EXHIBIT 10.8


                        SEPARATION AGREEMENT AND RELEASE


TO:  SAEED KARIM

         The purpose of this Separation Agreement and Release (the "Agreement")
is to confirm the terms of your separation from employment with Front Porch
Digital Inc. (the "Company") and any of its divisions, predecessors, successors
or assigns (referred to collectively with the Company as the "Companies").

         1. You acknowledge that (a) you were advised by the Company to consult
with an attorney of your choosing before you signed this Agreement; and (b) you
were afforded sufficient opportunity to so consult with an attorney.

         2. You also acknowledge that you were advised by the Company, and you
understood, that (a) you had at least twenty-one (21) days from your receipt of
this Agreement to consider and execute it; and (b) you can revoke this Agreement
by delivering written notice to the Company to the attention of Mr. Tim Petry,
Chief Financial Officer, Front Porch Digital Inc., 1810 Chapel Avenue West,
Suite 130, Cherry Hill, New Jersey 08002 within a period (the "Revocation
Period") of seven (7) days following the day on which you sign this Agreement,
and this Agreement shall not become effective or enforceable until after the
Revocation Period has expired.

         3. You also acknowledge that you and the Company agreed that your
employment with the Companies and your membership on the Board of Directors of
the Company, and on any Committee thereof, ended as of the close of business on
October 15, 2001 (the "Termination Date"). You also acknowledge and agree that
if the Company receives any inquiries concerning your employment, the Company
will state that you left the Company to pursue other interests.

         4. As consideration for your performance of services through the
Termination Date, the Company paid you your base salary and provided related
fringe benefits through the Termination Date. You acknowledge that you are not
and will not be entitled to any other compensation for your services. However,
the Company has agreed under Paragraph 7 below to provide you with additional
compensation for the covenants and releases made and given by you under
Paragraphs 5 and 6 below.

         5. For and in consideration of the Company's agreement to provide the
additional compensation pursuant to Paragraph 7 below, you agree and acknowledge
as follows:

             (a) The term "Person" shall mean any individual and any entity of
any kind or nature whatsoever, including, without limitation, any partnership
and any corporation. The term


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"Company Services" shall mean any services offered or performed by the Company
at any time during the twenty-four (24) month period immediately preceding the
Termination Date (the "Prior 24-Month Period"), any reasonably similar services
and any services that can essentially be substituted for the foregoing Company
Services.

             (b) During your employment by the Company and during the period you
are being paid as a consultant to the Company pursuant to Paragraph 7(a)(4)
hereof, except in your performance of services for the Company, you shall not,
on behalf of yourself or any other Person, directly or indirectly solicit or
market any Company Services from or to (i) any Person that has its principal
place of business in the United States and was or became a client of any of the
Companies at any time during the Prior 24-Month Period, but only if, as to any
such Person, you or any current or former employee of any of the Companies who
reports or reported to you has or had at any time during such Prior 24-Month
Period solicited or marketed any Company Services from or to such Person; or
(ii) any Person with whom you or any current or former employee of any of the
Companies who reports or reported to you is or was involved in developing a
client relationship on behalf of any of the Companies at any time during the six
(6) month period prior to the Termination Date. Further, during your employment
by the Company, you shall not compete directly or indirectly with any of the
Companies.

             (c) During your employment by the Company and during the period you
are being paid as a consultant to the Company pursuant to Paragraph 7(a)(4)
hereof, you shall not directly or indirectly solicit or induce any individual
employed with any of the Companies at that time or at any time during the six
(6) month period immediately preceding the Termination Date to leave his or her
employment or to cease any other contractual arrangement with any of the
Companies, or to accept employment with you or with any Person with whom you are
or may be at any time employed or act as a director, officer or consultant, or
have a financial interest therein.

             (d) "Business Associate(s)" means customers of any of the Companies
or other third parties with whom any of the Companies conducts or may conduct
business. "Confidential Information" means any trade secrets, proprietary
information or other information of or pertaining to any of the Companies or any
Business Associate and that is disclosed to or otherwise learned by you during
or as a result of your employment with any of the Companies, and whether made
available orally, electronically, in writing, visually or otherwise.
Confidential Information includes, without limitation, methodologies, processes,
tools, designs, specifications, software, business strategies, financial
information, forecasts, personnel information and customer identities,
characteristics, buying habits and requirements, and any other information that
is not generally known or that any of the Companies treat as confidential. You
will not, in any manner, either during or after your employment with any of the
Companies (i) make use of Confidential Information except in the performance of
services for any of the Companies, or (ii) disclose to any person or entity,
other than authorized personnel of any of the Companies, any Confidential
Information. These restrictions, however, will not apply to Confidential
Information that you can demonstrate is or has become generally known to the
public through no fault of yours or breach of any agreement by you, or was
previously known to you other than as a


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result of disclosure by or access to such Confidential Information from any of
the Companies or a Business Associate.

