THOMAS P. SWEENEY III EMPLOYMENT AGREEMENT


        This AGREEMENT (the "Agreement") is made as of August 18, 2004 (the
"Effective Date"), by and between Front Porch Digital, Inc., a Nevada
corporation with its headquarters located in Mt. Laurel, New Jersey (the
"Employer"), and Thomas P. Sweeney III (the "Executive"). In consideration of
the mutual covenants contained in this Agreement, the Employer and the Executive
agree as follows:

        1.      EMPLOYMENT. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.

        2.      CAPACITY; LOCATION. The Executive shall serve the Employer as
Chief Executive Officer and, if duly elected, the Executive agrees to act as
Chairman of the Employer's Board of Directors for as long as he is employed as
the Chief Executive Officer and so elected. In his capacity of Chief Executive
Officer, Executive will report to the Board of Directors, and shall be
responsible for all strategic and operational matters relating to the Employer's
overall business requirements subject to the direction of the Board of
Directors. In such capacity, the Executive shall perform such services and
duties in connection with the business, affairs and operations of the Employer
as may be assigned or delegated to the Executive from time to time by or under
the authority of the Board of Directors. Executive's employment with Employer
will be based in Employer's Boulder, Colorado office; PROVIDED, that Executive
may be required from time to time to travel in connection with Employer's
business needs.

        3.      TERM. Unless earlier terminated as provided in this Agreement,
the term of the Executive's employment under this Agreement shall be for a
period of two (2) years beginning on the Effective Date (the "Initial Term").
This Agreement may be renewed or extended if mutually agreed to by the Employer
and Executive in writing (the Initial Term, together with any subsequent
employment period being referred to herein as the "Employment Term").

        4.      COMPENSATION AND BENEFITS. The regular compensation and benefits
payable to the Executive during the Employment Term under this Agreement shall
be as follows:

                (a)     BASE SALARY. For all services rendered by the Executive
        under this Agreement, the Employer shall pay the Executive a base salary
        (the "Salary") at the annual rate of Two Hundred Seventy-Five Thousand
        Dollars ($275,000.00). Such Salary shall be increased to Three Hundred
        Thousand Dollars ($300,000.00) on January 1, 2005 and shall be subject
        to further increase from time to time at the discretion of the Board of
        Directors upon the recommendation of the Compensation Committee of the
        Board of Directors (the "Compensation Committee"). The Salary shall be
        payable in periodic installments in accordance with the Employer's usual
        practice for its senior executives.

                (b)     BONUS. Executive shall be eligible for an annual bonus
        of up to 100% of Executive's Salary based upon Executive's achievement
        of certain performance criteria to be determined and evaluated by the
        Board of Directors it its sole discretion. Such bonus shall be payable
        on or before February 25th of each year.

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                (c)     REGULAR BENEFITS. The Executive shall be reimbursed for
        an individual health insurance policy to a maximum of Seven Hundred
        Fifty Dollars ($750.00) per month or shall be entitled to health
        insurance benefits from Employer, and shall also be entitled to
        participate in any employee benefit plans, life insurance plans,
        disability income plans, retirement plans, expense reimbursement plans
        and other benefit plans which the Employer may from time to time have in
        effect for all or most of its executive management employees. Such
        participation shall be subject to the terms of the applicable plan
        documents, generally applicable policies of the Employer, applicable law
        and the discretion of the Board of Directors, the Compensation Committee
        or any administrative or other committee provided for in or contemplated
        by any such plan. Except with respect to the aforementioned health
        insurance benefits, nothing contained in this Agreement shall be
        construed to create any obligation on the part of the Employer to
        establish any such plan or to maintain the effectiveness of any such
        plan that may be in effect from time to time.

                (d)     INSURANCE. The Employer will assume the payment
        obligations of Executive's life insurance policy in effect as of the
        date hereof; provided that Employer shall not be obligated to pay
        premiums in excess of $9,500 per year. The Employer shall ensure that
        Executive is added to Employer's directors and officers insurance policy
        with commercially reasonable coverage and policy limits effective on the
        Effective Date and Employer agrees to keep such insurance in effect
        throughout the term of this Agreement.

