Document:

EXH. 10.1

                                                               EXECUTION COPY

                            ASSET PURCHASE AGREEMENT

                          DATED AS OF OCTOBER 10, 2000

                                 BY AND BETWEEN

                            FRONT PORCH DIGITAL INC.

                                       AND

                         STORAGE TECHNOLOGY CORPORATION

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                                Table of Contents
                           (Not part of the Agreement)
                                                                       PAGE NO.

ARTICLE I  CERTAIN DEFINITIONS................................................1
ARTICLE II  PURCHASE AND SALE OF ASSETS; PURCHASE PRICE.......................8
   2.01     Sale of the Acquired Assets.......................................8
   2.02     Excluded Assets...................................................9
   2.03     Liabilities.......................................................9
   2.04     Purchase Price...................................................10
   2.05     Purchase Price Adjustment........................................10
   2.06     Treatment of Purchase Price......................................11
ARTICLE III  CLOSING AND PAYMENT OBLIGATION..................................12
   3.01     Closing..........................................................12
   3.02     Deliveries by Seller.............................................12
   3.03     Deliveries by Purchaser..........................................13
ARTICLE IV  ADDITIONAL AGREEMENTS............................................14
   4.01     Agreement Not to Compete and to Maintain Confidentiality.........14
   4.02     Investigation....................................................16
   4.03     Conduct of the Business Pending the Closing......................17
   4.04     Taxes, Fees and Expenses.........................................19
   4.05     Employees........................................................19
   4.06     Purchaser to be Exclusive Provider...............................20
   4.07     Maintenance of Books and Records.................................21
   4.08     Bulk Sales Law...................................................21
   4.09     [Reserved].......................................................21
   4.10     Website links....................................................21
   4.11     Further Cooperation..............................................21
   4.12     Continued Commission Payments by the Seller and Related Matters..21
   4.13     Purchaser's Board of Directors...................................23
   4.14     Software Escrow Agreement........................................23
   4.15     The Seller's Employees...........................................23
   4.16     Continuing Use of Information....................................23
   4.17     Effect of Release Event..........................................24
   4.18     License to use Non-Business Software Products....................24
ARTICLE V  REPRESENTATIONS AND WARRANTIES OF THE SELLER......................24
   5.01     Organization.....................................................24
   5.02     Investment Representations.......................................24
   5.03     Authorization....................................................25
   5.04     Valid and Binding................................................25
   5.05     No Violation.....................................................25
   5.06     Consents and Approvals...........................................26
   5.07     Financial Data...................................................26
   5.08     Interim Operations...............................................26
   5.09     Undisclosed Liabilities..........................................27
   5.10     Taxes............................................................28

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                                Table of Contents
                           (Not part of the Agreement)

                                                                       PAGE NO.

   5.11     Condition of Property............................................28
   5.12     Contracts and Commitments........................................28
   5.13     Intellectual Property and Technology.............................29
   5.14     Title to the Acquired Assets.....................................31
   5.15     Environmental Matters............................................31
   5.16     [Reserved].......................................................32
   5.17     Employees and Labor Relations....................................32
   5.18     Licenses; Permits................................................33
   5.19     Litigation.......................................................33
   5.20     Court Orders, Decrees, and Laws..................................33
   5.21     [Reserved].......................................................33
   5.22     Customers........................................................33
   5.23     Post June 2000 Revenue...........................................33
   5.24     Broker's Fees....................................................33
   5.25     Related-Party Transactions.......................................34
ARTICLE VI  REPRESENTATIONS AND WARRANTIES OF PURCHASER......................34
   6.01     Corporate Organization; Due Authorization........................34
   6.02     Capitalization...................................................34
   6.03     Authority and Validity...........................................35
   6.04     Financial Statements.............................................35
   6.05     Proprietary Rights...............................................35
   6.06     Material Contracts and Obligations...............................35
   6.07     Consents and Approvals of Governmental Authorities...............36
   6.08     No Violation.....................................................36
   6.09     Compliance with Other Instruments................................36
   6.10     Registration Rights..............................................36
   6.11     Board of Directors...............................................36
   6.12     Employee Compensation Plans......................................37
   6.13     Broker's Fees....................................................37
   6.14     Litigation.......................................................37
   6.15     Employees of the Seller..........................................37
   6.16     Disclosure.......................................................37
   6.17     Environmental Matters............................................37
ARTICLE VII  CONDITIONS OF CLOSING; CERTAIN COVENANTS........................38
   7.01     Conditions Precedent to the Obligations of Purchaser Hereunder...38
   7.02     Conditions Precedent to the Obligations of the Seller Hereunder..39
ARTICLE VIII  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION....40
   8.01     Survival of Representations and Warranties.......................40
   8.02     Notice of Damages................................................40
   8.03     Agreements to Indemnify..........................................41

                                       ii
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                                Table of Contents
                           (Not part of the Agreement)

                                                                       PAGE NO.

   8.04     Conditions of Indemnification of Third Party Claims..............41
   8.05     Limitations on Indemnification...................................42
ARTICLE IX  TERMINATION......................................................43
   9.01     Termination of Agreement.........................................43
   9.02     Effect of Termination............................................43
ARTICLE  X  MISCELLANEOUS PROVISIONS.........................................44
   10.01    Expenses.........................................................44
   10.02    Notices..........................................................44
   10.03    Binding; No Assignment...........................................45
   10.04    Severability.....................................................45
   10.05    Governing Law; Consent to Jurisdiction and Venue.................45
   10.06    Counterparts.....................................................46
   10.07    Headings.........................................................46
   10.08    Entire Agreement; Amendment; Waiver..............................46
   10.09    Third Parties....................................................46
   10.10    Publicity........................................................46
   10.11    No Presumption...................................................46
   10.12    Gender; Tense, Etc...............................................47
   10.13    Reference to Days................................................47

                                      iii
<PAGE>

                                    EXHIBITS
                                    --------

Exhibit 3.02(a)       Form of Bill of Sale for Tangible Property
Exhibit 3.02(b)       Form of Bill of Sale for Intangible Property
Exhibit 3.02(c)       Form of Assignment and Assumption Agreement
Exhibit 3.02(h)       Form of Transition Services Agreement
Exhibit 3.03(e)(i)    Form of Employment Agreement for Dr. Giancarlo Gaggero
Exhibit 3.03(e)(ii)   Form of Employment Agreement for Edward Ladd
Exhibit 3.03(h)       Form of Registration Rights Agreement

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<PAGE>

SCHEDULES

Schedule 1.01(a) Owned Tangible Property
Schedule 1.01(b) Leased Tangible Property
Schedule 1.01(c) Inventory
Schedule 1.01(d) Prepaid Expenses and Deposits
Schedule 1.01(e) Intellectual Property
Schedule 1.01(f) Subsisting Contracts
Schedule 2.03(a) Assumed Liabilities
Schedule 2.04(b) Stock Legends
Schedule 2.05(a) Seller's Closing Statement
Schedule 3.02(i) List of Revenues Invoiced or Invoice Requested
Schedule 4.05    List of Employees
Schedule 5.07    Financial Data
Schedule 5.08    Interim Operations
Schedule 5.12    Contracts & Commitments (Exceptions)
Schedule 5.13    Intellectual Property and Technology
Schedule 5.17(b) Employees and Labor Relations (Employees)
Schedule 6       Purchaser Disclosures

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<PAGE>

     ASSET PURCHASE AGREEMENT, dated as of October 10, 2000, by and between
FRONT PORCH DIGITAL INC., a Nevada corporation ("Purchaser"), and STORAGE
TECHNOLOGY CORPORATION, a Delaware corporation ("the Seller").

     WHEREAS, a discrete business of the Seller is providing media conversion
and other media-related services, including, but not limited to, tape, disk and
optical recovery, duplication, data conversion and archiving services; and

     WHEREAS, the Seller desires to sell and Purchaser desires to purchase
substantially all of the assets used and useful in the operation of such
business upon the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein,
intending to be legally bound hereby, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS
                               -------------------

     As used in this Agreement each of the following terms shall have the
following meaning:

     "ACQUIRED ASSETS" shall mean the following assets, properties and rights of
the Seller pertaining to the Business, with such additions thereto or deletions
therefrom as may be permitted by the terms of this Agreement:

        (a) the Owned Tangible Property relating to the Business, as listed and
described on SCHEDULE 1.01(a) hereto, and the Seller's rights under all related
warranties;

        (b) all of the Seller's interest in the Leased Tangible Property
relating to the Business, as listed and described on SCHEDULE 1.01(b) hereto;

        (c) the inventory of the Seller relating to the Business, as listed and
described on SCHEDULE 1.01(c) hereto (the "Inventory");

        (d) the prepaid expenses and deposits relating to the Business, as
listed and described on SCHEDULE 1.01(d) hereto;

        (e) the Intellectual Property of the Seller relating to the Business
(other than the Non-Business Software Products), as listed and described on
SCHEDULE 1.01(e) hereto, all of the Seller's right, title and interest in, to
and under the Licensed Intellectual Property relating to the Business, as listed
and described on Schedule 1.01(e) hereto and the right to use the Non-Business
Software Products currently used in the Business, as listed and described on
SCHEDULE 1.01(e);
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        (f) all of the Seller's rights and interest in, to and under the
Subsisting Contracts relating to the Business, as listed on SCHEDULE 1.01(f),
including without limitation the rights to the revenues described in
subparagraph (k) in this definition of Acquired Assets;

        (g) all customer, lead, mailing, circulation, purchaser and all other
lists, correspondence and other files, computerized records and related
documentation used in connection therewith, accounts, books and records relating
to the Business and located at the headquarters of the Business in Houston,
Texas (including without limitation those relating to (x) the Transferred
Employees, (y) the purchase of materials, supplies or services relating to the
Business, and (z) the production and sale of products or services));

        (h) all claims (including but not limited to claims under the Seller's
insurance policies), causes of action and choses in action of the Seller arising
primarily from or relating primarily to the Business;

        (i) [Reserved]

        (j) [Reserved]

        (k) all revenues, including development fees, generated by and allocable
to the Business and recognizable by the Seller under accrual-based accounting
procedures from and including July 1, 2000 to and including the Closing Date and
allocable to work performed by the Seller after June 30, 2000, whether from
contracts signed or projects commenced before or after July 1, 2000 or
otherwise; provided, however, that Purchaser shall not be entitled to any
revenues generated prior to the Closing Date by the "Intel Phase II" project;
and

        (l) any and all proceeds arising from casualty insurance claims relating
to the Acquired Assets paid to the Seller on or after the date hereof.

     "AFFILIATE" shall mean an affiliate of a Person, as the term "affiliate" is
defined in the rules and regulations promulgated under the Securities Act of
1933, as amended.

     "AGREEMENT" shall mean this Asset Purchase Agreement and all schedules and
exhibits hereto.

     "ASSUMED LIABILITIES" shall have the meaning ascribed to such term in
Section 2.03(a).

     "AUDIT" shall mean any audit, assessment of Taxes, any other examination or
claim by any Tax Authority, judicial, administrative or other proceeding or
litigation (including any appeal of any such judicial, administrative or other
proceeding or litigation) relating to Taxes and/or Tax Returns.

     "BANKRUPTCY EXCEPTIONS" as such term relates to the enforceability of any
agreement or commitment, shall have the meaning ascribed to such term in Section
5.04.

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<PAGE>

     "BENEFIT PLANS" shall mean employee benefit plans under Section 3(3) of
ERISA and any other employment, consulting, bonus, deferred compensation,
incentive compensation, severance, termination or post-employment pay,
disability, hospitalization or other medical, dental, vision, life or other
insurance, stock purchase, stock option, stock appreciation, stock award,
pension, profit sharing, 401(k) or retirement plan, agreement or arrangement,
and each other employee benefit plan or arrangement arising out of the
employment or the termination of an employee, former employee, retiree or sales
personnel by the Seller, whether written or oral, tax-qualified under the Code
or non-qualified, whether covered by ERISA or not, maintained or contributed to
by the Seller covering its employees, former employees, retirees or sales
personnel.

