EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of October 31, 2000, by and between FRONT
PORCH DIGITAL INC., a Nevada corporation (the "Company"), and SAEED KARIM, an
individual residing at 8223 Sawtooth Lane, Longmont, Colorado (the "Employee").


                              W I T N E S S E T H:


     WHEREAS, the Company desires to employ the Employee as its President and
Chief Operating Officer and wishes to acquire and be assured of Employee's
services on the terms and conditions hereinafter set forth; and

     WHEREAS, the Employee desires to be employed by the Company as its
President and Chief Operating Officer, and to perform and to serve the Company
on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual terms, covenants, agreements
and conditions hereinafter set forth, the Company and the Employee hereby agree
as follows:

     1.   EMPLOYMENT. (a) The Company hereby employs the Employee to serve as a
full time employee of the Company, and the Employee hereby accepts such
employment with the Company, for the period set forth in Section 2 hereof.

          (b)  To the best of the Employee's knowledge: (i) the Employee is
under no obligation to any former employer or other party that is in any way
inconsistent with, or that imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this Agreement and
(ii) his performance of all the terms of this Agreement and his employment by
the Company does not and will not breach any agreement to keep in confidence
proprietary information acquired by him in confidence or in trust prior to his
employment by the Company.

     2.   TERM. (a) Unless earlier terminated as provided in this Agreement, the
term of the Employee's employment under this Agreement shall be for a period of
three (3) years beginning November 1, 2000 (the "Effective Date") and ending on
October 31, 2003, unless extended pursuant to paragraph (b) below (such period
or, if the Employee's employment hereunder is earlier terminated, such shorter
period, or if the Employee's employment is extended pursuant to paragraph (b)
below, such longer period, being hereinafter called the "Employment Term").

          (b)  The term of this Agreement shall automatically be extended for an
additional one-year period on November 1, 2003 and on each November 1 thereafter
unless, not later than the April 30 immediately preceding such November 1, the
Company shall have given notice that it does not wish to extend this Agreement
or the Employee shall have notified the Company that he wishes to leave the
employ of the Company on the expiration date of the then current term of this
Agreement.

<PAGE>


     3.   DUTIES.

          (a)  The Employee shall be employed as the President and Chief
Operating Officer of the Company. The Employee shall faithfully and competently
perform such duties at such times and places and in such manner as the Company
may from time to time reasonably direct or such other duties appropriate to a
senior executive managerial position as the Board of Directors or Chief
Executive Officer of the Company shall from time to time determine.

          (b)  Except as may otherwise be approved in writing by the Board of
Directors or Chief Executive Officer of the Company, and except during vacation
periods and reasonable periods of absence due to sickness, personal injury or
other disability, the Employee shall devote his full time throughout the
Employment Term to the services required of Employee hereunder. The Employee
shall render his services exclusively to the Company during the Employment Term
and shall use his best efforts, judgment and energy to improve and advance the
business and interests of the Company in a manner consistent with the duties of
Employee's position.

          (c)  Employee shall be entitled to serve on the Company's Board of
Directors during the Employment Term; PROVIDED, HOWEVER, that his Base Salary
shall constitute consideration for any such service and the Employee shall not
be entitled to any additional compensation in respect of such service on the
Board.

     4.   SALARY AND BONUS.

          (a)  BASE SALARY. In consideration for the services of the Employee
rendered to the Company hereunder, the Company shall pay the Employee a base
salary at an annual rate of One Hundred Eighty Thousand ($180,000.00) during the
Employment Term, payable in regular intervals in accordance with the Company's
payroll practices (the "Base Salary"). The Base Salary will be reviewed at least
annually with Employee's input. Adjustments to Base Salary shall be based on
Employee's performance under the terms of a written personal performance plan
("PPP"), which shall be updated annually with Employee's knowledge and approval.