                (e)     VACATION. The Executive shall be entitled to four weeks
        of vacation, such vacation time to accrue on a per-pay-period basis.

                (f)     TAXATION OF PAYMENTS AND BENEFITS. The Employer shall
        undertake to make deductions, withholdings and tax reports with respect
        to payments and benefits under this Agreement to the extent that it
        reasonably and in good faith believes that it is required to make such
        deductions, withholdings and tax reports. In the event that it is
        determined that any payment or distribution of any type to or for the
        benefit of the Executive made by the Employer, by any of its affiliates,
        by any person who acquires ownership or effective control or ownership
        of a substantial portion of the Employer's assets (within the meaning of
        section 280G of the Internal Revenue Code of 1986, as amended, and the
        regulations thereunder (the "Code")) or by any affiliate of such person,
        whether paid or payable or distributed or distributable pursuant to the
        terms of an employment agreement or otherwise (the "Total Payments"),
        would be subject to the excise tax imposed by section 4999 of the Code
        or any interest or penalties with respect to such excise tax (such
        excise tax, together with any such interest or penalties, are
        collectively referred to as the "Excise Tax"), then the Executive shall
        be entitled to receive an additional payment (an "Excise Tax Restoration
        Payment") in an amount that shall fund the payment by the Executive of
        any Excise Tax on the Total Payments as well as all income taxes imposed
        on the Excise Tax Restoration Payment, any Excise Tax imposed on the
        Excise Tax Restoration Payment and any interest or


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        penalties imposed with respect to taxes on the Excise Tax Restoration or
        any Excise Tax.

                (g)     EXPENSES. The Employer shall reimburse the Executive for
        all reasonable and necessary business related travel expenses incurred
        or paid by the Executive in performing his duties under this Agreement
        and which are consistent with applicable policies of the Employer. All
        payments for reimbursement of such expenses shall be made upon
        presentation by the Executive of expense statements or vouchers and such
        other supporting information as the Employer may from time to time
        reasonably request.

                (h)     STOCK OPTIONS. As additional consideration for
        Executive's performance of services hereunder, effective upon the
        Effective Date, the Employer shall grant to Executive, pursuant to the
        Employer's Equity Incentive Plan, options (the "Options") to purchase
        10,237,000 shares (subject to customary adjustment for splits,
        combinations and similar transactions) of Common Stock, $.001 par value
        per share, of the Employer. It is intended that the maximum amount of
        these Options as permitted under law qualify as an "incentive stock
        option" under Section 422 of the Code, and to the extent that all or any
        portion of the Options do not so qualify, the Options shall be treated
        as non-qualified options. The Options shall have an exercise price as
        determined by the Board of Directors as soon as practicable (subject to
        customary adjustment for splits, combinations and similar transactions)
        and shall expire on the tenth (10th) anniversary of the Effective Date.
        The Options will be subject to a vesting schedule such that one-third of
        the Options shall vest on the first anniversary of the Effective Date
        and one-twenty-fourth of the remaining Options shall vest each month
        thereafter. Not later than ten (10) days following the Effective Date,
        the Employer shall deliver to Executive an Award Agreement issued
        pursuant to Employer's 2000 Equity Incentive Plan governing the Options
        and containing the terms set forth in this Section 4(h). Additionally,
        the Award Agreement will provide that, upon termination of Executive's
        employment as a result of any of the events described in Section(s) 6(b)
        or (c) hereof, then, notwithstanding such termination, (A) the Options
        that would have vested but for such termination during the subsequent
        12-month period will vest immediately, (B) such vested Options will
        continue to be exercisable for a period not to exceed ten (10) years
        from the grant date of such Options, and (C) any restrictions on the
        sale of the shares underlying the Options shall be removed by Employer,
        other than restrictions pursuant to applicable federal securities laws
        or pursuant to that certain Lock-Up and Voting Agreement dated the date
        hereof between the Employer, Employee and the Former MSI Stockholders
        named therein (the "Lock-Up Agreement"). Executive shall also be
        eligible to otherwise participate in Employer's Equity Incentive Plan
        subject to approval by the Board of Directors.