             (e) You agree and warrant that you have returned to the Company all
Company property and tangible matter. Without limiting the scope of the
foregoing, you represent and warrant that you have returned all equipment,
furniture, documents and other property of the Company including, without
limitation, all originals and copies of any software, disks, security devices,
data, computer hardware, reports, files, correspondence, plans, planning
documents, and all documents containing Confidential Information as that term is
defined in subparagraph 5(d) of this Agreement. You further represent and
warrant that you have not taken or copied, and have not and will not reveal to
any person, in any form or manner, any confidential or proprietary information
of the Company including, but not limited to, lists of customers or potential
customers, financial information, business practices, business plans and/or
strategic plans.

             (f) You acknowledge that the Company and you believe that the
restrictions contained in this Paragraph 5 are reasonable as to the scope,
geographical area and duration of the covenants provided by you in this
Paragraph 5 and are essential to protect the Companies' legitimate business
interests. Enforcement of these provisions should not cause you any hardship,
and, because of your background and experience, will not preclude you from
becoming gainfully employed.

             (g) You agree to reasonably cooperate with the Companies in
connection with any dispute, claim, litigation or investigation by any person or
entity against or involving the Companies or any of their officers, employees,
agents or representatives. As part of this agreement to reasonably cooperate,
you agree to speak and/or meet with the Companies and/or their representatives
or counsel at and for reasonable times upon reasonable notice, without the need
for any legal proceeding or compulsory process. You agree also to make yourself
available for reasonable times and upon reasonable notice for such things as
interviews, depositions and trials. The Company agrees to reimburse you for
reasonable expenses incurred with respect to such cooperation.

         6. Although you acknowledge that you have not made any claim and are
not aware of any reason for which you would or could assert any claim against
any of the Companies, the Company's agreement to make payments to you pursuant
to Paragraph 7 below is also made by the Company and accepted by you as
consideration for your Release provided in this Paragraph 6. Therefore, as part
of the consideration for such agreement by the Company, you hereby fully and
forever remise, release and discharge (referred to collectively as "Release")
the Company, its current and former divisions, affiliates, subsidiaries,
branches, benefit plans, parents, predecessors, stockholders, members, officers,
directors, employees, agents, representatives, successors and assigns, both
individually and in their official capacities (referred to herein collectively
as "Releasees"), of and from any and all actions, suits, claims, charges,
complaints, contracts, demands, agreements, promises or obligations whatsoever,
in law or equity, which you have or now or hereafter may have against the
Company or any other Releasee for, upon, or by


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<PAGE>

reason of any matter, cause or thing whatsoever, known or unknown, from the
beginning of the world through the date of this Agreement, including, but not
limited to, any and all matters arising out of your employment by and
termination of your employment with the Companies, and including, but not
limited to, any alleged violation of the Age Discrimination in Employment Act,
as amended ("ADEA"); the Older Worker Benefits Protection Act; Title VII of the
Civil Rights of 1964, as amended; the Reconstruction Era Civil Rights Act, as
amended; the Civil Rights Act of 1991, as amended; the Equal Pay Act; the
Americans with Disabilities Act; the Federal Family and Medical Leave Act; the
Fair Labor Standards Act; the Employee Retirement Income Security Act of 1974,
as amended; the New Jersey Law Against Discrimination; the New Jersey Family
Leave Act; the New Jersey Conscientious Employee Protection Act (also known as
the Whistleblower Act); the retaliation provisions of the New Jersey Workers'
Compensation Law; the New Jersey State Wage and Hour Law; the New Jersey
Unemployment Compensation Law and/or any other alleged violation of any federal,
state or local law, regulation or ordinance, and/or contract or implied contract
or tort law or public policy claim, having any bearing whatsoever on the terms
and conditions of your employment by and the termination of your employment with
the Companies and/or Releasees, including, but not limited to, any claim for
wrongful discharge, back pay, vacation pay, and/or future wage loss, provided,
however, that you do not remise, release or discharge any claim for breach by
the Company of the terms of this Agreement, and provided, also, that, as set
forth in section 7(f)(1)(C) of the ADEA, as added by the Older Workers Benefit
Protection Act of 1990, you are not waiving any rights or claims that may arise
after this Agreement is executed by you.