     "BUSINESS" shall mean the media services business of Seller, the
headquarters of which is located at 5833 Westview Drive, Houston, Texas 77055,
and which includes approximately 20 full-time employees; such business includes
(i) the provision of various services to customers (including the Seller)
relating to data storage media both in the United States and in other countries,
such as conversion of data from one type of media to another, duplication of
data, data refreshing and data archiving, and (ii) the development, use and
support of software and other tools that are used to perform such services.

     "CHANGE OF CONTROL" shall mean any of the following events: (i) a merger or
consolidation of Purchaser with or into another company, with respect to which
less than a majority of the outstanding voting power of the surviving or
consolidated company is held by stockholders of Purchaser immediately prior to
such event, (ii) the sale or transfer of all or substantially all of the
properties and assets of Purchaser and its consolidated subsidiaries, (iii) any
purchase by any party (or group of affiliated parties) of shares of capital
stock of Purchaser (either through a negotiated stock purchase or a tender for
such shares), the effect of which is that such party (or group of affiliated
parties) that did not beneficially own a majority of the voting power of the
outstanding shares of capital stock of Purchaser immediately prior to such
purchase beneficially owns at least a majority of such voting power immediately
after such purchase or (iv) the redemption or repurchase of shares representing
a majority of the voting power of the outstanding shares of capital stock of
Purchaser.

     "CLOSING" shall have the meaning ascribed to such term in Section 3.01.

     "CLOSING DATE" shall have the meaning ascribed to such term in Section
3.01.

     "CLOSING STATEMENT" shall mean a statement of Net Assets of the Business,
prepared in accordance with generally accepted accounting principles
consistently applied.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     "COMPUTER EQUIPMENT" shall mean the computer equipment, devices and
accessories (including personal computers, workstations, servers, data
processing hardware and related telecommunications equipment, media and tools)
used in the Business.

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<PAGE>

     "DAMAGES" shall have the meaning ascribed to such term in Section 8.03(a).

     "EMPLOYEE" shall have the meaning ascribed to such term in Section 5.17(b).

     "ENCUMBRANCE" shall mean any claim, mortgage, pledge, lien, security or
other third party right or interest of any kind whatsoever, conditional sales
agreement, option, encumbrance or charge of any kind affecting real or personal
property.

     "ENVIRONMENTAL CLAIMS" shall mean any and all claims, actions, causes of
action, or other written notices by any Person or entity alleging potential
liability (including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or civil or criminal penalties) arising out
of or resulting from (i) circumstances forming the basis of any violation of any
Environmental Laws or (ii) any releases of Hazardous Materials at any real or
personal property presently or formerly owned, leased or managed by the Seller
or at any disposal facility which may have received Hazardous Materials
generated by the Seller.

     "ENVIRONMENTAL LAWS" shall mean any applicable federal, state, local or
foreign law, treaty, judicial decision, regulation, rule, judgment, order,
decree, injunction, permit or governmental restriction, each as in effect on or
prior to the Closing Date, relating to the environment, safety or health.

     "ENVIRONMENTAL PERMITS" shall mean Permits required by Environmental Laws.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.

     "EXCLUDED ASSETS" shall have the meaning ascribed to such term in Section
2.02.

     "EXCLUDED BENEFIT PLANS" shall have the meaning ascribed to such term in
Section 2.02(b).

     "EXCLUDED LIABILITIES" shall have the meaning ascribed to such term in
Section 2.03(b).

     "FINANCIAL DATA" shall have the meaning ascribed to such term in Section
5.07.

     "FINANCIAL STATEMENTS" shall have the meaning ascribed to such term in
Section 6.04.

     "FRONT PORCH COMMON STOCK" shall have the meaning ascribed to such term in
Section 2.04(b).

     "HAZARDOUS MATERIALS" shall include (a) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or

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<PAGE>

hazardous substance, extremely hazardous substance or chemical, hazardous waste,
biohazardous or infectious waste, special waste, or solid waste under
Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) polychlorinated biphenyls; (d) any substance exhibiting a
hazardous waste characteristic including but not limited to corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (e) any asbestos-containing materials.

     "INTELLECTUAL PROPERTY" shall mean all intellectual property and all rights
therein, whether common law, statutory or otherwise, domestic and foreign, and
all registrations and registration applications for any such rights, including
without limitation:

        (a) United States Letter Patent, any patents, reissues, divisions,
continuations, continuations-in-part, reexaminations, renewals, extensions and
substitutes thereof, any applications thereof, and all foreign counterparts
thereof (including, in the case of patent applications, international or
multi-national applications filed in accordance with Chapter II of the Patent
Cooperation Treaty or any other multi-lateral agreement);

        (b) service marks, trademarks, trade names, brands, product and service
names, logos and other distinctive identifications used in commerce, whether in
connection with products or services, together with all goodwill related to any
of the foregoing;

        (c) copyrights;

        (d) computer programs, computer databases, software and related systems
(including, in all cases, both source and object code) and other Technology and
the copyright in any fixations of the Technology; and

        (e) Proprietary Information and the copyright in any fixations of the
Proprietary Information.

     "INVENTORY" shall have the meaning ascribed to such term in the definition
of Acquired Assets in Article I.

     "LEASED TANGIBLE PROPERTY" shall mean Computer Equipment and other
machinery, furniture, equipment and other tangible personal property that is
subject to a leasehold interest held by the Seller.

     "LICENSED INTELLECTUAL PROPERTY" shall mean Intellectual Property that the
Seller uses or has the right to use pursuant to Third Party Licenses.

     "MATERIAL ADVERSE EFFECT" shall mean an effect on the business, financial
condition or results of operations of the Seller which effect, either
individually or when aggregated with other such effects, is adverse and
material.

     "NET ASSETS" shall have the meaning provided such term in Section 2.05(c).

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<PAGE>

     "NON-BUSINESS SOFTWARE PRODUCTS" shall mean the software owned by the
Seller, including the internal microcode that is imbedded in the Seller's
hardware products, that is licensed by the Seller to others outside of the
Business.

     "NON-OWNED INTELLECTUAL PROPERTY" shall mean (a) Licensed Intellectual
Property and (b) Intellectual Property that is publicly available for use
without restriction or obligation of any kind to any other Person.

     "OFFERING MEMORANDUM" shall have the meaning provided such term in Section
5.02(d).

     "OWNED INTELLECTUAL PROPERTY" shall mean Intellectual Property (i) created
or developed by employees of the Seller or (ii) to which the Seller has
acquired, by purchase, assignment or other transfer the unconditional,
unrestricted, exclusive right to control or prevent any and all use of such
Intellectual Property by others without the consent or approval of or payment
to, any other Person.

     "OWNED TANGIBLE PROPERTY" shall mean Computer Equipment and other
machinery, furniture, equipment and other tangible personal property owned by
the Seller.

     "PERMIT" shall mean any license, franchise, permit, consent, order,
approval, authorization or registration from, of or with a governmental entity.

     "PERSON" shall mean an individual, partnership, corporation, limited
liability company, association, joint stock company, trust, joint venture,
unincorporated organization and governmental entity or any department, agency or
political subdivision thereof.

     "POST CLOSING PAYMENT" shall have the meaning provided such term in Section
2.05(d).

     "PROPRIETARY INFORMATION" shall mean technical, commercial, marketing or
other information, data and material of the kind normally considered to be
confidential or proprietary in nature, including without limitation, any
process, design, formula, know-how, information, invention, trade secret,
Technology, or research, marketing or other data which has not entered the
public domain.

     "PURCHASE PRICE" shall have the meaning provided such term in Section 2.04.

     "REAL PROPERTY" means the real property subject to the Real Property Lease
and Seller's leasehold interest in such property.

     "REAL PROPERTY LEASE" shall have the meaning ascribed to such term in
Section 5.12(b).

     "RELATED DOCUMENTS" shall mean all other agreements, instruments, documents
and certificates to be executed and delivered pursuant to this Agreement.

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<PAGE>

     "RELEASE" shall mean any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping, or disposing of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into the
environment in violation of any applicable Environmental Law.

     "RELEASE EVENT" shall have the meaning provided such term in Section 4.14.

     "REPRESENTATIVES" shall mean, with respect to any Person, such Person's
attorneys, accountants or other agents or employees.

     "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

     "SOFTWARE PRODUCTS" shall mean the computer software programs licensed by
the Seller to others as part of the Business.

     "SUBSIDIARY" shall mean with respect to any Person, each entity of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.

     "SUBSISTING CONTRACT" shall mean any contract, agreement, commitment, lease
or restriction of any kind to which the Seller is a party or by which the Seller
is bound or to which any of the Seller's assets are subject, including without
limitation Third Party Licenses and Benefit Plans.

     "TANGIBLE PROPERTY" shall mean the Owned Tangible Property and the Leased
Tangible Property.

     "TANGIBLE PROPERTY LEASES" shall mean any Subsisting Contract granting a
right to use Leased Tangible Property.

     "TAX" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, wage, employment, excise, utility, communications,
production, occupancy, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, capital levy, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including, without limitation, penalties, additions to tax, and interest
attributable thereto (together with any interest on any such interest, penalties
and additions to tax).

     "TAX AUTHORITY" shall mean the Internal Revenue Service ("IRS") and any
other domestic or foreign authority responsible for the administration of any
Taxes.

     "TAX LAWS" shall mean the Code, federal, state, county, local or foreign
laws related to Taxes and any regulations or official administrative
pronouncements released thereunder.

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<PAGE>

     "TAX RETURNS" shall mean all original and amended federal, state, local and
foreign tax returns, declarations, statements, reports, schedules, forms and
information returns relating to Taxes.

     "TAXABLE PERIOD" means any taxable year or any other period that is treated
as a taxable year with respect to which any Tax may be imposed under any
applicable statute, rule or regulation.

     "TECHNOLOGY" shall mean all formulae; algorithms; processes; procedures;
designs; ideas; concepts; strategic, business and other plans; research;
inventions and invention disclosure (whether patentable or unpatentable); and
all records of the foregoing, including without limitation, any laboratory
notes; test, engineering and technical data, know-how, proprietary information
and methodologies; trade secrets; technology; communications and associated
peripheral devices and resources; computer software, programs and code, both
object and source, in whatever form and media; databases; specifications,
software manuals and program documentation (including, but not limited to,
functional overviews, screen layouts, record layouts, design specifications,
standard designs, user documentation, feature specifications, code and design
documents, current buy lists (fixed and unfixed) and training material and any
other information reasonably necessary to allow a programmer of ordinary skill
to install, maintain and enhance the relevant source code on a computer server
and transform such source code into an executable form for operation in
accordance with its specification); and other information processing tangible
and intangible items.

     "THIRD PARTY LICENSE" shall mean licenses, agreements, obligations or other
commitments under which a Person has granted the Seller a right to use any
Licensed Intellectual Property in connection with the Business but retains one
or more rights to use such Intellectual Property, including without limitation
those Third Party Licenses listed and described on SCHEDULE 1.01(E) hereto.

     "TRANSFERRED EMPLOYEE" shall mean any Employee that accepts the offer of
employment by Purchaser on the Closing Date.

                                   ARTICLE II
                  PURCHASE AND SALE OF ASSETS; PURCHASE PRICE
                  -------------------------------------------

     2.01 SALE OF THE ACQUIRED ASSETS.

        (a) Subject to the terms and conditions of this Agreement, the Seller
shall sell, transfer, convey, assign and deliver to Purchaser, and relinquish
exclusively to Purchaser in perpetuity, the Acquired Assets at the Closing.

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<PAGE>

        (b) It is the intention of the parties that, from and after the Closing
Date, Purchaser shall:

                (i) receive and be entitled to exercise in full all rights and
        benefits pertaining to the Acquired Assets and perform all other such
        acts in relation thereto as Purchaser, in its sole discretion, deems
        advisable; and

                (ii) institute and prosecute all suits and proceedings and take
        all actions, in its own name or in the name of the Seller, as the case
        may be, as Purchaser, in its sole discretion, may deem necessary or
        proper to collect, assert or enforce any claim, right or title of any
        kind in and to any and all of the Acquired Assets.