                (i)     EXCLUSIVITY OF SALARY AND BENEFITS. The Executive shall
        not be entitled to any payments or benefits other than those provided
        under this Agreement.

        5.      EXTENT OF SERVICE. During the Executive's employment under this
Agreement, the Executive shall devote the Executive's full business time, best
efforts and business judgment, skill and knowledge to the advancement of the
Employer's interests and to the discharge of the

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Executive's duties and responsibilities under this Agreement. The Executive
shall not engage in any other business activity, except as may be approved by
the Board of Directors; PROVIDED, that nothing in this Agreement shall be
construed as preventing the Executive from:

                (a)     investing the Executive's assets in any company or other
        entity in a manner not prohibited by Section 7(d) and in such form or
        manner as shall not require any material activities on the Executive's
        part in connection with the operations or affairs of the companies or
        other entities in which such investments are made; and

                (b)     engaging in religious, charitable or other community or
        non-profit activities that do not impair the Executive's ability to
        fulfill the Executive's duties and responsibilities under this
        Agreement.

                (c)     accepting no more than two Board positions with other
        companies with prior approval of the Employer's Board of Directors.

        6.      TERMINATION AND TERMINATION BENEFITS. Notwithstanding the
provisions of Section 3, the Executive's employment under this Agreement shall
terminate under the following circumstances set forth in this Section 6.

                (a)     TERMINATION BY THE EMPLOYER FOR CAUSE. The Executive's
        employment under this Agreement may be terminated for "Cause" without
        further liability on the part of the Employer, effective immediately
        upon a vote of the Board of Directors and written notice to the
        Executive. Only the following shall constitute "Cause" for such
        termination:

                        (i)     dishonest or fraudulent statements or acts of
                the Executive with respect to the Employer or any affiliate of
                the Employer;

                        (ii)    the Executive's conviction of, or entry of a
                plea of guilty or nolo contendere for, (A) a felony or (B) any
                misdemeanor (excluding minor traffic violations) involving
                deceit, dishonesty or fraud;

                        (iii)   willful and wanton conduct or willful misconduct
                of the Executive with respect to the Employer or any affiliate
                of the Employer; or

                        (iv)    material breach by the Executive of any of the
                Executive's obligations under this Agreement, or any other
                agreement to which Executive and Employer are now or hereafter a
                party to.

                (b)     TERMINATION BY THE EMPLOYER WITHOUT CAUSE. Subject to
        the payment of Termination Benefits pursuant to Section 6(d), the
        Executive's employment under this Agreement may be terminated by the
        Employer without Cause upon written notice to the Executive (a
        termination "Without Cause").

                (c)     TERMINATION BY EXECUTIVE FOR GOOD REASON. The Executive
        may, at his option, terminate Executive's employment for "Good Reason"
        by giving a notice of


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        termination to Employer in the event that: (i) there is a failure of
        Employer (or successor employer) to promptly pay Executive's salary or
        additional compensation or benefits hereunder in accordance with this
        Agreement in any material respect, (ii) Executive is assigned duties
        substantially inconsistent with his title without Executive's prior
        written consent, (iii) Executive's principal place of employment is
        assigned to a geographic location not agreed to by Executive, or (iv)
        any other material violation or breach by Employer of this Agreement. It
        shall also be considered Good Reason for termination by Executive if, in
        the event of a Change of Control (as hereinafter defined), any successor
        employer fails to fully assume Employer's obligations under this
        Agreement. For the purposes of this Agreement, a "Change of Control"
        shall mean the occurrence of any of the following events: (A) a
        dissolution or liquidation of the Employer; (B) a sale or other
        disposition of all or substantially all of the Employer's assets; (C) a
        merger or consolidation involving the Employer in which stockholders of
        the Employer immediately prior to such transaction do not own a majority
        of the voting power of the Employer or its successor immediately after
        such transaction; or (D) a sale or other transfer of capital stock of
        Employer in one or a series of related transactions whereby an
        individual or "group" (as such term is used in Section 13(d)(3) of the
        Securities Exchange Act of 1934, as amended) which did not previously
        have direct or indirect "control" (as such term is defined in Rule 12b-2
        under the Securities Exchange Act of 1934, as amended) of Employer
        acquires such control.