          (b)  STOCK OPTIONS. On the Effective Date, the Company shall grant
stock options to Employee pursuant to and subject to the terms and conditions of
the 2000 Equity Incentive Plan of the Company to purchase 500,000 shares of
Common Stock, par value $.001 per share (the "Common Stock"), of the Company. Of
such options, options to purchase 100,000 shares shall be at an exercise price
of $2.00 per share and options to purchase 400,000 shares shall be at an
exercise price of $4.00 per share. Such options shall vest in three equal annual
installments, with the first installment vesting on the first anniversary of the
Effective Date, and shall expire on the fifth anniversary of the Effective Date.
All such stock options, whether or not vested, will be subject to forfeiture or
termination in the event of a breach by the Employee of the provisions of
Sections 6 or 8 hereof.

          (c)  BONUSES. The PPP shall include goals (the "Bonusable Goals")
which are reviewed annually with Employee's input and which, if achieved, would
result in a specified bonus of forty percent (40%) of Base Salary (the "Target
Bonus"). The Company shall pay the Employee an additional bonus for achievements
in excess of the Bonusable Goals according to the formula established in the PPP
(the "Overachievement Bonus").

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<PAGE>


          (d)  WITHHOLDING, ETC. The payment of any salary or bonuses hereunder
shall be subject to income tax, social security and other applicable
withholdings, as well as such deductions as may be required under the Company's
employee benefit plans.

     5.   BENEFITS. (a) During the Employment Term, the Employee shall be:

               (i)  eligible to participate in all employee fringe benefits and
any pension and/or profit sharing plans that may be provided by the Company for
its key executive employees in accordance with the provisions of any such plans,
as the same may be in effect on and after the date hereof;

               (ii) eligible to participate in any medical and health plans or
other employee welfare benefit plans that may be provided by the Company for its
key executive employees in accordance with the provisions of any such plans, as
the same may be in effect on and after the date hereof; PROVIDED, HOWEVER, that
the medical and health plans provided by the Company shall be equivalent to a
preferred provider option from a national health care insurance provider;

               (iii) entitled to paid time off each year in accordance with the
Company's standard employee vacation policy, which shall be taken at such time
or times as will not unreasonably hinder or interfere with the Company's
business or operations; and

               (iv) entitled to reimbursement for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in the performance of
the Employee's duties hereunder in accordance with the Company's policies
applicable (on and after the date hereof) thereto.

          (b)  Employee shall cooperate with the Company in the event the
Company wishes to obtain key-man insurance on the Employee. Such cooperation
shall include, but not be limited to, taking any physical examinations that may
be requested by the insurance company.

     6.   INVENTIONS AND CONFIDENTIAL INFORMATION. The Employee hereby
covenants, agrees and acknowledges as follows:

          (a)  The Company is engaged in a continuous program of research,
design, development, production, marketing and servicing with respect to its
businesses.

          (b)  The Employee's employment hereunder creates a relationship of
confidence and trust between the Employee and the Company with respect to
certain information pertaining to the business of the Company and its Affiliates
(as hereinafter defined) or pertaining to the business of any client or customer
of the Company or its Affiliates which may be made known to the Employee by the
Company or any of its Affiliates or by any client or customer of the Company or
any of its Affiliates or learned by the Employee during the period of Employee's
employment by the Company.

          (c)  The Company possesses and will continue to possess information
that has been created, discovered or developed by, or otherwise become known to
it (including, without limitation, information created, discovered or developed
by, or made known to, the Employee during the period of Employee's employment or
arising out of Employee's employment) or in


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<PAGE>


which property rights have been or may be assigned or otherwise conveyed to the
Company, which information has commercial value in the business in which the
Company is engaged and is treated by the Company as confidential.