     2.02 EXCLUDED ASSETS. Except for the assets described in subparagraphs (g),
(k) and (l) of the definition of "Acquired Assets," no tangible or intangible
property of the Seller shall be deemed to be an Acquired Asset unless it is
specifically listed and described as such on a Schedule hereto. All property of
Seller that is not an Acquired Asset shall be referred to herein as the
"Excluded Assets". Without limiting the scope of the Excluded Assets, the
following assets of the Seller, whether or not used by or related to the
Business, shall not be acquired by Purchaser and shall be deemed to be among the
Excluded Assets:

        (a) All cash on hand and in banks and other cash items and equivalents
of the Seller;

        (b) All Benefit Plans;

        (c) The Seller's corporate minute books and other books and records
relating to internal corporate matters, and any other books and records not
solely related to the Business (in each case other than books and records
purchased by Purchaser pursuant to subparagraph (g) of the definition of
"Acquired Assets"); and

        (d) Any claims, rights and interest in and to any refunds of federal,
provincial, state or local franchise, income or other taxes or fees of any
nature whatsoever that relate solely to the period up to and including the
Closing.

     2.03 LIABILITIES.

        (a) ASSUMED LIABILITIES. At Closing, Purchaser shall assume, discharge
and perform (i) the liabilities and obligations of the Seller under the
Subsisting Contracts listed on Schedule 1.01(f), and (ii) the liabilities and
obligations of the Seller listed on SCHEDULE 2.03(a) hereto (collectively, the
"Assumed Liabilities").

        (b) EXCLUDED LIABILITIES. Except for the Assumed Liabilities identified
in Section 2.03(a), neither Purchaser nor any of its Affiliates shall assume or
otherwise be liable in respect of, or be deemed to have assumed or otherwise be
liable in respect of, any debt, claim, obligation, or other liability of the
Seller, or any of its Affiliates, including without limitation, all

                                        9
<PAGE>

Excluded Benefit Plans and other liabilities related to Seller's Employees
and former employees incurred or accrued prior to the Closing (the "Excluded
Liabilities"), regardless or whether such debt, claim, obligation or other
liability is matured or unmatured, contingent or fixed, known or unknown. The
Seller agrees that it shall pay promptly when due any and all Excluded
Liabilities arising out of the Business or the employees thereof not discharged
by it at or prior to Closing.

     2.04 PURCHASE PRICE. Subject to Section 2.05, the aggregate purchase price
(the "Purchase Price") for the Acquired Assets shall be the following:

        (a) One Hundred Fifty Three Thousand Nine Hundred Fifteen Dollars and
Sixty Three Cents ($153,915.63) shall be paid to the Seller or its designee at
Closing by wire transfer in immediately available funds to such account of the
Seller as shall be designated by the Seller in writing at least two (2) business
days in advance of the Closing; and

        (b) 6,040,333 shares of common stock, par value $.001 per share ("Front
Porch Common Stock"), of Purchaser, which shares (i) shall be registered in such
name or names as shall be designated by the Seller in writing at least two (2)
business days in advance of the closing, (ii) shall be issued pursuant to an
exemption from registration under the Securities Act, and (iii) shall contain
the legend or legends set forth on Schedule 2.04(b) hereof.

     2.05 PURCHASE PRICE ADJUSTMENT. The Purchase Price shall be subject to
adjustment after the Closing as specified in this Section 2.05:

        (a) Attached hereto as SCHEDULE 2.05(a) is a Closing Statement prepared
by the Seller. The Closing Statement prepared by the Seller is hereinafter
referred to as the "Seller's Closing Statement."

        (b) Within thirty (30) days following the Closing Date, Purchaser shall
have the right to provide the Seller a Closing Statement (the "Purchaser's
Closing Statement"). The Seller shall provide to Purchaser and its independent
public accountants access to such of its records (including work papers and all
relevant personnel) as may reasonably be required for the preparation of
Purchaser's Closing Statement. If Purchaser does not provide a Closing Statement
in accordance with this Section 2.05(b) or if Purchaser's Closing Statement does
not demonstrate a Post-Closing Payment which is different from that calculated
by using the Seller's Closing Statement, then the Seller's Closing Statement
shall be deemed to be the "Accepted Closing Statement." If Purchaser's Closing
Statement demonstrates a Post-Closing Payment which is different than that
calculated by using the Seller's Closing Statement, then Purchaser and the
Seller, together with Ernst & Young LLP and the Seller's independent public
accountants, shall endeavor to resolve such difference and if a resolution is
reached, such resolution shall determine the Post-Closing Payment and such
resolution shall be reflected on the Accepted Closing Statement. If no
resolution can be reached within thirty (30) days of completion of both
Purchaser's Closing Statement and the Seller's Closing Statement, the Seller and
Purchaser shall promptly select a third independent public accounting firm of
national reputation to arbitrate the dispute, to review the Closing Statements
and to determine the correct Closing Statement. Such determination, which shall
be final and binding on Purchaser and the Seller, shall determine the

                                       10
<PAGE>

Post-Closing Payment and shall be deemed to be the Accepted Closing
Statement. The fees and expenses of the third independent public accounting firm
shall be shared equally by the Seller and Purchaser.

        (c) "Net Assets" shall mean (i) the total assets of the Business
recorded at net book value as of September 29, 2000 (further reduced by
estimated depreciation from such date through the Closing Date) minus (ii) the
total liabilities of the Business recorded at net book value as of the Closing
Date, in each case determined in accordance with generally accepted accounting
principles consistently applied. "Closing Net Assets" shall mean the Net Assets
set forth on the Accepted Closing Statement.

        (d) If Closing Net Assets is less than the amount set forth in Section
2.04(a), then the Seller shall pay or cause to be paid to Purchaser, within five
(5) business days after delivery of the Accepted Closing Statement, an aggregate
amount in cash equal to the difference between the amount paid by Purchaser
pursuant to Section 2.04(a) and the Closing Net Assets amount. If Closing Net
Assets is greater than the amount set forth in Section 2.04(a), then Purchaser
shall pay to the Seller, within five (5) business days after delivery of the
Accepted Closing Statement, an aggregate amount in cash equal to the difference
between the amount set forth in Section 2.04(a) and the Closing Net Assets
amount. The amount of such payment from the Seller to Purchaser or from
Purchaser to the Seller, as the case may be, is referred to herein as the
"Post-Closing Payment".

        (e) The Purchase Price shall be deemed to have been increased or
decreased, as the case may be, by the amount of the Post-Closing Payment.

        (f) The number of shares of Front Porch Common Stock issuable by
Purchaser to the Seller shall be subject to adjustment pursuant to the terms of
paragraph 3 of the letter agreement dated the date hereof between Purchaser and
the Seller.

     2.06 TREATMENT OF PURCHASE PRICE.

        (a) The Seller and Purchaser shall cooperate with each other to agree
within 45 days following the Closing Date on an allocation of the Purchase Price
among the Acquired Assets and the non-competition covenant set forth in Section
4.01 of this Agreement.

        (b) Each of the parties shall report the Tax consequences of the
transactions called for in this Agreement in a manner consistent with the
allocation so agreed upon by the parties. Such allocation shall be followed in
all Tax Returns of Purchaser and the Seller for the taxable year that includes
the Closing Date, and neither Purchaser nor the Seller will take any position
inconsistent with such allocation unless otherwise required by applicable law.

                                       11
<PAGE>

                                   ARTICLE III

                         CLOSING AND PAYMENT OBLIGATION
                         ------------------------------

     3.01 CLOSING. The consummation of the purchase and sale contemplated by
this Agreement (the "Closing") shall be held at a time, place and manner as the
Seller and Purchaser shall agree following the satisfaction or waiver (by
Purchaser, in the case of the conditions in Section 7.01, and by the Seller, in
the case of the conditions in Section 7.02) of all of the conditions to Closing
set forth in Article VII hereof, or such other time, place and date as may be
mutually agreed upon by the parties hereto. The date of the Closing is sometimes
herein referred to as the "Closing Date".

     3.02 DELIVERIES BY THE SELLER. Subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties and agreements of the
Purchaser contained herein, and in consideration of the Purchase Price, the
Seller agrees to deliver at the Closing the following, all reasonably
satisfactory in form and substance to Purchaser and its legal counsel:

        (a) a duly executed bill of sale for the Owned Tangible Property to be
acquired hereunder in the form attached hereto as EXHIBIT 3.02(a);

        (b) a duly executed bill of sale and assignment necessary to transfer to
Purchaser the Intellectual Property in the form attached hereto as EXHIBIT
3.02(b);

        (c) duly executed assignment and assumption agreements necessary to
transfer to Purchaser the Subsisting Contracts to be acquired hereunder in the
forms attached hereto as EXHIBIT 3.02(c);

        (d) all documents of title, if any, necessary to transfer to Purchaser
any of the Owned Tangible Property to be acquired hereunder;

        (e) evidence satisfactory to Purchaser that any and all liens on the
Acquired Assets have been released;

        (f) all other deeds, endorsements, assignments and other instruments as,
in the reasonable opinion of counsel for Purchaser, are necessary to vest in
Purchaser such right, title and interest in and to any of the Acquired Assets to
which Purchaser is entitled;

        (g) [Reserved].

        (h) a duly executed transition services agreement in the form attached
hereto as EXHIBIT 3.02(h);

        (i) evidence of payment by wire transfer of immediately available funds
in an amount equal to that portion of the revenues described in subparagraph (k)
of the definition "Acquired Assets" which has been invoiced by the Seller (or
for which employees in the

                                       12
<PAGE>

Business have requested an invoice) prior to the Closing Date, as set forth on
SCHEDULE 3.02(i); and

        (j) an opinion of Richard Bland Law Firm, counsel to the Seller, dated
the Closing Date and addressed to Purchaser, in a form reasonably acceptable to
Purchase and its legal counsel.

     3.03 DELIVERIES BY PURCHASER. Subject to the terms and conditions of this
Agreement, in reliance on the representations, warranties and agreements of the
Seller contained herein, and in consideration of the Acquired Assets, Purchaser
agrees to deliver at the Closing the following, all reasonably satisfactory in
form and substance to the Seller and its legal counsel:

        (a) the wire transfer described in Section 2.04(a) hereof;

        (b) a certificate or certificates for the shares of Front Porch Common
Stock described in Section 2.04(b) hereof;

        (c) a duly executed assignment and assumption agreement necessary to
transfer to Purchaser the Subsisting Contracts in the form attached hereto as
EXHIBIT 3.02(c);

        (d) such other assignment, transfer and assumption documents and
instruments as in the opinion of counsel of the Seller may be reasonably
required to effectuate the terms of this Agreement and to comply with the terms
hereof;

        (e) duly executed employment agreements for Dr. Giancarlo Gaggero and
Edward Ladd in the form attached hereto as EXHIBITS 3.03(e)(i) and (ii);

        (f) an opinion of Pryor Cashman Sherman & Flynn LLP, counsel to the
Purchaser, dated the Closing Date and addressed to the Seller, in a form
reasonably acceptable to the Seller and its legal counsel;

        (g) a duly executed transition services agreement in the form attached
hereto as EXHIBIT 3.02(h); and

        (h) a duly executed registration rights agreement in the form attached
hereto as EXHIBIT 3.03(h).