                (d)     CERTAIN TERMINATION BENEFITS. Unless otherwise
        specifically provided in this Agreement or otherwise required by law,
        all compensation and benefits payable to the Executive under this
        Agreement shall terminate on the date of termination of the Executive's
        employment under this Agreement. Notwithstanding the foregoing, in the
        event of termination of the Executive's employment with the Employer (A)
        Without Cause pursuant to Section 6(b), (B) for Good Reason pursuant to
        Section 6(c) or (C) upon the non-renewal of this Agreement by the
        Employer upon the expiration of the Initial Term, the Employer shall
        provide to the Executive the following termination benefits
        ("Termination Benefits"):

                        (i)     payment of the Executive's Salary at the rate
                then in effect pursuant to Section 4(a) for the period from the
                date of termination until the later of (X) the date that is
                twelve (12) months after the date of termination or (Y) the
                remainder of the Initial Term (the "Severance Period"). Salary
                payments will be made on a monthly basis.

                        (ii)    a single, pro-rated bonus payment payable not
                later than thirty (30) days following the date of termination in
                an amount equal to the arithmetic mean of the bonus amounts paid
                to Executive pursuant to Section 4(b) hereof during the
                immediately preceding three years; provided that if this
                Agreement is terminated prior to the expiration of the Initial
                Term, the amount payable pursuant to this subclause (ii) shall
                be equal to (A) a pro rata amount of Executive's salary then in
                effect if this Agreement is terminated during the first year of
                the Initial Term, (B) a pro rata amount of Executive's
                first-year bonus if this Agreement is terminated during the
                second year of the Initial Term, or (C) a pro rata amount of

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                the arithmetic mean of the bonus amounts paid to Executive
                pursuant to Section 4(b) hereof during the first two years of
                the Initial Term if this Agreement is terminated during the
                third year after the date hereof.

                        (iii)   continuation of group health plan benefits to
                the extent authorized by and consistent with 29 U.S.C. ss. 1161
                ET SEQ. (commonly known as "COBRA"), with the cost of the
                regular premium for such benefits shared in the same relative
                proportion by the Employer and the Executive as in effect on the
                date of termination for twelve (12) months. If Executive does
                not enroll in the group health plan, but has an individual
                health policy instead, the monthly premium will be paid for up
                to twelve (12) months or the date the Executive is employed
                elsewhere, whichever first occurs.

                        (iv)    continuation of the life insurance benefits
                described in Section 4(d) hereof for during the Severance
                Period.

                        (v)     the rights respecting the Options as described
                and on the terms set forth in Section 4(h) hereof.

                        (vi)    subject in all cases to the Lock-Up Agreement
                and the terms of any registration rights agreements between the
                Employer and the Executive then in effect, the grant of a demand
                registration right having customary terms covering all shares of
                capital stock of the Employer beneficially owned by the
                Executive pursuant to a Registration Rights Agreement
                substantially in the form of that certain Registration Rights
                Agreement dated October 10, 2000 between Employer and Equity
                Pier, LLC.

                        The Termination Benefits set forth in subclause (i)
        above shall be paid in equal monthly installments from the date of
        termination, and the Termination Benefits set forth in subclause (iii)
        above shall continue effective until the end of the Severance Period or
        the date the Executive is employed elsewhere, whichever first occurs. If
        the termination is for Good Reason following a Change of Control, the
        payment described in (i) above will be paid in full upon termination,
        not made payable on a monthly basis.