          (d)  Any and all inventions, products, discoveries, improvements,
processes, manufacturing, marketing and services methods or techniques,
formulae, designs, styles, specifications, data bases, computer programs
(whether in source code or object code), know-how, strategies and data, whether
or not patentable or registrable under copyright or similar statutes, made,
developed or created by the Employee (whether at the request or suggestion of
the Company, any of its Affiliates, or otherwise, whether alone or in
conjunction with others, and whether during regular hours of work or otherwise)
during the period of Employee's employment by the Company which may pertain to
the business, products, or processes of the Company or any of its Affiliates
(collectively hereinafter referred to as "Inventions"), will be promptly and
fully disclosed by the Employee to an appropriate executive officer of the
Company (other than the Employee) without any additional compensation therefor,
all papers, drawings, models, data, documents and other material pertaining to
or in any way relating to any Inventions made, developed or created by Employee
as aforesaid. For the purposes of this Agreement, the term "Affiliate" or
"Affiliates" shall mean any person, corporation or other entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company. For the purposes of this definition, "control" when
used with respect to any person, corporation or other entity means the power to
direct the management and policies of such person or entity, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

          (e)  The Employee will keep confidential and will hold for the
Company's sole benefit any Invention which is to be the exclusive property of
the Company under this Section 6 for which no patent, copyright, trademark or
other right or protection is issued.

          (f)  The Employee also agrees that the Employee will not without the
prior written consent of the Board of Directors or Chief Executive Officer of
the Company (i) use for Employee's benefit or disclose at any time during
Employee's employment by the Company, or thereafter, except to the extent
required by the performance by the Employee of the Employee's duties as an
employee of the Company, any information obtained or developed by Employee while
in the employ of the Company with respect to any Inventions or with respect to
any customers, clients, suppliers, products, employees, financial affairs, or
methods of design, distribution, marketing, service, procurement or manufacture
of the Company or any of its Affiliates, or any confidential matter, except
information which at the time is generally known to the public other than as a
result of disclosure by the Employee not permitted hereunder, or (ii) take with
the Employee upon leaving the employ of the Company any document or paper
relating to any of the foregoing or any physical property of the Company or any
of its Affiliates.

          (g)  The Employee acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 6 would be
inadequate and, therefore, agrees that the Company and its Affiliates shall be
entitled to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach; PROVIDED, HOWEVER,
that nothing contained herein shall be construed as prohibiting the Company or
any of its Affiliates from pursuing any other rights and remedies available for
any such breach or threatened breach.

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<PAGE>


          (h)  The Employee agrees that upon termination of Employee's
employment by the Company for any reason, the Employee shall immediately return
to the Company all documents and other property in Employee's possession
belonging to the Company or any of its Affiliates.

          (i)  Without limiting the generality of Section 9 hereof, the Employee
hereby expressly agrees that the foregoing provisions of this Section 6 shall be
binding upon the Employee's heirs, successors and legal representatives.

     7.   TERMINATION. (a) The Employee's employment hereunder shall be
terminated upon the occurrence of any of the following:

               (i)  death of the Employee;

               (ii) termination of the Employee's employment hereunder by the
Employee at any time for any reason whatsoever (including, without limitation,
resignation or retirement) other than for "good reason" as contemplated by
clause (v)(B) below;

               (iii) termination of the Employee's employment hereunder by the
Company because of the Employee's inability to perform Employee's duties on
account of disability (where no reasonable accommodation would permit Employee
to perform the essential functions of his job or incapacity) for a period of
ninety (90) or more days, whether or not consecutive, occurring within any
period of twelve (12) consecutive months;

               (iv) termination of the Employee's employment hereunder by the
Company at any time for "cause" (as hereinafter defined), such termination to
take effect immediately upon written notice from the Company to the Employee;
and

               (v)  termination of the Employee's employment hereunder (A) by
the Company at any time, other than termination by reason of disability or
incapacity as contemplated by clause (iii) above or termination by the Company
for "cause" as contemplated by clause (iv) above and (B) by the Employee for
"good reason" (as hereinafter defined).