                                       13
<PAGE>

                                   ARTICLE IV

                              ADDITIONAL AGREEMENTS
                              ---------------------

     4.01 AGREEMENT NOT TO COMPETE AND TO MAINTAIN CONFIDENTIALITY.

        (a) For good and valuable consideration and in furtherance of the sale
of the Acquired Assets and the Business to Purchaser hereunder, in order to
insure that Purchaser obtains the benefits it reasonably expects to obtain
hereunder and to more effectively protect the value and goodwill of the Acquired
Assets and the Business, the Seller covenants and agrees that, except as
provided in Sections 4.06, 4.12, 4.14 and 4.17 below, for the period commencing
on the Closing Date and ending on the fifth (5th) anniversary of the Closing
Date, neither the Seller nor any of its Affiliates (collectively, the
"Restricted Parties"), without the prior written consent of the Chief Executive
Officer of Purchaser, its successor or assignee, will:

                        (i) directly or indirectly own, manage, operate or
            control, or participate with another Person in the ownership,
            management, operation or control of, any business or division or
            line of any business anywhere in the world which engages in a
            business similar to or competitive with the Business; PROVIDED,
            HOWEVER, that it will not be deemed a breach of this clause if the
            Restricted Parties collectively own beneficially or of record in the
            aggregate less than five percent (5%) of the issued and outstanding
            capital stock of a privately held company or ten percent (10%) of
            the issued and outstanding capital stock of a company whose stock is
            publicly traded on a national securities exchange or actively traded
            in a recognized over-the-counter market, and PROVIDED FURTHER,
            HOWEVER, that the design, development, manufacture and/or marketing
            of (a) the Seller's current hardware or software products not
            included in the Business (and future versions thereof and
            enhancements thereto) and/or (b) hardware or software products that
            facilitate or enable customers to manage their data storage media
            and thereby reduce or diminish their future need for the services
            provided by the Business, shall not be deemed to be a business
            similar to or competitive with the Business; or

                        (ii) induce or attempt to persuade any customer of the
            Business to terminate such relationship in order to enter into any
            similar relationship on behalf of any other business in competition
            with the Business; or

                        (iii) induce or attempt to persuade any Business Person
            (as defined below) to terminate or to refuse to enter into an
            agreement under which such Business Person performs or would perform
            services as an employee, consultant, agent or otherwise for
            Purchaser in support of the Business. For purposes of this clause
            (iii), "Business Person" shall mean any natural person (A) who is an
            employee of the Seller on the Closing Date or within sixty (60) days
            prior thereto and who becomes employed in the Business by Purchaser
            or an Affiliate of Purchaser in connection with the transactions
            contemplated hereby, (B) who, at the time of the prohibited contact,
            is an employee of Purchaser or an Affiliate of Purchaser engaged in
            the Business, or (C) who is (or was at any time within sixty (60)
            days prior to the prohibited contact by a Restricted Party) an

                                       14
<PAGE>

            employee, consultant or free-lance worker engaged in the Business
            for or on behalf of Purchaser or an Affiliate of Purchaser.
            Notwithstanding the foregoing provisions of this clause (iii), the
            Seller shall have the right to engage in the following activities:
            (A) soliciting applications for employment through generalized
            advertising or other means not specifically directed at a Business
            Person, (B) communicating in any way, including making an employment
            or consulting offer, with a Business Person in cases in which such
            Business Person initiates contact with the Seller regarding a
            possible employment or consulting position or (C) communicating in
            any way, including making an employment or consulting offer, with a
            Business Person who was not at any time during the sixty (60) days
            immediately preceding such communication an employee, consultant or
            free-lance worker engaged in the Business for or on behalf of
            Purchaser or an Affiliate of Purchaser.

        (b) The Seller hereby expressly acknowledges that the Acquired Assets
include Proprietary Information of the Seller related to the Business. The
Seller agrees that all such Proprietary Information is confidential and/or
proprietary and that a substantial portion of the Purchase Price is being paid
for such Proprietary Information and that it represents a substantial investment
having significant economic and commercial value to Purchaser, and constitutes a
substantial part of the value to Purchaser of the Business and the Acquired
Assets. The Seller acknowledges that Purchaser would be irreparably damaged if
any of the Proprietary Information of the Business was disclosed to, or used or
exploited on behalf of, any Person or entity other than Purchaser or its
Affiliates. Accordingly, the Seller covenants and agrees that the Restricted
Parties shall not, without the prior written consent of the Chief Executive
Officer of Purchaser, disclose, use or exploit any such Proprietary Information,
whether for the benefit of such Restricted Party, any other Restricted Party or
of any third party or otherwise, except that a Restricted Party may use or
exploit a particular item of such Proprietary Information if and to the extent
(but only if and to the extent) that such item:

                        (i) is or becomes publicly known or generally known in
            the industry through no act of such Restricted Party;

                        (ii) is required to be disclosed to (or by order of) a
            governmental agency or a court of law or otherwise as required by
            law; PROVIDED that prior to any such disclosure, notice of such
            requirement of disclosure is given to Purchaser and Purchaser is
            afforded the reasonable opportunity to object to such disclosure; or

                        (iii) is used as permitted in Section 4.16.

        (c) The Seller hereby expressly acknowledges that money damages will be
impossible to calculate and may not adequately compensate Purchaser in
connection with an actual or threatened breach by any Restricted Party of any of
the provisions of this Section 4.01. Accordingly, the Seller hereby expressly
waives, and to cause each other Restricted Party to waive, all rights to raise
the adequacy of Purchaser's remedies at law as a defense if Purchaser seeks to
enforce by injunction or other equitable relief the due and proper performance
and observance of the provisions of this Section 4.01. In addition, and subject
to Section 10.14 of this Agreement, Purchaser shall be entitled to pursue any
other available remedies at law or

                                       15
<PAGE>

equity, including the recovery of money damages, in respect of the actual or
threatened breach of the provisions of this Section 4.01; provided, however,
that Purchaser's exclusive remedy for the use by a Restricted Party of
intangible Proprietary Information included among the Acquired Assets (i.e. an
idea, concept, algorithm, method, process, etc.) for a purpose that does not
cause the Seller to be in violation of Section 4.01(a)(i) (other than a use that
constitutes or results in (i) an infringement of a patent or copyright owned by
Purchaser or (ii) the disclosure of such Proprietary Information to a third
party) shall be an injunction restraining such Restricted Party from further use
of such Proprietary Information.

        (d) The Seller and Purchaser acknowledge and recognize that each of the
covenants contained in this Section 4.01 are integral to the sale to Purchaser
of the Acquired Assets and the Business, that without the protection of such
covenants Purchaser would not have entered into this Agreement, that the
consideration paid by Purchaser as set forth in Section 2.04 hereof and the
allocation of the consideration bears no relationship to the damages Purchaser
may suffer in the event of any breach of such covenants, and that such covenants
contain limitations as to time, geographical area and/or scope of activity to be
restrained which are reasonable and necessary to protect Purchaser's business
interests and the value of the Business and the Acquired Assets. If this Section
4.01 shall nevertheless for any reason be held to be excessively broad as to
time, duration, geographical scope, activity or subject, the parties shall agree
to amend this Section 4.01 so that it will be enforceable to the fullest extent
compatible with applicable laws that shall then apply.

     4.02 INVESTIGATION. (a) Each party agrees to cooperate fully with the other
party and to give to such party, its officers, employees, auditors, legal
counsel, representatives and agents reasonable access during normal business
hours to all such information, documents, premises and employees as such party
considers necessary or advisable for purposes of its investigation of the
business of the other party; PROVIDED, HOWEVER, that any such access shall be
conducted at the investigating party's expense, at a reasonable time and under
the supervision of the personnel of the party being investigated. The parties
agree to consult with each other in an effort to establish procedures designed
to implement the provisions of this Section 4.02 in order to minimize disruption
to their respective businesses. The parties acknowledge that they entered into a
letter of intent dated August 15, 2000 (the "Letter of Intent"), and agree that
with respect to Proprietary Information of the Seller, the obligations of
Purchaser and its Affiliates to maintain such Proprietary Information in
confidence pursuant to the Letter of Intent (the "Confidential Obligations")
shall terminate upon the Closing to the extent such Proprietary Information is
included in the Acquired Assets but shall continue in full force and effect as
to all other of the Seller's Proprietary Information. Notwithstanding anything
to the contrary contained in the Letter of Intent, Purchaser and its respective
Affiliates may disclose Proprietary Information of the Seller to the extent such
Proprietary Information:

                        (i) is or becomes publicly known or generally known in
            the industry through no act of Purchaser or its Affiliates or
            Representatives;

                        (ii) is required to be disclosed to or by order of a
            governmental agency or a court of law or otherwise as required by
            law; provided that prior to

                                       16
<PAGE>

            any such disclosure notice of such requirement of disclosure is
            provided to the Seller, and the Seller is afforded the
            reasonable opportunity to object to such disclosure; or

                        (iii) is required to be disclosed to Purchaser's
            Representatives working on this transaction.

          The Seller hereby agrees with respect to Proprietary Information of
     Purchaser that has been or may be disclosed to the Seller prior to the
     Closing Date to maintain such Proprietary Information in confidence
     pursuant to the Letter of Intent in the same manner as Purchaser is
     obligated to do so with respect to Proprietary Information of the Seller
     pursuant to this Section 4.02.

     4.03 CONDUCT OF THE BUSINESS PENDING THE CLOSING. The Seller agrees that
from the date hereof through the Closing Date, the Business will be conducted
only in the usual and ordinary course consistent with past practice, and, except
as may be permitted by this Agreement, or approved in writing in advance by
Purchaser, the Seller agrees as follows:

        (a) The Seller will, so far as it is within its power to do so, carry on
the Business substantially in the same manner as heretofore conducted, and the
Seller shall not institute any new methods of acquisition, production,
marketing, distribution, sale, lease, license, management, operation, or engage
in any transaction or activity, enter into any agreement or make any commitment,
except in the ordinary course of business and consistent with past practice.

        (b) The Seller shall not institute any new methods of accounting
relating to the Business.

        (c) The Seller shall use commercially reasonable efforts to preserve the
Business intact, to protect and preserve the Seller's assets, and preserve its
relationships with licensors, suppliers, distributors, customers, contractors
and employees.

        (d) Except as otherwise specifically permitted pursuant to this
Agreement, the Seller shall not, with respect to the Business:

                        (i) (A) Borrow or agree to borrow any funds or (B)
            incur, or assume or become subject to, whether directly or by way of
            guarantee or otherwise, any obligation or liability (absolute or
            contingent), in the case of (A) or (B) that would be an Assumed
            Liability, except in the case of clause (B) obligations and
            liabilities incurred in the ordinary course of business and
            consistent with past practice;

                        (ii) Permit or allow any of the Acquired Assets to be
            subjected to any Encumbrance of any kind or description (except
            Encumbrances created by law);

                                       17
<PAGE>

                        (iii) Dispose of or permit to lapse any rights to the
            use of any Intellectual Property included among the Acquired Assets
            (and the Seller shall take all commercially reasonable actions in
            respect of any infringement of any Intellectual Property of which it
            has knowledge), or dispose of or, except in the ordinary course of
            business, disclose to any Person any trade secret, formula, process
            or know-how not theretofore a matter of public knowledge relating to
            the Business;

                        (iv) Make any single capital expenditure or future
            commitment relating to the Business in excess of $20,000 for
            additions to property, plant or equipment or make aggregate capital
            expenditures or future commitments in excess of $50,000 for
            additions to property, plant or equipment; provided, however, that
            this restriction shall not apply to expenditures required to fulfill
            obligations to customers of the Business;

                        (v) Sell, transfer or lease (other than in the ordinary
            course of business consistent with past practices) any of the
            Acquired Assets to, or enter into any agreement or arrangement with,
            any Affiliate of the Seller;

                        (vi) Grant or extend any power of attorney or act as
            guarantor, surety, co-signer, endorser, co-maker, indemnitor or
            otherwise in respect of the obligation of any Person;

                        (vii) Other than in the ordinary course of business
            consistent with past practice, distribute any property to any
            employee of the Seller engaged in the Business;

                        (viii) Grant to any officer or employee engaged in the
            Business any increase in compensation or benefits, other than
            increases in compensation or benefits for employees in the ordinary
            course of business consistent with past practice;

                        (ix) Pay any pension, retirement allowance or other
            employee benefit not required by any Benefit Plan of the Seller in
            existence on the date hereof;

                        (x) Adopt, agree to adopt, or make any announcement
            regarding (i) the adoption of any new pension, retirement or other
            employee benefit plan, policy or program that applies only to
            employees of the Business, or (ii) adoption of any amendments to any
            Benefit Plan of the Seller in existence on the date hereof that
            applies only to employees of the Business, unless otherwise required
            by applicable law; or

                        (xi) Agree, whether in writing or otherwise, to do any
            of the foregoing.