                        Notwithstanding the foregoing, nothing in this
        Section 6(d) shall be construed to affect the Executive's right to
        receive COBRA continuation (if enrolled in the group health plan)
        entirely at the Executive's own cost to the extent that the Executive
        may continue to be entitled to COBRA continuation after the Executive's
        right to cost sharing under Section 6(d)(iii) ceases.

                (e)     DISABILITY. If the Executive shall be disabled so as to
        be unable to perform the essential functions of the Executive's then
        existing position or positions under this Agreement with reasonable
        accommodation, the Board may remove the Executive from any
        responsibilities and/or reassign the Executive to another position with
        the Employer during the period of such disability. Notwithstanding any
        such removal or reassignment, the Executive shall continue to receive
        the Executive's full Salary (less any disability pay


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        or sick pay benefits to which the Executive may be entitled under the
        Employer's policies) and benefits under Section 4 of this Agreement
        (except to the extent that the Executive may be ineligible for one or
        more such benefits under applicable plan terms) for a period of time
        equal to nine (9) months. If any question shall arise as to whether
        during any period the Executive is disabled so as to be unable to
        perform the essential functions of the Executive's then existing
        position or positions with reasonable accommodation, the Executive may,
        and at the request of the Employer shall, submit to the Employer a
        certification in reasonable detail by a physician selected by the
        Employer to whom the Executive or the Executive's guardian has no
        reasonable objection as to whether the Executive is so disabled or how
        long such disability is expected to continue, and such certification
        shall for the purposes of this Agreement be conclusive of the issue. The
        Executive shall cooperate with any reasonable request of the physician
        in connection with such certification. If such question shall arise and
        the Executive shall fail to submit such certification, the Employer's
        determination of such issue shall be binding on the Executive. Nothing
        in this Section 6(e) shall be construed to waive the Executive's rights,
        if any, under existing law including, without limitation, the Family and
        Medical Leave Act of 1993, 29 U.S.C. ss.2601 ET SEQ. and the Americans
        with Disabilities Act, 42 U.S.C. ss.12101 ET SEQ.

        7.      CONFIDENTIAL INFORMATION, NONCOMPETITION AND COOPERATION.

                (a)     CONFIDENTIAL INFORMATION. As used in this Agreement,
        "Confidential Information" means information belonging to the Employer
        which is of value to the Employer in the course of conducting its
        business and the disclosure of which could result in a competitive or
        other disadvantage to the Employer. Confidential Information includes,
        without limitation, financial information, reports, and forecasts;
        inventions, improvements and other intellectual property; trade secrets;
        know-how; designs, processes or formulae; software; market or sales
        information or plans; customer lists; and business plans, prospects and
        opportunities (such as possible acquisitions or dispositions of
        businesses or facilities) which have been discussed or considered by the
        management of the Employer. Confidential Information includes
        information developed by the Executive in the course of the Executive's
        employment by the Employer, as well as other information to which the
        Executive may have access in connection with the Executive's employment.
        Confidential Information also includes the confidential information of
        others with which the Employer has a business relationship.
        Notwithstanding the foregoing, Confidential Information does not include
        information in the public domain, unless due to breach of the
        Executive's duties under Section 7(b).

                (b)     CONFIDENTIALITY. The Executive understands and agrees
        that the Executive's employment creates a relationship of confidence and
        trust between the Executive and the Employer with respect to all
        Confidential Information. At all times, both during the Executive's
        employment with the Employer and after its termination, the Executive
        will keep in confidence and trust all such Confidential Information, and
        will not use or disclose any such Confidential Information without the
        written consent of the Employer, except as may be necessary in the
        ordinary course of performing the Executive's duties to the Employer.

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                (c)     DOCUMENTS, RECORDS, ETC. All documents, records, data,
        apparatus, equipment and other physical property, whether or not
        pertaining to Confidential Information, which are furnished to the
        Executive by the Employer or are produced by the Executive in connection
        with the Executive's employment will be and remain the sole property of
        the Employer. The Executive will return to the Employer all such
        materials and property as and when requested by the Employer. In any
        event, the Executive will return all such materials and property
        immediately upon termination of the Executive's employment for any
        reason. The Executive will not retain with the Executive any such
        material or property or any copies thereof after such termination.