          The following actions, failures or events shall constitute "cause" for
termination within the meaning of clause (iv) above: (i) the Employee's
conviction of, admission of guilt to or plea of NOLO CONTENDERE or similar plea
(which, through lapse of time or otherwise, is not subject to appeal) with
respect to any crime or offense that constitutes a felony in the jurisdiction
involved; (2) acts constituting fraud or breach of fiduciary duty against the
Company which are materially detrimental to the Company, (3) failure by the
Employee to obey the reasonable and lawful orders of the Board of Directors or
Chief Executive Officer of the Company, (4) any act by the Employee in violation
of Section 8 hereof, any statement or disclosure by the Employee in violation of
Section 6 hereof, or any material breach by the Employee of a representation or
warranty contained in Section 1(b) hereof; (5) excessive absenteeism (other than
by reason of disability) after written notice from the Board of Directors or
Chief Executive Officer of the Company of prior similar actions; (6) excessive
alcoholism or addiction to drugs not prescribed by a qualified physician (other
than by reason of disability) after written notice from the Board of Directors
or Chief Executive Officer of the Company of prior similar actions; (7) gross


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<PAGE>


negligence by the Employee in the performance of, or willful disregard by the
Employee of, the Employee's obligations hereunder.

          The following actions, failures or events shall constitute "good
reason" within the meaning of clause (V)(B) above: (1) a material breach by the
Company of its obligations under this Agreement, (2) a material diminution of
the Employee's responsibilities or authority hereunder, (3) a decision by the
Board of Directors of the Company not to engage in the Business (as that term is
defined in the Asset Purchase Agreement dated as of October 10, 2000 between the
Company and Storage Technology Corporation, and (4) a decrease in a one-year
period of ten percent (10%) or more in either the Employee's Base Salary or the
maximum bonus percentage that may be paid to Employee unless the same such
decrease(s) is imposed equally upon all members of the Company's executive
management team.

          The following circumstances shall constitute satisfactory grounds for
departure of the Employee from the Company without constituting a breach of this
Agreement; PROVIDED, HOWEVER, that the Employee shall in all events continue to
be subject to the continuing obligation of sections 6 and 8: (A) the departure
of more than fifty percent (50%) of the members of the Company's Board of
Directors within a one-year period; (B) the failure of the Employee and the
Company to agree on Bonusable Goals; (C) a decision by the Company to remove the
Employee from the Company's Board of Directors; and (D) a corporate
reorganization (defined as either a change in the effective control of the
Company or a downsizing of more than forty percent (40%) of the employees of the
Company during a period of one year.)

          (b)  In the event that Employee's employment is terminated by the
Company for any reason other than "cause," or the Employee's employment is
terminated by the Employee for "good reason" (the `Triggering Events'), then (i)
all options granted to the Employee under Section 4(b) hereof which have not
vested shall immediately vest, and (ii) the Company immediately shall pay to the
Employee a payment (the "Separation Payment") determined as follows. If the
Triggering Event occurs more than one (1) year before the end of the current
term of this Agreement, then the Company shall pay to the Employee an amount
equal to the Base Salary to which Employee would have been entitled during the
remainder of the then-current term of this Agreement had the Employee not been
terminated, plus a bonus equal to the Target Bonus the Employee would have been
paid had he achieved his Bonusable Goals for that year and had continued to
achieve the same Bonusable Goals throughout the remainder of the then-current
term of this Agreement. If a Triggering Event occurs one (1) year or less before
the end of the then-current term of this Agreement, then the Company shall pay
to the Employee an amount equal to the Base Salary at the then-current rate,
plus a bonus equal to the Target Bonus the Employee would have been paid had he
achieved his Bonusable Goals for that year.

          (c)  Notwithstanding anything to the contrary expressed or implied
herein, except as required by applicable law and except as set forth in
paragraph (b) above, the Company (and its Affiliates) shall not be obligated to
make any payments to the Employee or on the Employee's behalf of whatever kind
or nature by reason of the Employee's cessation of employment (including,
without limitation, by reason of termination of the Employee's employment by the
Company for "cause"), other than (i) such amounts, if any, of the Employee's
salary and bonus as shall have accrued and remained unpaid as of the date of
said cessation and (ii) such other amounts which may be then otherwise payable
to the Employee from the Company's benefits plans or reimbursement policies, if
any.