                                       18
<PAGE>

        (e) From the date hereof through the Closing Date, the Seller shall give
prompt written notice to Purchaser of any material casualty losses or damages
with respect to the Acquired Assets (whether or not any such loss or damage
shall have been covered by insurance) and, if such loss is insured, the Seller
shall promptly notify the carrier and make a claim;

        (f) No contract or commitment will be entered into, and no purchase of
supplies and no sale of any of the Seller's assets will be made, by or on behalf
of the Seller in respect of the Business, except (i) normal contracts or
commitments for the purchase of, and normal purchases of, supplies or inventory
or for the sale of inventory, in each case made in the ordinary course of
business and consistent with past practice, and (ii) other contracts,
commitments, purchases or sales in the ordinary course of business and
consistent with past practice.

        (g) The Seller shall maintain insurance on the Acquired Assets
consistent with past practices and the Acquired Assets shall be used, operated,
maintained and repaired in the ordinary course of business consistent with past
practice.

        (h) The Seller shall not do any act or omit to do any act, or permit any
act or omission to act (to the extent the Seller has control over such act or
omission), which will cause a breach of any material contract or commitment of
the Seller arising out of or relating to the Business or which would cause the
breach by the Seller of any representation, warranty, covenant or agreement made
hereunder.

        (i) The Seller shall duly comply in all material respects with all laws
applicable to it and its properties, operations, business and employees
comprising the Business.

     4.04 TAXES, FEES AND EXPENSES. In addition to the Purchase Price, all
sales, use, transfer, and purchase taxes and fees, if any, arising out of the
transfer of the Acquired Assets pursuant to this Agreement shall be paid by
Purchaser.

     4.05 EMPLOYEES. (a) Purchaser shall extend offers of employment (contingent
upon the Closing) to the Employees listed on Schedule 4.05 on such terms as
Purchaser shall determine in its sole discretion, it being understood that the
Seller shall be responsible for, and shall indemnify and hold harmless (as set
forth in Article VIII) Purchaser from and against, any severance, termination,
accrued vacation, "golden parachute" or other similar obligations with respect
to any Employees, whether or not such Employee accepts employment with the
Purchaser, whether pursuant to corporate policy, any Benefit Plans (as defined
in Section 5.21(a) hereof), or by law (domestic or foreign), including without
limitation any liabilities arising under the Workers Adjustment and Retraining
Notification Act ("WARN") and whether or not pursuant to individual agreement or
commitment or group plan. No agreement, understanding or arrangement entered
into by a Transferred Employee and the Seller shall prohibit or restrict a
Transferred Employee from disclosing to Purchaser Proprietary Information of the
Seller that is included in the Acquired Assets.

                                       19
<PAGE>

        (b) [Reserved].

        (c) Purchaser shall not assume any obligation or liability for and the
Seller shall remain responsible for any and all obligations and liabilities to
the Employees, former Employees and Transferred Employees of the Seller related
to any employment or service performed or otherwise, which were incurred or
accrued prior to the Closing whether payable prior to or after the Closing.

     4.06 PURCHASER TO BE EXCLUSIVE PROVIDER. (a) Until the fifth (5th)
anniversary of the Closing Date, the Seller agrees that Purchaser shall be the
exclusive provider to the Seller and its Affiliates of, and Purchaser agrees
that it shall provide to the Seller and its Affiliates on terms at least as
favorable as those available to any other of Purchaser's resellers of the
services that comprise the Business of comparable size and magnitude (but in no
event greater than 90% of Purchaser's market prices for end users), all services
that comprise the Business, whether for the internal purposes of the Seller or
for third parties and whether domestic or foreign. In addition, during such
period, the Seller and Purchaser agree that Purchaser shall be the exclusive
provider (either directly or as a subcontractor of the Seller) to Seller's and
its Affiliates' customers of all services that comprise the Business with
respect to all third-party Business opportunities and contracts generated by the
Seller's or its Affiliates' sales force or through the Seller's or its
Affiliates' sales and marketing efforts (a "Sales Opportunity"). The Seller
agrees that it will cause its and its Affiliates' sales force to quote pricing
for each Sales Opportunity only in accordance with Purchaser's then-applicable
pricing terms, and Purchaser agrees that it will provide the services
contemplated in each Sales Opportunity on terms at least as favorable as those
available to any other of Purchaser's resellers of the services that comprise
the Business of comparable size and magnitude (but in no event greater than 90%
of Purchaser's market prices for end users). Notwithstanding the foregoing, the
Seller and Purchaser shall mutually agree upon procedures for the implementation
of, and the compensation of Seller's sales force with respect to, this Section
4.06 and Section 4.12.

        (b) Until the fifth (5th) anniversary of the Closing Date, Purchaser
agrees that it will not, without the Seller's prior written consent (which
consent shall not be unreasonably withheld), (A) sell all or substantially all
of the assets comprising the Business, or (B) agree to a Change of Control, in
either case, without obtaining from the purchaser of such assets or the Person
obtaining such control its agreement to abide by the provisions of Sections
4.06(a), 4.12, 4.13 and 4.14 (including the escrow agreement executed pursuant
to Section 4.14).

        (c) If and to the extent Purchaser is unable to provide services to the
Seller or its customers in accordance with Section 4.06(a) for a period of
fifteen (15) days after notice thereof is given to Purchaser by the Seller, the
Seller shall have the right to provide such services either directly or through
a competitor of Purchaser. For that purpose, and for that purpose only, Seller
shall retain an object code only non-transferrable license to the software tools
used in the Business for data conversion, which Purchaser will update from time
to time with any improvements made by Purchaser to such software tools;
PROVIDED, HOWEVER, that Seller shall make no use of such software tools except
as provided pursuant to this Section 4.06(c).

                                       20
<PAGE>

        (d) The Seller shall have the right from time to time to conduct
reasonable audits of Purchasers books and records during normal business hours
for the purpose of verifying Purchaser's compliance with the pricing provisions
of Section 4.06(a).

     4.07 MAINTENANCE OF BOOKS AND RECORDS. Each of the parties hereto shall
preserve, until at least the fifth (5th) anniversary of the Closing Date, all
pre-closing records possessed or to be possessed by such party relating to the
Business. After the Closing Date and up until at least the fifth (5th)
anniversary of the Closing Date, upon any reasonable request from a party hereto
or its representatives, the party holding such records shall (x) provide to the
requesting party or its representatives reasonable access to such records during
normal business hours and (y) permit the requesting party or its representatives
to make copies of such records, in each case at no cost to the requesting party
or its representatives (other than for reasonable out-of-pocket expenses). Such
records may be sought under this Section 4.07 for any reasonable purpose,
including, without limitation, to the extent reasonably required in connection
with the audit, accounting, tax, litigation, federal securities disclosure or
other similar needs of the party seeking such records.

     4.08 BULK SALES LAW. Purchaser hereby waives compliance by the Seller with
the provisions of all applicable state bulk sales laws, and the Seller warrants
and agrees to pay and discharge when due all claims of creditors which could be
asserted against Purchaser by reason of such noncompliance to the extent that
such liabilities arise before the Closing, and agrees to protect, defend, save
harmless and indemnify Purchaser from and against any and all such claims and
demands pursuant to the procedures set forth in Article VIII hereof which shall
apply thereto in all respects.

     4.09 [Reserved].

     4.10 WEBSITE LINKS. The parties agree to cooperate with each other to
provide reasonable and appropriate links between their respective internet web
sites.

     4.11 FURTHER COOPERATION. Each of the Seller and Purchaser shall cooperate,
and use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including, without limitation,
the execution and delivery by each of the individuals named in Section 3.03(e)
hereof of the respective employment agreements required thereby.

     4.12 CONTINUED COMMISSION PAYMENTS BY THE SELLER AND RELATED MATTERS. In
order to enhance the synergy between the businesses of Purchaser and the Seller,
until the fifth (5) anniversary of the Closing Date:

        (a) The Seller shall continue to pay commissions to its sales force on
revenue derived from transactions in which the Seller subcontracts the media
services portion of such transactions to Purchaser. Commissions payable for
media services revenues sold by the Seller shall be comparable to commissions
payable for the hardware and software products sold by the

                                       21
<PAGE>

Seller in such transactions, and such media services revenues shall count
toward the quotas established for the Seller's sales force.

        (b) [Reserved].

        (c) The Seller shall provide Purchaser with information and contacts to
enable Purchaser to apply to be a value added reseller ("VAR") of the Seller. If
the Purchaser qualifies as a VAR, the Seller shall make equipment available to
Purchaser for resale to the end customer on the same basis as such equipment is
made available to the Seller's other VARs.

        (d) The Seller shall sell newly-developed products to Purchaser for use
by Purchaser solely in the development and delivery of media services. The price
for such products shall be the Seller's standard cost for such products plus
15%. Such products shall be delivered to Purchaser on a priority basis to the
Seller's VAR customers and may not be resold without the prior written consent
of the Seller.

        (e) For transactions in which Purchaser contracts directly with a
customer and the Seller's sales force plays a significant role in procuring the
transaction, Purchaser shall pay to the Seller a commission equal to 10% of the
media services revenues involved in such transaction, exclusive of media
products and the Seller's hardware and software. The Seller shall then pay
commissions to its sales force based on the commissions paid by Purchaser to the
Seller, as provided in subparagraph (a) above.

        (f) The parties agree to cooperate in creating appropriate
communications to the Seller's sales force that explain the new relationship
between the parties and the above elements of that relationship. The Seller
shall distribute these communications under executive sponsorship.

        (g) The Seller shall sell to Purchaser Imation media at a price equal to
the Seller's direct cost (which includes any shipping, handling and sales taxes
and the like) plus 1% to cover the Seller's indirect costs of providing
Purchaser such media. The parties agree that the Seller shall have the right to
review its indirect costs from such sales on an annual basis. If the Seller
shall determine that the then-agreed price to Purchaser of Imation media is an
amount less than the Seller's direct and indirect costs for such sales, the
parties shall negotiate in good faith to adjust the purchase price to Purchaser
of Imation media to an amount sufficient to enable the Seller to recoup such
costs of providing Purchaser such media.

        (h) If following the Closing any customer of the Business notifies
either the Seller or Purchaser that it does not desire to have its customer
contract assigned to Purchaser hereunder, the Seller shall agree to continue to
perform the services to be provided under such contract and the services to be
furnished under such contract shall be performed by Purchaser as a subcontractor
of the Seller. In such event, Seller shall pay to Purchaser promptly upon
receipt all revenues received in respect of such contract (but excluding
revenues included in the Seller's payment to Purchaser pursuant to Section
3.02(i)).

                                       22
<PAGE>

     4.13 PURCHASER'S BOARD OF DIRECTORS. As soon as practicable after the
Closing Date, Purchaser shall take such action as may be necessary to confer
upon the Seller the right, so long as the Seller beneficially owns at least ten
percent (10%) of the outstanding Front Porch Common Stock, to appoint a
representative to serve on Purchaser's Board of Directors.

     4.14 SOFTWARE ESCROW AGREEMENT. Within 60 days after the Closing Date,
Purchaser shall deposit in escrow a copy of the then-current version of the
software described in Schedule 1.01(e), in both source code and object code
form, pursuant to a software escrow agreement that the parties shall execute as
soon as reasonably practicable after the Closing Date. Such software escrow
agreement shall (i) have a term of five (5) years, (ii) contain customary terms
and (iii) provide, among other things, for (a) the release of the escrowed
software to the Seller upon Purchaser's bankruptcy, Purchaser's repudiation of
its further obligations under Section 4.06 or, except as permitted by Section
4.06(b), Purchaser's exiting all or substantially all of the Business (a
"Release Event"), (b) the grant to the Seller effective upon a Release Event of
a non-exclusive license to use the escrowed software to provide the services
comprising the Business and (c) Purchaser to update the escrowed software
annually.