                (d)     NONCOMPETITION AND NONSOLICITATION. Without the prior
        written consent of the Board of Directors, during the period that
        Executive is employed by Employer and until the later of (i) one (1)
        year thereafter, or (ii) the end of the Severance Period, the Executive
        (A) will not, directly or indirectly, whether as owner, partner,
        shareholder, consultant, agent, employee, co-venturer or otherwise,
        engage, participate, assist or invest in any Competing Business (as
        hereinafter defined); or (B) will refrain from directly or indirectly
        employing or engaging or attempting to employ or engage any person who
        is an employee of the Employer or recruiting or otherwise soliciting,
        inducing or influencing any person to leave employment with the
        Employer; and (C) will refrain from soliciting or encouraging any
        customer or supplier to terminate or otherwise modify adversely its
        business relationship with the Employer. The Executive understands that
        the restrictions set forth in this Section 7(d) are intended to protect
        the Employer's interest in its Confidential Information and established
        employee, customer and supplier relationships and goodwill, and agrees
        that such restrictions are reasonable and appropriate for this purpose.
        For purposes of this Agreement, the term "Competing Business" shall mean
        any business that provides or intends to provide the same or similar
        types of services or products as those provided or targeted by Employer
        or any of its subsidiaries in any geographic area served or targeted by
        Employer or any of its subsidiaries as of the date of termination.
        Notwithstanding the foregoing, the Executive may own up to two percent
        (2%) of the outstanding stock of a publicly held corporation.
        Notwithstanding anything contained herein that may be interpreted to the
        contrary, in the event that Employer materially breaches any of its
        obligations to pay Termination Benefits, this Section 7(d) shall not
        apply and shall be deemed to be deleted from this Agreement.

                (e)     THIRD-PARTY AGREEMENTS AND RIGHTS. The Executive
        represents to the Employer that the Executive's execution of this
        Agreement, the Executive's employment with the Employer and the
        performance of the Executive's proposed duties for the Employer will not
        violate any obligations the Executive may have to any such previous
        employer or other party. In the Executive's work for the Employer, the
        Executive will not disclose or make use of any information in violation
        of any agreements with or rights of any such previous employer or other
        party, and the Executive will not bring to the premises of the Employer
        any copies or other tangible embodiments of non-public information
        belonging to or obtained from any such previous employment or other
        party.

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                (f)     LITIGATION AND REGULATORY COOPERATION. During and after
        the Executive's employment, the Executive shall cooperate fully with the
        Employer in the defense or prosecution of any claims or actions now in
        existence or which may be brought in the future against or on behalf of
        the Employer which relate to events or occurrences that transpired while
        the Executive was employed by the Employer. The Executive's full
        cooperation in connection with such claims or actions shall include, but
        not be limited to, being available to meet with counsel to prepare for
        discovery or trial and to act as a witness on behalf of the Employer at
        mutually convenient times. During and after the Executive's employment,
        the Executive also shall cooperate fully with the Employer in connection
        with any investigation or review of any federal, state or local
        regulatory authority as any such investigation or review relates to
        events or occurrences that transpired while the Executive was employed
        by the Employer. The Employer shall reimburse the Executive for any
        reasonable out-of-pocket expenses incurred in connection with the
        Executive's performance of obligations pursuant to this Section 7(f) and
        shall pay the Executive for his time at his annual salary rate in effect
        at the time of the termination of his employment.