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<PAGE>


          (d)  No interest shall accrue on or be paid with respect to any
portion of any payments hereunder.

     8.   NON-COMPETITION. (a) The term "Non-Compete Term" shall mean the period
during which Employee is employed hereunder and the one-year period thereafter.

     During the Non-Compete Term:

               (i) the Employee will not make any statement or perform any act
intended to advance an interest of any direct competitor of the Company or any
of its Affiliates in any way that will or may injure an interest of the Company
or any of its Affiliates in its relationship and dealings with existing
customers or clients, or knowingly solicit or encourage any other employee of
the Company or any of its Affiliates to do any act that is disloyal to the
Company or any of its Affiliates or inconsistent with the interest of the
Company or any of its Affiliate's interests or in violation of any provision of
this Agreement;

               (ii) the Employee will not discuss with any customers or clients
of the Company or any of its Affiliates the present or future availability of
services or products of a business, if the Employee has or expects to acquire a
proprietary interest in such business or is or expects to be an employee,
officer or director of such business, where such services or products are
directly competitive with services or products which the Company or any of its
Affiliates provides;

               (iii) the Employee will not make any statement or do any act
intended to cause any customers or clients of the Company or any of its
Affiliates to make use of the services or purchase the products of any directly
competitive business in which the Employee has or expects to acquire a
proprietary interest or in which the Employee is or expects to be made an
employee, officer or director, if such services or products directly compete
with the services or products sold or provided or expected to be sold or
provided by the Company or any of its Affiliates to any customer or client; and

               (iv) the Employee will not directly or indirectly (as a director,
officer, employee, manager, consultant, independent contractor, advisor or
otherwise) engage in direct competition with, or own any interest in, perform
any services for, participate in or be connected with (i) any business or
organization which engages in direct competition with the Company or any of its
Affiliates in any geographical area where any business is presently carried on
by the Company or any of its Affiliates, or (ii) any business or organization
which engages in direct competition with the Company or any of its Affiliates in
any geographical area where any business shall be hereafter, during the period
of the Employee's employment by the Company, carried on by the Company or any of
its Affiliates, if such business is then being carried on by the Company or any
of its Affiliates in such geographical area; PROVIDED, HOWEVER, that the
provisions of this Section 8(a) shall not be deemed to prohibit the Employee's
ownership of not more than one percent (1%) of the total shares of all classes
of stock outstanding of any publicly held company. At the end of the Employee's
employment, if any, the Company, in good faith, shall provide to the Employee a
list of the Company's then-existing direct competitors, Affiliates, customers,
businesses, organizations and others to which this Section 8 refers.

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<PAGE>


          (b)  During the Non-Compete Term, the Employee will not directly or
indirectly hire, engage, send any work to, place orders with, or in any manner
be associated with any supplier, contractor, subcontractor or other person or
firm which rendered manufacturing or other services, or sold any products, to
the Company or any of its Affiliates if such action by Employee would have a
material adverse effect on the business, assets or financial condition of the
Company or any of its Affiliates.

          (c)  In connection with the foregoing provisions of this Section 8,
the Employee represents that Employee's experience, capabilities and
circumstances are such that such provisions will not prevent Employee from
earning a livelihood. The Employee further agrees that the limitations set forth
in this Section 8 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the businesses of the Company and its Affiliates. It is understood and agreed
that the covenants made by the Employee in this Section 8 (and in Section 6
hereof) shall survive the expiration or termination of this Agreement.

          (d)  For purposes of this Section 8, proprietary interest in a
business is ownership, whether through direct or indirect stock holdings or
otherwise, of one percent (1%) or more of such business.