     4.15 The SELLER'S EMPLOYEES. Purchaser agrees that for the five-year period
commencing on the Closing Date it will not induce or attempt to persuade any
Seller Business Person (as defined below) to terminate or to refuse to enter
into an agreement under which such Seller Business Person performs or would
perform services as an employee, consultant, agent or otherwise for the Seller.
For purposes of this Section 4.15, "Seller Business Person" shall mean any
natural person who, at the time of the prohibited contact or within the sixty
(60) days immediately prior thereto, is an employee, consultant or free-lance
worker of the Seller. Notwithstanding the foregoing provisions of this Section
4.15, Purchaser shall have the right to engage in the following activities: (a)
soliciting applications for employment through generalized advertising or other
means not specifically directed at a Seller Business Person, (b) communicating
in any way, including making an employment or consulting offer, with a Seller
Business Person in cases in which such Seller Business Person initiates contact
with Purchaser regarding a possible employment or consulting position or (c)
communicating in any way, including making an employment or consulting offer,
with a Seller Business Person who was not at any time during the sixty (60) days
immediately preceding such communication an employee, consultant or free-lance
worker of the Seller.

     4.16 CONTINUING USE OF INFORMATION. The parties acknowledge that (a)
certain Proprietary Information included among the Acquired Assets may be
currently used by or available for use by the Seller outside the Business and
(b) certain Proprietary Information included among the Excluded Assets may be
currently used or available for use in the Business. The parties further
acknowledge that it would be a hardship to identify and purge all such
Proprietary Information. Accordingly, the parties agree that after the Closing
Date, each party shall have a nonexclusive right to use such Proprietary
Information belonging to the other for the same or similar purposes for which
such Proprietary Information was used prior to the Closing Date; PROVIDED,
HOWEVER, that a party shall not have the right under this Section 4.16 (i) to
use any Intellectual Property belonging to the other party other than
Proprietary Information, (ii) to

                                       23
<PAGE>

infringe a copyright or patent belonging to the other party or (iii) disclose
any of such Proprietary Information to a third party.

     4.17 EFFECT OF RELEASE EVENT. The Seller's obligations under Sections
4.01(a), 4.06 and 4.12 shall terminate upon the occurrence of a Release Event.

     4.18 LICENSE TO USE NON-BUSINESS SOFTWARE PRODUCTS. Purchaser shall at the
Seller's request, execute one or more of the Seller' standard license agreements
covering the Non-Business Software Products acquired by Purchaser hereunder;
provided, however, that Purchaser shall not be obligated to pay any license or
other fees or costs for the use of such Non-Business Software Products.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES
                                  OF THE SELLER
                                  -------------

     As a material inducement to Purchaser to enter into this Agreement and
consummate the transactions contemplated hereby, the Seller represents and
warrants to Purchaser as follows:

     5.01 ORGANIZATION. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Seller has all requisite corporate power and authority to enable it to own,
lease or otherwise hold the Acquired Assets and to carry on the Business as
presently conducted. The Seller is duly qualified to do business and in good
standing in each jurisdiction in which the nature of the Business or the
ownership, leasing or holding of its properties relating to or used by the
Business makes such qualification necessary.

     5.02 INVESTMENT REPRESENTATIONS.

        (a) The Seller hereby confirms that the shares of Front Porch Common
Stock issued to the Seller hereunder will be acquired for investment for the
Seller's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part of such shares in contravention of applicable
law, and that the Seller has no present intention of selling, granting any
participation in, or otherwise distributing the same. The Seller does not have
any contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participation to such Person or to any third Person in or with
respect to any of such shares.

        (b) The Seller is, and upon the acquisition of the shares of Front Porch
Common Stock issued by the Seller hereunder will be, an "accredited investor"
within the meaning of Rule 501 of Regulation D of the Rules and Regulations of
the Securities and Exchange Commission under the Securities Act. The Seller
acknowledges that it can bear the economic risk of the investment made hereunder
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the investment in the shares of
Front Porch Common Stock issued to it hereunder.

                                       24
<PAGE>

        (c) The Seller understands that the shares of Front Porch Common Stock
issued to the Seller pursuant to this Agreement are "restricted securities"
within the meaning of Rule 144 under the Securities Act ("Rule 144") inasmuch as
they will be acquired from Purchaser in a transaction not involving a public
offering and that under the federal securities laws and applicable regulations
such shares may be resold without registration under the Securities Act only in
certain limited circumstances. In this connection, the Seller represents that it
is familiar with Rule 144 and understands the resale limitations imposed thereby
and by the Securities Act. The Seller understands that the certificate
evidencing such shares will bear an appropriate legend restricting transfers.

        (d) The Seller believes it has received or had an opportunity to review
all the information it considers necessary or appropriate for deciding whether
to accept as partial consideration for the transfer of the Acquired Assets the
shares of Front Porch Common Stock to be issued to the Seller hereunder,
including, without limitation, all reports and other information, including
exhibits, filed by Purchaser with the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, prior to the date hereof, and a
copy of Seller's Confidential Private Placement Memorandum dated May 5, 2000, as
supplemented by Supplement No. 1 thereto dated October 6, 2000 (the "Offering
Memorandum"). The Seller further represents that it has had the opportunity to
ask questions and receive answers from Purchaser regarding such shares and the
business, properties, prospects and financial condition of Purchaser.

     5.03 AUTHORIZATION. The Seller has all requisite power and authority to
enter into this Agreement and each Related Document to which it is a party and
to consummate the transactions contemplated hereby and thereby. All acts and
other proceedings required to be taken by the Seller to authorize the execution,
delivery and performance of this Agreement and each Related Document to which it
is a party, and the consummation of the transactions contemplated hereby and
thereby have been duly and properly taken.

     5.04 VALID AND BINDING. This Agreement constitutes (and, when executed and
delivered at Closing, each Related Document, to the extent that the Seller is a
party thereto, will constitute) a valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except that (i)
such enforcement may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to or limiting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief are subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought ((i) and (ii) collectively, the "Bankruptcy
Exceptions").

     5.05 NO VIOLATION. The execution and delivery of this Agreement and each
Related Document by the Seller, and the consummation of the transactions
contemplated hereby and thereby and compliance with the terms hereof and thereof
does not and will not conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a

                                       25
<PAGE>

material benefit under or result in the creation of any Encumbrance of any
kind upon any of the Acquired Assets under, any provision of (i) the Certificate
of Incorporation or By-laws of the Seller, (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, contract, commitment or loan or other
agreement to which the Seller is a party or by which any of its properties or
assets are bound, or (iii) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Seller or the property or assets of the
Seller, except in the case of clauses (ii) and (iii) for any such violations,
breaches, defaults, rights of termination, cancellation or acceleration or
requirements which, individually or in the aggregate would not have a Material
Adverse Effect or would not adversely affect the ability of the Seller to
consummate the transactions contemplated by this Agreement.

     5.06 CONSENTS AND APPROVALS. Except as set forth in a Subsisting Contract
acquired hereunder, no consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority or any
court or other tribunal, and no consent or waiver of any party to any Subsisting
Contract acquired hereunder is required to be obtained by the Seller in
connection with the execution, delivery and performance of this Agreement and
each Related Document or the consummation of the transactions contemplated
hereby or thereby.

     5.07 FINANCIAL DATA. The Seller has furnished to Purchaser complete copies
of unaudited statements of assets and liabilities of the Business as of December
31, 1999 and June 30, 2000 and unaudited statements of revenues and direct costs
of the Business for the twelve (12) month period ended December 31, 1999 and the
six (6) month periods ended June 27, 1999 and June 30, 2000 (collectively, the
"Financial Data"), copies of which are attached hereto as SCHEDULE 5.07. The
Financial Data have been prepared by the Seller on the basis of the books and
records maintained by the Seller in the ordinary course of business in a manner
consistently used and applied throughout the periods involved. The books and
records of the Seller to which the Financial Data relate fully and fairly
reflect bona fide transactions set forth therein.

     5.08 INTERIM OPERATIONS. (a) Except as set forth on SCHEDULE 5.08 or in the
Financial Data, since December 31, 1999:

                        (i) the Business has been conducted by the Seller only
            in the ordinary and usual course consistent with past practices.

                        (ii) with respect to activities, events, assets and
            matters relating solely to the Business, the Seller has not:

                                (A) suffered any Material Adverse Effect;

                                (B) paid, discharged or satisfied any claims,
                        liabilities or obligations (absolute, accrued,
                        contingent or otherwise), other than the payment,
                        discharge or satisfaction in the ordinary and usual
                        course of business and consistent with past practice of
                        liabilities and obligations reflected or reserved
                        against in the Financial

                                       26
<PAGE>

                        Data or incurred in the ordinary and usual
                        course of business and consistent with past practice;

                                (C) canceled any debts owing to the Seller or
                        waived any claims or rights other than in the ordinary
                        and usual course of business and consistent with past
                        practices;

                                (D) sold, transferred, or otherwise disposed of,
                        any of its assets, except in the ordinary and usual
                        course of business and consistent with past practice;

                                (E) made any change in any method of accounting
                        or accounting practice;

                                (F) written down or written up the value of any
                        inventory, increased inventory levels in excess of
                        historical levels for comparable periods or written off
                        as uncollectible any notes or accounts receivable, other
                        than in the ordinary course of business consistent with
                        past practice;

                                (G) [reserved];

                                (H) made any material change in the manner in
                        which products or services have been developed or
                        marketed, except in the ordinary course of business
                        consistent with past practice;

                                (I) granted to any officer or employee engaged
                        in the Business any increase in compensation or
                        benefits, other than increases of compensation or
                        benefits to employees in the ordinary course of business
                        and consistent with past practice;

                                (J) disposed of, failed to take reasonable steps
                        to protect, or permitted to lapse, any rights for the
                        use of, any of the Seller's rights for the use of its
                        Intellectual Property used primarily in the Business, or
                        disposed of, failed to take reasonable steps to protect,
                        or disclosed to any Person any Proprietary Information
                        of the Seller related primarily to, or used primarily
                        in, the Business, other than in the ordinary and usual
                        course of business and consistent with past practices;
                        or

                                (K) suffered or agreed to take any of the
                        actions set forth in this subparagraph (ii).

                        (iii) None of the material assets of the Business have
            been affected in any way as a result of fire, explosion or other
            casualty (whether or not covered by insurance).

     5.09 UNDISCLOSED LIABILITIES. The Seller does not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
arising out of the Business, except for liabilities or obligations (i) disclosed
in the Financial Data, (ii) arising in the ordinary course of business
consistent with past practice under, or set forth in, any Subsisting Contract

                                       27
<PAGE>

listed on SCHEDULE 1.01(f) or (iii) incurred in the ordinary course of
business consistent with past practice since December 31, 1999.

     5.10 TAXES. There are no liens for Taxes on the Acquired Assets, and no
assessment of Taxes is proposed against Seller which could result in a lien for
Taxes imposed upon the Acquired Assets.

     5.11 CONDITION OF PROPERTY. To the knowledge of the Seller, all material
Tangible Property included within the Acquired Assets is in good operating
condition and repair, reasonable wear and tear excepted, and none of such
material Tangible Property is in need of maintenance or repairs except for
ordinary, routine maintenance or replacement.

     5.12 CONTRACTS AND COMMITMENTS. (a) Except as set forth in SCHEDULE 5.12
hereto, SCHEDULE 1.01(f) lists all Subsisting Contracts that are material to, or
arise solely out of, the Business. Except as set forth in SCHEDULE 5.12 hereto,
(i) all such Subsisting Contracts constitute valid and binding agreements of the
Seller and, to the knowledge of the Seller, each other party thereto,
enforceable in accordance with their terms (subject to the Bankruptcy
Exceptions), (ii) with respect to such Subsisting Contracts there are no
existing defaults by the Seller or, to the knowledge of the Seller, by any other
party thereto and there is no event which (whether with or without notice, lapse
of time or the happening or occurrence of any other event) would constitute a
default under such Subsisting Contracts by the Seller or, to the knowledge of
the Seller, by any other party thereto, (iii) the Seller is not restricted by
agreement from carrying on in any geographical location the Business as
conducted on the date hereof and to be conducted on the Closing Date and (iv)
there are no negotiations pending or in progress to revise any such Subsisting
Contract.