         7. (a) As consideration for your execution, delivery and performance of
this Agreement, your compliance with your covenants in Paragraph 5 above and
your Release in Paragraph 6 above, the Company shall:

             (1) pay you on each of October 30, 2001 and November 15, 2001, the
         gross sum of seven thousand five hundred dollars ($7,500). From this
         amount, the Company will determine and withhold applicable taxes
         (including but not limited to, federal, FICA, FUTA, Medicare, state,
         local and unemployment compensation, etc.);

             (2) vest, as of October 15, 2001, options to purchase 166,667
         shares of Common Stock, par value $.001 per share (the "Common Stock"),
         of the Company previously granted to you pursuant to the 2000 Equity
         Incentive Plan of the Company (the "Plan"), of which options to
         purchase 100,000 shares shall be exercisable at $2.00 per share and
         options to purchase 66,667 shares shall be exercisable at $4.00 per
         share; PROVIDED, HOWEVER, that in the event the Company elects to
         reprice any currently outstanding employee stock options that are
         exercisable to purchase shares of Common Stock at a price of $2.00 or
         $4.00 per share, or to cancel any such employee stock options and issue
         new employee stock options in lieu thereof, the options vested pursuant
         to this subparagraph (2) shall be similarly repriced or replaced;

             (3) issue to you on October 31, 2001 (or as soon thereafter as is
         practicable, but in no event later than November 9, 2001) pursuant to
         the Plan shares of


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<PAGE>

         Common Stock valued (in accordance with subparagraph (4)(iii) below) at
         $14,000, which shares shall have been registered under the Securities
         Act of 1933, as amended, and shall be freely transferable by you; and

             (4) commencing October 31, 2001, retain you as a consultant to the
         Company on the following terms:

                   (i) TERM. Commencing October 31, 2001 and ending on the date
             you have obtained full-time employment as contemplated by
             subparagraph (e) below, but in no event prior to April 30, 2002 or
             after October 31, 2002.

                   (ii) DUTIES. You shall consult with management of the Company
             regarding the Company's products and services and the markets
             therefor. In the performance of your duties as a consultant, you
             shall not be required to consult more than 10 hours per month and,
             unless you otherwise agree, all such consulting services shall be
             provided telephonically.

                   (iii) FEES. In consideration of your consulting services, the
             Company shall pay you a fee of $15,000 per month, payable in
             advance. In respect of the first five (5) months of your consulting
             services, the Company, at its option, shall satisfy its fee
             obligation, in whole or in part, by the payment of cash or by the
             issuance to you of shares of Common Stock pursuant to the Plan,
             which shares shall have been registered under the Securities Act of
             1933, as amended, and shall be freely transferable by you. Such
             initial payment of cash or shares shall be payable to you on
             October 31, 2001; provided, however, that any portion payable in
             shares may be issued as soon as practicable thereafter, but in any
             event prior to November 9, 2001. All subsequent payments will be
             payable bi-monthly in advance on April 30, 2002 (two months), June
             30, 2002 (two months), August 31, 2001 (two months) and September
             30, 2002 (one month), and at the option of the Company, shall be
             payable in cash or in shares of Common Stock issued under the Plan,
             which shares shall have been registered under the Securities Act of
             1933, as amended. In determining the number of shares of Common
             Stock issuable to you on any payment date, shares shall be valued
             at a price equal to the average closing price of the Common Stock,
             as reported on the Over-the-Counter Bulletin Board, for the last
             five trading days ending on the third trading day immediately
             preceding such payment date.

                   (iv) EXPENSES. You shall be entitled to reimbursement for all
             reasonable and necessary out-of-pocket expenses incurred in the
             performance of your duties in accordance with the Company's
             policies applicable thereto.