          (e)  The Employee acknowledges and agrees that a remedy at law for any
breach or threatened breach of the provisions of this Section 8 would be
inadequate and, therefore, agrees that the Company and any of its Affiliates
shall be entitled to injunctive relief in addition to any other available rights
and remedies in cases of any such breach or threatened breach; PROVIDED,
HOWEVER, that nothing contained herein shall be construed as prohibiting the
Company or any of its Affiliates from pursuing any other rights and remedies
available for any such breach or threatened breach.

     9.   NON-ASSIGNABILITY. (a) Neither this Agreement nor any right or
interest hereunder shall be assignable by the Employee, Employee's
beneficiaries, or legal representatives without the Company's prior written
consent; PROVIDED, HOWEVER, that nothing in this Section 9(a) shall preclude the
Employee from designating a beneficiary to receive any benefit payable hereunder
upon Employee's death or incapacity.

          (b)  Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

     10.  BINDING EFFECT. Without limiting or diminishing the effect of Section
9 hereof, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, successors, legal representatives and
assigns.

         11.  NOTICE.  Any notice  required or  permitted to be given under this
Agreement  shall be sufficient  if in writing and either  delivered in person or
sent by first class certified or registered  mail,  postage  prepaid,  if to the
Company,  at  the  Company's  principal  place  of  business,  attention:  Chief
Executive  Officer (with a copy to Pryor  Cashman  Sherman & Flynn LLP, 410 Park
Avenue, New York, New York 10022,  Attention:  Eric M. Hellige, Esq.), and if to

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<PAGE>


the  Employee,  at  Employee's  home address set forth  above,  or to such other
address or  addresses as either  party shall have  designated  in writing to the
other party hereto.

     12.  SEVERABILITY. The Employee agrees that in the event that any court of
competent jurisdiction shall finally hold that any provision of Section 6 or 8
hereof is void or constitutes an unreasonable restriction against the Employee,
such provision shall not be rendered void but shall apply with respect to such
extent as such court may judicially determine constitutes a reasonable
restriction under the circumstances. If any part of this Agreement other than
Section 6 or 8 is held by a court of competent jurisdiction to be invalid,
illegible or incapable of being enforced in whole or in part by reason of any
rule of law or public policy, such part shall be deemed to be severed from the
remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of this Agreement
shall in every other respect continue in full force and effect and no covenant
or provision shall be deemed dependent upon any other covenant or provision.

     13.  WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.

     14.  ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the entire
and final expression of the agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, oral and written, between the
parties hereto with respect to the subject matter hereof. This Agreement may be
modified or amended only by an instrument in writing signed by both parties
hereto.

     15.  APPLICABLE LAW AND VENUE. This Agreement shall be interpreted and
construed in accordance with the laws of the State of Colorado, without regard
to its conflicts of law provisions. Any action to enforce the terms of this
Agreement shall be brought in a court of proper jurisdiction within the State of
Colorado.

     16.  COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     17.  SURVIVAL. The termination of Employee's employment hereunder shall not
affect the enforceability of Sections 6 or 8.

     18.  FURTHER ASSURANCES. The parties agree to execute and deliver all such
further instruments and take such other and further action as may be reasonably
necessary or appropriate to carry out the provisions of this Agreement.

     19.  HEADINGS. The Section headings appearing in this Agreement are for
purposes of easy reference and shall not be considered a part of this Agreement
or in any way modify, amend or affect its provisions.

     20.  FACSIMILE SIGNATURES. Facsimile signatures will be accepted as
originals.

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<PAGE>


               IN WITNESS WHEREOF, the Company and the Employee have duly
          executed and delivered this Agreement as of the day and year first
          above written.

                                             FRONT PORCH DIGITAL INC.


                                             By: /s/ TIMOTHY PETRY
                                             -----------------------------------
                                                 Name: Timothy Petry
                                                 Title: Chief Financial Officer




                                             /s/ SAEED KARIM
                                             -----------------------------------
                                                 SAEED KARIM

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