            (b) Except for the commercial lease agreement executed by the
landlord on December 8, 1996, by and between the Seller, as tenant, and Post Oak
Service Center Joint Venture, as landlord, as amended by the addenda dated (or
executed by landlord on) August 9, 1999 and April 24, 2000 (collectively, the
"Real Property Lease"), a copy of which has been previously delivered to
Purchaser, the Seller is not a party to any agreement relating to the Business
with respect to any real property. The Real Property Lease is in full force and
effect, has not been modified since April 24, 2000, and is binding and
enforceable in accordance with its terms, subject only to the Bankruptcy
Exceptions. With respect to the Real Property Lease, (i) all rental and other
charges payable pursuant to the terms and conditions thereof have been paid and
no rent has been paid in advance more than 30 days; (ii) there are no charges,
offsets or defenses against the enforcement by any lessor thereunder of any
agreement, covenant or condition on the part of the Seller to be performed or
observed pursuant to the terms thereof; (iii) there are no actions or
proceedings pending or, to the knowledge of the Seller, threatened by any
landlord thereunder; and (iv) the lessor to the Real Property Lease holds a
deposit in the amount of $7,115 as a security deposit for the Seller's account.
There are no parties occupying or in possession of all or any portion of the
Real Property other than the Seller, whether as lessees, tenants at will,
trespassers or otherwise. To the Seller's knowledge, the continued maintenance,
operation or use of the Real Property, any tract or portion thereof or any
interest therein in the same manner as heretofore will not violate any zoning,
building or other federal, provincial,

                                       28
<PAGE>

state, or municipal law, ordinance, regulation or restriction and the current
use of the Real Property and all parts thereof as aforesaid does not violate any
restrictive covenants of record affecting the Real Property. To the Seller's
knowledge, all licenses, permits and authorizations required by any governmental
authority with respect to the Real Property have been obtained, have been
validly issued and are in full force and effect. To the Seller's knowledge, no
other party is in material default under the Real Property Lease. The Seller has
the full legal power and authority to assign its rights under the Real Property
Lease to Purchaser subject to obtaining the applicable consent as provided in
the Real Property Lease. The Real Property (including the improvements thereon)
is available for immediate use in the conduct and operation of the Business.

            (c) Except with respect to Third Party Licenses relating to
shrinkwrap general purpose software, (i) each Third Party License included
within the Acquired Assets is a valid, legally binding agreement, enforceable
against the Seller, and to the knowledge of the Seller, each other party thereto
in accordance with its terms, subject to the Bankruptcy Exceptions, and (ii)
each Third Party License included within the Acquired Assets is in full force
and effect and, with respect to each, there is no default by the Seller or, to
the knowledge of the Seller, any other party thereto, and there is no event
which, whether with or without notice, lapse of time, or the occurrence of any
other event would constitute a default by the Seller or, to the knowledge of the
Seller, any other party thereto.

     5.13 INTELLECTUAL PROPERTY AND TECHNOLOGY. Except as set forth on SCHEDULE
5.13, Schedule 1.01(e) sets forth a true, complete and correct list of all
Intellectual Property, including Technology, of the Seller that is material to,
or used solely in, the Business, including the Software Products and the
Non-Business Software Products, and all other computer software, programs and
code (other than shrinkwrap general purpose software) owned by or licensed to
the Seller and used in the Business, including an indication in each case of
which is Owned Intellectual Property, which is Licensed Intellectual Property
and which are Non-Business Software Products. Except as set forth on SCHEDULE
5.13:

            (a) The Seller owns all legally enforceable right, title and
interest to all Intellectual Property included within the Acquired Assets
(except for Non-Owned Intellectual Property), free and clear of all Encumbrances
and without obligation to pay any royalties, license fees or other amounts to
any other Person.

            (b) [Reserved].

            (c) To the knowledge of the Seller, there is no unauthorized use,
disclosure, infringement or misappropriation by any third party, including any
employee or former employee of the Seller, of any Intellectual Property of the
Seller set forth on SCHEDULE 1.01(e), or of any right of any third party in such
Intellectual Property licensed by or through the Seller. The Seller has no
agreement to indemnify any individual or entity against any charge of
infringement of any of such Intellectual Property, other than indemnification
provisions normal and usual for the Seller's industry contained in purchase
orders, license agreements or other agreements arising in the ordinary course of
business. The Seller has not received (nor does the Seller have any

                                       29
<PAGE>

knowledge of) any notice, claim or allegation from any Person questioning the
right of the Seller to unconditionally use, possess, transfer, convey or
otherwise dispose of any of such Intellectual Property (other than the Licensed
Intellectual Property) or questioning the right of the Seller to use any of such
Licensed Intellectual Property. There is no interference, opposition,
cancellation, reexamination or other contest, proceeding, action, suit, hearing,
investigation, charge, complaint, demand, notice, claim, dispute nor any claim
of infringement, misappropriation or other violation by the Seller of any
Intellectual Property listed on SCHEDULE 1.01(e) or other proprietary rights of
any other Person pending or, to the knowledge of the Seller, threatened against
the Seller. No governmental agency or authority has disputed the Seller's right
to obtain or continue registration of any Intellectual Property set forth in
SCHEDULE 1.01(e) where the Seller has applied for such registration, except
where such dispute has been resolved in favor of issuing or continuing such
registration. To the Seller's knowledge, the Seller's use of the Owned
Intellectual Property listed on SCHEDULE 1.01(e), past and present, and the
Seller's use of the Licensed Intellectual Property listed on SCHEDULE 1.01(e),
past and present, has not and does not violate, interfere with or infringe upon
the rights of any other Person nor does such use by the Seller constitute a
breach of any agreement, obligation, promise or commitment by which the Seller
may be bound or constitute a violation of any laws, regulations, ordinances,
codes or statutes in any jurisdiction.

            (d) Except as provided in the Subsisting Contracts acquired
hereunder, no licenses or other rights have been granted by the Seller, and the
Seller has no obligation to grant any licenses or other rights, with respect to
any Intellectual Property set forth on SCHEDULE 1.01(e). No claims have been
made by or against the Seller for any violation or infringement by others of any
rights with respect to any of such Intellectual Property.

            (e) [Reserved].

            (f) To the Seller's knowledge, all statements and representations
made by the Seller in any pending applications, filings or registrations for the
Intellectual Property set forth in SCHEDULE 1.01(e) were true in all material
respects as of the time they were made. To the Seller's knowledge, no registered
copyright, trademark, service mark or patent included within such Intellectual
Property has lapsed, expired or been abandoned or canceled, or is subject to any
injunction, judgment, order, decree, ruling or charge or is subject to any
pending or threatened oppositions, cancellations, interferences or other
proceedings before the United States Patent and Trademark Office, the Trademark
Trials and Appeals Board, the United States Copyright Office or in any other
registration authority in any country.

            (g) [Reserved].

            (h) [Reserved].

        (i) The Seller has taken commercially reasonable actions to protect
against the existence of (A) any protective, encryption, security or lock-out
devices which might in any way interrupt, discontinue or otherwise adversely
affect the Technology included within the Acquired Assets or Purchaser's use
thereof; and (B) any so-called computer viruses, worms, trap

                                       30
<PAGE>

or back doors, Trojan horses or any other instructions, codes, programs, data or
materials which could improperly, wrongfully and/or without the authorization of
Purchaser, interfere with the operation or use of such Technology.

            (j) The Seller has taken commercially reasonable security measures
to maintain the Proprietary Information acquired hereunder (including without
limitation source code included therein) as confidential and proprietary, and to
protect against the loss, theft or unauthorized use of such Proprietary
Information. To the knowledge of the Seller, all use, disclosure or
appropriation of such Proprietary Information by or to a third party has been
pursuant to the terms of an agreement between the Seller and such third party.
To the knowledge of the Seller, all use, disclosure or appropriation by the
Seller of such Proprietary Information not owned by the Seller has been pursuant
to the terms of an agreement between the Seller and the owner of such
Proprietary Information, or is otherwise lawful.

     5.14 TITLE TO THE ACQUIRED ASSETS. The Seller has good and marketable title
to, a valid leasehold interest in or a valid right to use the Acquired Assets,
free and clear of all Encumbrances, except for (i) properties and assets
disposed of in the ordinary course of business since December 31, 1999, (ii)
Encumbrances for Taxes not yet due and payable or Encumbrances for Taxes which
are being contested in good faith, and (iii) Encumbrances which are not material
to the value of the properties or assets encumbered and which do not impair in
any material respect the current use or operation of such properties and assets.
The Seller owns, or has a valid leasehold or other interest in, all assets
necessary for the conduct of the Business as presently conducted by the Seller,
and all such assets (except for the Seller's corporate support assets relating
to sales, marketing, procurement, accounting, administrative, human resources
and other support functions which are generally provided to the Business as well
as other operations of the Seller) are included within the Acquired Assets.

     5.15 ENVIRONMENTAL MATTERS.

        (a) COMPLIANCE. (i) The Seller is in compliance with all applicable
Environmental Laws; (ii) the Seller has not received any written communication
from any Person that alleges that the Seller is not in compliance with
applicable Environmental Laws; and (iii) there have not been any Releases of
Hazardous Materials by the Seller or, to the knowledge of the Seller, by any
non-Affiliate of the Seller, at any property currently or formerly owned or
operated by the Seller that occurred during the period of the Seller's ownership
or operation of such property.

        (b) ENVIRONMENTAL PERMITS. The Seller has all Environmental Permits
necessary for the conduct and operation of the Business, and all such permits
are in good standing or, where applicable, a renewal application has been timely
filed and is pending agency approval, and the Seller is in compliance with all
terms and conditions of all such Environmental Permits and is not required to
make any expenditure in order to obtain or renew any Environmental Permits.

                                       31
<PAGE>

        (c) ENVIRONMENTAL CLAIMS. There are no Environmental Claims pending or,
to the knowledge of the Seller, threatened against the Seller, or against any
real or personal property or operation that the Seller owns, leases or manages.

     5.16 [Reserved].

     5.17 EMPLOYEES AND LABOR RELATIONS. (a) (i) There is no labor strike or
work stoppage or lockout actually pending, or, to the knowledge of the Seller,
threatened, against or materially affecting the Business; during the past three
years there has not been any such action actually pending against the Seller
relating to the Business; and, to the knowledge of the Seller, there has not
been any such action threatened against or materially affecting the Business;
(ii) none of the employees of the Seller engaged in the Business is represented
by a union or subject to a collective bargaining agreement and, to the knowledge
of the Seller, no union organizational campaign is in progress with respect to
such employees, and no question concerning representation exists respecting such
employees; and (iii) with respect to the Business, the Seller is in compliance
in all material respects with all applicable laws respecting employment and
employment practices terms and conditions of employment and wages and hours and
is not engaged in any unfair labor practice. There are no agreements or
arrangements between the Seller and an individual consultant, former consultant,
employee or former employee obligating the Seller to make any payment to any
such individual that is conditioned upon the successful completion of the
transactions contemplated by this Agreement.

        (b) SCHEDULE 5.17(b) hereto contains the names of all persons employed
by the Seller in the Business as of September 30, 2000 (the "Employees") and
lists which employees are exempt or non-exempt part-time or temporary employees,
salary, commission, bonus entitlement and profit sharing arrangements both
contractual and discretionary, an indication of which employees are on
short-term or long-term disability, date of commencement of employment, and
description of their function in the Business.

        (c) [Reserved].

        (d) [Reserved].

        (e) The Seller is not in breach of any material terms of employment of
any of the Employees nor so far as the Seller is aware is any Employee in breach
of any material term of his or her employment relationship.

        (f) As of the date hereof, none of the Employees has given or received
notice of termination of his or her employment.

        (g) None of the Employees is the subject of any material disciplinary
action by the Seller nor to the Seller's knowledge is any Employee engaged in
any grievance procedure.

        (h) None of the Acquired Assets is subject to any lien under Section
302(f) of ERISA or Section 412(n) of the Code.