                   (v) WITHHOLDING, ETC. In conformity with your independent
             contractor status and without limiting any of the foregoing, you
             understand that no deduction or withholding for taxes or
             contributions of any kind shall be made by


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<PAGE>

             the Company. You agree to accept exclusive liability for the
             payment of all self employment taxes or contributions for
             unemployment insurance or pensions or annuities or social security
             payments which are measured by the remuneration paid to you as an
             independent contractor and to reimburse and indemnify the Company
             for any such taxes or contributions or penalties which the Company
             may be compelled to pay as a result of your non payment of the same
             as a self employed individual. You also agree to take all action
             and comply with all applicable administrative regulations necessary
             for the payment by you of such.

                   (vi) BENEFITS. Except as expressly provided herein, you shall
             not participate in the Company's fringe benefit plans or any other
             compensation or benefit plans the Company maintains for its own
             employees.

All options vested pursuant to subparagraph (2) above shall be exercisable in
accordance with the terms thereof at any time on or before October 31, 2002,
notwithstanding any provision of the Plan that would cause such options to
terminate on an earlier date as a result of your earlier termination of
employment with the Company, and shall otherwise remain subject to the terms and
conditions thereof.

         (b) You understand and agree that your eligibility for medical benefits
under the Company's group health care plan terminated as of October 15, 2001,
and that you have elected to continue coverage in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985 (referred to herein as
"COBRA"). The Company shall pay the premiums required for such coverage until
such time as you have obtained full-time employment as contemplated by
subparagraph (e) below, after which time you must pay the premiums required for
such coverage.

         (c) The Company's obligations under this Paragraph shall not arise
unless the Agreement becomes effective as set forth in Paragraph 2.

         (d) You acknowledge and agree that the Company's obligations under
subparagraphs 7(a) arise under this Agreement, are in consideration for your
signing this Agreement, and constitute consideration to which you are not
otherwise entitled.

         (e) You acknowledge and agree that you are currently seeking full-time
employment and that the Company's payment obligations under subparagraphs
7(a)(4) and 7(b) shall continue only so long as you continue in good faith to
seek full-time employment on terms reasonably satisfactory to you. You
acknowledge and agree that from and after the date this Agreement becomes
effective as set forth in Paragraph 2 above, you shall use your best efforts to
continue to seek and to obtain such full-time employment. At such time as you
obtain full-time employment, you shall notify the Company (attention of the
Chief Financial Officer) in writing of such employment (with a copy of such
notice concurrently sent by telecopy to Eric M. Hellige, Esq. at 212-326-0806).


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<PAGE>

         (f) You and the Company acknowledge and agree that the number of shares
of Common Stock to be issued to you pursuant to Paragraphs 7(a)(2) and
7(a)(4)(iii) above will be determined on a good faith basis to allow you to sell
such shares in an orderly manner and receive the aggregate dollar amounts to
which you would have been entitled had the Company paid you cash rather than
issued you shares of Common Stock (i.e., $14,000 in the case of Paragraph
7(a)(2) and $15,000 per month in the case of Paragraph 7(a)(4)(iii)). You agree
that you will attempt to liquidate the shares of Common Stock issued to you
pursuant to such Paragraphs on an arms' length basis and in a prompt and orderly
manner with a view toward maximizing the cash consideration you will receive
upon the sale of such shares; provided, however, that all shares issued to you
on or about October 31, 2001 pursuant to Paragraph 7(a)(4)(iii) will be sold by
you within 120 days of your receipt thereof and all other shares issued to you
pursuant to this Agreement will be sold by you within 60 days of your receipt
thereof. You will promptly furnish the Company (in the manner specified in
Paragraph 7(e) hereof) copies of all broker confirmations with respect to such
sales, which shall reflect the number of shares sold, the sales price or prices
and the sales commissions and other costs incurred by you in connection with
each such sale. If, following your sale of all shares of Common Stock relating
to any specific payment, the aggregate net proceeds received by you, as
reflected on the broker confirmations relating to the sales of such shares, from
such sales is less than the dollar amount of the payment to which such shares
relate, the Company shall promptly pay you, at the election of the Company in
cash or additional shares of Common Stock (valued pursuant to Paragraph 7(e)),
the difference between the amount of the net proceeds received by you and the
amount of the payment to which you would have been entitled. If, following your
sale of all shares of Common Stock relating to any specific payment, the
aggregate net proceeds to you, as reflected on the broker confirmations relating
to the sale of such shares, from such sales is greater than the dollar amount of
the payment to which such shares relate, you shall promptly pay to the Company
the amount of such excess.

