall correct
     all Errors reported by Lilly by means of the procedures established by this
     * Agreement. * shall be performed in a timely and professional manner by
     qualified maintenance technicians familiar with each Product and its
     operation. Licensor shall provide, upon Lilly's request, periodic reports
     on the status of * requested by Lilly.

     5.2. * TIME. Licensor shall provide * during the *. Licensor will also have
     * outside of the * from whom Lilly may request *. * both in and outside of
     the * , shall be provided as set forth below.

     5.3. * Licensor shall provide to Lilly, and keep current, a * for Lilly to
     *. Such * shall include: (1) the * which shall be the * and (2) the * to
     provide the *; provided however that Lilly must follow the procedures for
     Error Reporting set forth below. Lilly shall * at each site that may *.

     5.4. ERROR REPORTING. If Lilly desires * Lilly shall * in accordance with
     the *. Licensor's duly qualified personnel shall respond to Lilly's * with
     * Product * beginning * of Lilly's * or, as to *, within *. If Licensor
     fails * or if Lilly is unable, * to *; or if *, from the is * when Lilly *
     with Licensor *, then Lilly shall *

ELI LILLY AND COMPANY
SOFTWARE LICENSE AGREEMENT -- DECEMBER, 2000 EDITION 1.0

                                        4

<PAGE>

     * until *

     5.4.1.    After Lilly *, Licensor shall provide * as soon as possible.
               Lilly shall consult with Licensor to *. If Licensor has not * on
               the same day as *, Lilly shall submit to Licensor a * and such
               other data as Licensor may request and is reasonably available to
               Lilly in order to *.

     5.4.2.    For *, Licensor shall provide * reasonable in Lilly's judgment,
               in any event *. Licensor shall, upon Lilly's request and without
               limitation, * to work with Lilly * without interruption (i.e., 24
               hours per day) until Licensor * Lilly shall pay travel and
               expense costs in connection herewith in accordance with Lilly's
               contractor travel policy.

     5.4.3.    For *, Licensor shall provide * reasonable in Lilly's judgment,
               in any event *. Licensor shall, upon Lilly's request and without
               limitation, a * to work with Lilly * during Lilly's regular
               business hours until Licensor * reasonable in Lilly's judgment.
               Lilly shall pay travel and expense costs in connection herewith
               in accordance with Lilly's contractor travel policy.

     5.4.4.    For *, Licensor shall * no later than the next Upgrade, unless
               Licensor has scheduled release of such Upgrade *, in which case
               Licensor shall * in the following Upgrade.

     5.5. UPDATES AND UPGRADES. Licensor shall provide to Lilly as part of *
     Updates and Upgrades to the Product *, whenever Licensor makes such Updates
     and Upgrades generally available to its customers.

     5.6. CONTINUING *. Lilly may decline to install an Update or Upgrade
     offered by Licensor. In such event, Licensor shall continue the * for the
     most current Version of the Software and the immediately preceding Version.
     For an additional annual fee *, for such * ("* Fee"), Licensor shall
     continue the * for * Product that is installed at Lilly, subject to
     Licensor's right to terminate this * Agreement as permitted in Section 2.3
     Termination by Licensor.

     5.7. COMPATIBILITY. Licensor shall ensure that the technical environment
     recommendations for the operating system software to be used in conjunction
     with the Software shall at all times be a supported version of said
     software.

     5.8. EARLY VERSION. Licensor shall, upon Lilly's request, provide early
     versions of Updates or Upgrades AS IS with no warranty or * prior to
     general release in order to provide development feedback. At Lilly's
     request, Licensor will *. Lilly may send a reasonable number of *. Lilly
     shall pay all out-of-pocket expenses associated therewith.

     5.9 *. If the provision of * covered by this * Agreement is * as allowed in
     Section 2.3 Termination by Licensor, Licensor shall (ii) * and (ii) use
     commercially reasonable efforts to find for Lilly a third party acceptable
     to Lilly to offer * at a price comparable to the charges set forth herein
     * Lilly uses the Product commercially in the conduct of its business.
     Licensor shall assist Lilly to achieve a smooth transition to any other
     vendor of * after any termination of the provision of * covered by this *
     Agreement, or of this * Agreement.

     5.10 MODIFICATIONS. Licensor shall provide, at Lilly's request, a total
     of *

6.   LILLY RESPONSIBILITIES.

     6.1. SUSPECTED ERRORS. If Lilly discovers any suspected Error in the
     Program, Lilly shall analyze the suspected Error to determine if it is the
     result of Lilly's misuse or misunderstanding of the Product or by the
     performance of a third party before seeking Licensor's assistance.

     6.2. UNAUTHORIZED MODIFICATIONS. In the event Licensor determines that the
     problem reported by Lilly is directly related to unauthorized alterations
     of the Product by Lilly or the performance of a third party, then Licensor
     may charge for employee time expended at the current time and material
     rates agreed upon less discount in addition to reasonable out-of-pocket
     expenses; or at Lilly's option; Licensor shall be released from maintenance
     obligations for the modified portion of the Product.

7.   BREACH AND REMEDIES. If Licensor does not deliver the correction for the
     suspected Error within the times allowed by Section 5, * Responsibilities,
     even if Licensor has delivered a reasonable workaround, Licensor shall
     provide, within ten (10) days after such allowed times, a written analysis
     of the problem and a written plan to supply Lilly with a correction that
     will not degrade performance or functionality within ten (10) days after
     such allowed times. If Lilly rejects such plan and Licensor has not
     delivered a correction that will not degrade performance or functionality
     within ten (10) days of Lilly's notice of rejection, Licensor shall be
     considered to be in breach.

Eli Lilly and Company
Software License Agreement -- December, 2000 Edition 1.0

                                        5

<PAGE>

                         APPENDIX B - NOTICES

If to Lilly:

             Global Sourcing Manager - IT Procurement
             Eli Lilly and Company
             Lilly Corporate Center
             Indianapolis, Indiana 46285

With a copy to:

             Eli Lilly and Company
             Lilly Corporate Center
             Indianapolis, Indiana 46285
             Attn: General Counsel

 If to Licensor:

             Phase Forward Incorporated
             1440 Main Street
             Waltham, MA 02451
             Attn: Chief Financial Officer

 With a copy to:

             Phase Forward Incorporated
             1440 Main Street
             Waltham, MA 02451
             Attn: General Counsel

Eli Lilly and Company
Software License Agreement -- December, 2000 Edition 1.0

                                3

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