                (g)     DEVELOPMENTS. Executive will make full and prompt
        disclosure to the Employer of all inventions, discoveries, designs,
        developments, methods, modifications, improvements, processes,
        algorithms, databases, computer programs, formulae, techniques, trade
        secrets, graphics or images, audio or visual works, and other works of
        authorship (collectively "Developments"), whether or not patentable or
        copyrightable, that are created, made, conceived or reduced to practice
        by Executive (alone or jointly with others) or under Executive's
        direction during the period of his employment. Executive acknowledges
        that all work performed by Executive for Employer hereunder is on a
        "work for hire" basis, and Executive hereby assigns and transfers, and
        will assign and transfer, to the Employer and its successors and assigns
        all of Executive's right, title and interest, including but not limited
        to all patents, patent applications, trademarks and trademark
        applications, copyrights and copyright applications, and other
        intellectual property rights in all countries and territories worldwide
        and under any international conventions, in and to all Developments that
        (a) relate to the business of the Employer or any of the products or
        services of the Employer; (b) result from tasks assigned to Executive by
        the Employer; or (c) result from the use of personal property (whether
        tangible or intangible) owned, leased or contracted for by the Employer.

                (h)     INJUNCTION. The Executive agrees that it would be
        difficult to measure any damages caused to the Employer which might
        result from any breach by the Executive of the promises set forth in
        this Section 7, and that in any event money damages would be an
        inadequate remedy for any such breach. Accordingly, subject to Section 8
        of this Agreement, the Executive agrees that if the Executive breaches,
        or threatens to breach, any portion of this Agreement, the Employer
        shall be entitled, in addition to all other remedies that it may have,
        to an injunction or other appropriate equitable relief to restrain any
        such breach without showing or proving any actual damage to the
        Employer.

        8.      ARBITRATION OF DISPUTES. Any controversy or claim arising out of
or relating to this Agreement or the breach thereof or otherwise arising out of
the Executive's employment or

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the termination of that employment (including, without limitation, any claims of
unlawful employment discrimination whether based on age or otherwise) shall, to
the fullest extent permitted by law, be settled by arbitration in any forum and
form agreed upon by the parties or, in the absence of such an agreement, under
the auspices of the American Arbitration Association ("AAA") in Boulder,
Colorado in accordance with the Employment Dispute Resolution Rules of the AAA,
including, but not limited to, the rules and procedures applicable to the
selection of arbitrators. In the event that any person or entity other than the
Executive or the Employer may be a party with regard to any such controversy or
claim, such controversy or claim shall be submitted to arbitration subject to
such other person or entity's agreement. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. This Section
8 shall be specifically enforceable. Notwithstanding the foregoing, this Section
8 shall not preclude either party from pursuing a court action for the sole
purpose of obtaining a temporary restraining order or a preliminary injunction
in circumstances in which such relief is appropriate; PROVIDED, that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 8.

        9.      CONSENT TO JURISDICTION. To the extent that any court action is
permitted consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the State of Colorado.
Accordingly, with respect to any such court action, the Executive (a) submits to
the personal jurisdiction of such courts; (b) consents to service of process;
and (c) waives any other requirement (whether imposed by statute, rule of court,
or otherwise) with respect to personal jurisdiction or service of process.

        10.     INTEGRATION. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements between the parties with respect to any related subject matter.

        11.     ASSIGNMENT; SUCCESSORS AND ASSIGNS, ETC. Neither the Employer
nor the Executive may make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party; PROVIDED, that, subject to the provisions hereof concerning a
Change of Control, the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective executors, administrators,
heirs and permitted successors or assigns.

        12.     ENFORCEABILITY. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

                                       10
<PAGE>


        13.     WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

        14.     NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at 1140 Pearl Street, Boulder, CO
80302, ATTN: Board of Directors, and shall be effective on the date of delivery
in person or by courier or three (3) days after the date mailed.

        15.     AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employer.

        16.     GOVERNING LAW. This is a Colorado contract and shall be
construed under and be governed in all respects by the laws of the State of
Colorado, without giving effect to the conflict of laws principles of such
State.

        17.     COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.

        IN WITNESS WHEREOF, this Agreement has been executed by the Employer and
by the Executive as of the Effective Date.

                                             FRONT PORCH DIGITAL, INC.:



                                             By: /s/ Michael Knaisch
                                                 -------------------------------
                                                 Name:  Michael Knaisch
                                                 Title: President



                                             EXECUTIVE:



                                             /s/ Thomas P. Sweeney III
                                             -----------------------------------
                                             Thomas P. Sweeney III