         8. You agree not to institute any complaint, lawsuit or other
proceeding against any of the Releasees with respect to any matters for which a
Release has been provided under this Agreement. The foregoing does not restrict
the parties from instituting any proceeding for breach of the terms of this
Agreement.

         9. The Company and you agree to keep confidential the existence of this
Agreement and all terms and information contained in this Agreement except to
the extent (a) either are required by process of law to make such disclosure and
promptly notify the other of receipt of such process or (b) to enforce this
Agreement. You also agree to keep confidential the existence of this Agreement
and all terms and information contained in this Agreement except to the extent
of a disclosure on a need-to-know basis to your spouse, attorneys, accountants
and financial advisors who are advised of the confidential nature of this
Agreement. The Company agrees to keep confidential the terms and information
contained in this Agreement, except as may be required under applicable law or
to the extent of disclosures to persons and/or entities having legitimate
business-related needs to know.


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<PAGE>

         10. You acknowledge that any breach of any of your obligations in this
Agreement will cause damages to the Company that may not be readily determinable
in money terms and will not be adequately compensable by money damages, and such
breach will cause the Company irreparable harm. Accordingly, in addition to any
and all remedies that the Company will otherwise have, you hereby consent that
any violation by you of any one or more of the provisions of this Agreement
shall permit the Company to seek a restraining order and/or an injunction to
prevent you from violating said provision or provisions.

         11. You covenant and agree that you will not make or authorize to be
made any statement, written or oral, in disparagement of the Company or any of
its officers, shareholders, directors, employees, agents or associates
(including, but not limited to, negative references to each or any of the
Company's products, services or corporate policies) to the general public and/or
to the Company's employees, potential employees, customers, potential customers,
suppliers, potential suppliers, business partners, and/or potential business
partners. The Company covenants and agrees not to make or authorize to be made
any statement, written or oral, in disparagement of you to the general public
and/or to the Company's employees, potential employees, customers, potential
customers, suppliers, potential suppliers, business partners, and/or potential
business partners. The Company makes no representation or commitment concerning
statements beyond that expressly set forth in the preceding sentence.

         12. The Company and you acknowledge and agree that the offer and
acceptance of this Agreement and the Agreement itself are not admissions, and
shall not be construed to be admissions, of any wrongdoing or liability by you
or each or any of the Releasees; moreover, any such liability or wrongdoing is
denied by you and the Releasees and each or any of them. The offer of this
Agreement, the Agreement itself, and any of its terms, shall not be admissible
as evidence of any liability or wrongdoing by you or each or any of the
Releasees in any judicial, administrative or other proceeding now pending or
hereafter instituted by any person or entity.

         13. This Agreement constitutes a complete and final agreement between
the parties and supersedes and replaces all prior or contemporaneous agreements,
negotiations or discussions relating to its subject matter.

         14. If any provision of this Agreement or the application thereof is
held invalid, (a) the invalidity of such provision shall not affect other
provisions or applications of this Agreement that reasonably can be given effect
without the invalid provisions or applications and, (b) such invalid provision
shall be enforced to the greatest extent permitted by applicable law. As to the
scope, geographical area and duration of your covenants in Paragraph 5 above,
you agree that the Court shall substitute a reasonable scope, geographic area
and/or duration with respect to any provision in Paragraph 5 that is or
otherwise would be held invalid.

         15. The interpretation of this Agreement and the rights of the parties
under this Agreement shall be governed by the substantive laws of the State of
Colorado without giving effect to its choice of law principles. Any litigation
arising from any claim, dispute or other matter in question of any kind relating
to this Agreement shall be brought exclusively in the


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<PAGE>

Courts of Boulder County, Colorado. The prevailing party in any such litigation
shall be entitled to recover his or its attorneys fees and costs from the other
party.

         16. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns, estates, heirs and
personal representatives.

         17. Each party hereto acknowledges that (a) it has read and understands
all of the provisions of this Agreement and is fully aware of the content and
legal effect hereof; (b) it is voluntarily entering into this Agreement; and (c)
it has not relied on any representation or statement not set forth in this
Agreement.

                                       AGREED TO:


Dated:           10/31/2001                        /S/ SAEED KARIM
       ----------------------------    -----------------------------------------
                                       Saeed Karim


Dated:           10/31/2001            FRONT PORCH DIGITAL INC.
       ----------------------------


                                       By:  /S/ JEAN REICZYK
                                           -------------------------------------
                                           Jean Reiczyk
                                           Chief Executive Officer


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