                                       32
<PAGE>

     5.18 LICENSES; PERMITS. There are no approvals, authorizations,
certifications, consents, variances, permissions, licenses, or permits to or
from, or filings, notices, or recordings to or with, federal, state or local
governmental authorities, in each case that is material to the conduct of the
Business and relates solely to the Business.

     5.19 LITIGATION. As of the date hereof, there is no action, proceeding or
investigation pending or, to the knowledge of the Seller, threatened:

                        (i) which relates directly to, or arises directly out
            of, the Business; or

                        (ii) which questions or challenges the validity of, or
            seeks damages or equitable relief on the basis of, this Agreement or
            any action taken or to be taken by the Seller pursuant to this
            Agreement or in connection with the transactions contemplated
            hereby.

     5.20 COURT ORDERS, DECREES, AND LAWS. There is no outstanding or, to the
knowledge of the Seller, threatened order, writ, injunction, or decree of any
court, governmental agency, or arbitration tribunal against the Seller involving
or relating to the Business. The Seller is not in violation of any applicable
federal, state or local law, regulation, ordinance, zoning requirement,
governmental restriction, order, judgment or decree affecting, involving or
relating to the Business, and the Seller has not received any notices of any
allegation of any such violation. The foregoing shall be deemed to include laws
and regulations relating to the federal patent, copyright, and trademark laws,
state trade secret and unfair competition laws, and to all other applicable
laws, including equal opportunity, wage and hour, and other employment matters,
and antitrust and trade regulations, safety (including OSHA), building, zoning
or health laws, ordinances and regulations.

     5.21 [Reserved].

     5.22 CUSTOMERS. No customer of the Business has notified the Seller in
writing of an intention on its part to terminate such customer's currently
outstanding agreement for services with the Seller as they relate to the
Business. The Seller has not taken any actions specifically intended to lead to
the termination of any such Person's agreement with the Seller as it relates to
the Business.

     5.23 POST JUNE 2000 REVENUE. SCHEDULE 3.02(i) sets forth a list of all
invoices issued by the Seller (or requested to be issued by employees of the
Business) for the revenues described in subparagraph (k) of the definition of
Acquired Assets.

     5.24 BROKER'S FEES. Neither the Seller nor anyone acting on its behalf has
made any commitment or done any other act which would create any liability for
any brokerage, finder's or similar fee or commission which is conditioned upon
the successful completion of the transactions contemplated by this Agreement.

                                       33
<PAGE>

     5.25 RELATED-PARTY TRANSACTIONS. The Seller is not party to any contract,
agreement, license, lease, or arrangement with, or any other commitment to,
directly or indirectly, (1) any Affiliate of the Seller; (2) any officer or
salaried employee of the Seller; (3) any corporation, trust, or other entity in
which any such officer or salaried employee has a material equity or
participating interest; or (4) any partnership in which any such officer or
salaried employee has a partnership or participating interest, in each case,
relating to or involving the Business, except, in each instance, for existing
compensation arrangements under a Benefit Plan.

                                   ARTICLE VI

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER
                   -------------------------------------------

     As a material inducement to the Seller to enter into this Agreement and
consummate the transactions contemplated hereby, Purchaser hereby represents and
warrants to the Seller as follows:

     6.01 CORPORATE ORGANIZATION . Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with full power to own or lease its properties and to conduct its business in
the manner and in the places where such properties are owned or leased or such
business is conducted by it. Except as listed on Schedule 6, Purchaser has no
subsidiaries or affiliated companies and does not otherwise directly or
indirectly control any other business entity.

     6.02 CAPITALIZATION. The authorized capital stock of Purchaser consists of
50,000,000 shares of Front Porch Common Stock, of which 19,810,768 shares will
be issued and outstanding, fully paid and non-assessable immediately prior to
the Closing, and 5,000,000 shares of preferred stock, par value $.001 per share,
of which no shares will be issued and immediately prior to the Closing.
Purchaser has received and intends to accept subscriptions for 2,007,050 shares
of Front Porch Common Stock received in connection with the offering described
in the Offering Memorandum. There are 3,150,000 shares of Front Porch Common
Stock reserved for issuance upon the exercise of outstanding warrants
exercisable at $0.50 per share and 800,000 shares of Front Porch Common Stock
reserved for issuance upon the exercise of outstanding warrants exercisable at
$1.00 per share. There are 6,000,000 shares of Front Porch Common Stock reserved
for issuance to employees, consultants or directors pursuant to the 2000 Equity
Incentive Plan of Purchaser (the "Equity Incentive Plan"). There are options to
purchase 25,000 shares of Front Porch Common Stock pursuant to the Equity
Incentive Plan presently outstanding. There are no other options, warrants,
conversion privileges, preemptive rights, rights of first refusal or other
rights presently outstanding to purchase any of the authorized but unissued
capital stock of Purchaser. To Purchaser's knowledge, except as set forth on
Schedule 6, there are no agreements among shareholders of Purchaser concerning
the purchase or sale of securities of Purchaser. Purchaser has not reserved for
issuance any shares of capital stock except as set forth herein or on Schedule
6.

                                       34
<PAGE>

     6.03 AUTHORITY AND VALIDITY. All corporate action on the part of Purchaser,
its officers, directors and shareholders necessary for the issuance of the
shares of Front Porch Common Stock to be issued to the Seller hereunder and the
performance of Purchaser's obligations hereunder has been taken or will be taken
prior to the Closing. Such shares, when issued, sold and delivered in accordance
with the terms hereof and for the consideration expressed herein, will be duly
and validly issued, fully paid and nonassessable and will be free and clear of
any preemptive or similar rights and any liens or encumbrances caused or created
by Purchaser. Purchaser has the requisite power and authority to enter into this
Agreement and each Related Document to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and each Related Document to which it
is a party have been duly authorized by all necessary corporate action of
Purchaser and no other action on the part of Purchaser is required in connection
therewith. This Agreement and each Related Document to which Purchaser is a
party constitutes, or when executed and delivered will constitute, a valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms, subject only to the Bankruptcy Exceptions.

     6.04 FINANCIAL STATEMENTS. Purchaser's unaudited financial statements at
and for the period ended June 30, 2000 (the "Financial Statements") have been
duly filed as part of Purchaser's quarterly reports filed with the Securities
and Exchange Commission under the Exchange Act. The Financial Statements are
complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis. The Financial Statements fairly present the financial position of the
Purchaser as of the respective dates and the results of operations for the
respective periods covered by the Financial Statements. Since June 30, 2000,
there have been no changes in the condition (financial or otherwise) of
Purchaser which, either individually or in the aggregate, materially and
adversely affected the business, prospects, condition, affairs, operations,
properties or assets of the Purchaser, except as set forth on Schedule 6. Since
June 30, 2000, Purchaser has not entered into any material transaction that is
not reflected in the Financial Statements or listed on Schedule 6.

     6.05 PROPRIETARY RIGHTS. To the knowledge of Purchaser, Purchaser owns or
has a valid right to use the patents, patent rights, trademarks, trade names,
brand names, inventions, processes, formulae, licenses, permits, copyrights and
other intellectual property rights necessary for the operation of Purchaser's
business as presently conducted. Purchaser has no obligation to compensate any
Person for the use of any such patents or other rights, and has granted to no
Person any license or other rights to use in any manner any such patents or
other rights of Purchaser, whether requiring the payment of royalties or not.

     6.06 MATERIAL CONTRACTS AND OBLIGATIONS.All agreements, contracts,
liabilities and other obligations to which Purchaser is a party or by which it
is bound, except such as individually may not involve more than fifty thousand
dollars ($50,000) and collectively not aggregate more than two hundred thousand
dollars ($200,000), are listed on Schedule 6. All of such agreements and
contracts are valid and binding agreements of Purchaser and, to the knowledge of
Purchaser, each other party thereto, and enforceable in accordance with their
terms in all material respects, subject to the Bankruptcy Exceptions.

                                       35
<PAGE>

     6.07 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental authority is required to be obtained by Purchaser in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for informational
filings with the Securities and Exchange Commission and the Bureau of Economic
Analysis of the United States Department of Commerce.

     6.08 NO VIOLATION. The execution and delivery by Purchaser of this
Agreement and each Related Document to which Purchaser is a party, and the
consummation of the transactions contemplated hereby and thereby and compliance
with the terms hereof and thereof, does not and will not, conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any Encumbrance of any kind upon any of the properties or assets
of Purchaser under, any provision of (i) the Certificate of Incorporation or
By-laws of Purchaser, (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment or loan or other agreement to which
Purchaser is a party or by which any of its properties or assets are bound, or
(iii) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Purchaser or its property or assets.

     6.09 COMPLIANCE WITH OTHER INSTRUMENTS. Purchaser is not in violation,
breach or default (whether or not declared) of any term of its Certificate of
Incorporation or Bylaws, or of any material term or provision of any mortgage,
indenture, loan agreement, contract, agreement or instrument to which Purchaser
is a party or by which its property is bound, or, to its knowledge, of any
provision of any state or Federal judgment, decree, order, statute, rule or
regulation applicable to or binding upon Purchaser; provided, however, that
Purchaser makes no representation with respect to any statute, rule or
regulation the violation or breach of which will not have any material adverse
effect on Purchaser's assets, business, prospects, affairs, operations or
financial condition, in each case taken as a whole. To Purchaser's knowledge, no
employee of Purchaser is in violation of (a) any term of any employment
contract, patent or other proprietary information disclosure agreement or any
other contract or agreement relating to the right of any such employee to be
employed by Purchaser because of the nature of the business conducted or
proposed to be conducted by Purchaser or for any other reason or (b) any
statutory law (including governmental rules and regulations) or common law
principle in the areas of unfair competition, trade secrets or proprietary
information that would prohibit the use of information used or proposed to be
used by Purchaser.

     6.10 REGISTRATION RIGHTS. Except as set forth in Schedule 6, Purchaser is
not under any obligation to register under the Securities Act any of its
presently outstanding securities or any of its securities which may hereafter be
issued.

     6.11 BOARD OF DIRECTORS. Except as set forth in SCHEDULE 6, there exist no
agreements or arrangements with respect to the nomination or election of
directors of Purchaser.

                                       36
<PAGE>

     6.12 EMPLOYEE COMPENSATION PLANS. Except as set forth in SCHEDULE 6,
Purchaser is not party to or bound by any currently effective employment
contracts, deferred compensation agreements, bonus plans, incentive plans,
retirement agreements or other employee compensation agreement, except oral
employment agreements, offer letters or arrangements terminable by Purchaser at
will.

     6.13 BROKER'S FEES. Neither Purchaser nor anyone acting on its behalf has
made any commitment or done any other act which would create any liability for
any brokerage, finder's or similar fees or commissions in connection with the
transactions contemplated by this Agreement.

     6.14 LITIGATION. There is no litigation or governmental or administrative
proceeding or investigation pending or, to Purchaser's knowledge, threatened
against Purchaser or any of its Affiliates which, either in any case or in the
aggregate, would prevent or hinder the consummation of the transactions
contemplated by this Agreement or which would have any material adverse effect
on Purchaser's assets, business, prospects, affairs, operations or financial
condition, in each case taken as a whole, or which questions the validity of
this Agreement or any action taken or to be taken in connection herewith.

     6.15 EMPLOYEES OF THE SELLER. Purchaser does not have any agreement with
any current employee of the Seller that provides for (i) having such employee of
the Seller decline an offer of employment from Purchaser in connection with this
Agreement for the purpose of rendering such employee eligible to receive
severance payments or other termination benefits from the Seller, and (ii) the
subsequent hiring of such employee by Purchaser.

     6.16 DISCLOSURE. Purchaser has filed, on a timely basis, all reports
required to be filed by Purchaser under the Exchange Act. The reports filed by
Purchaser under the Securities Act did not, on the dates such reports were
filed, include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.

     6.17 ENVIRONMENTAL MATTERS.

        (a) COMPLIANCE. (i) Purchaser is in compliance with all applicable
Environmental Laws; (ii) Purchaser has not received any written communication
from any Person that alleges that Purchaser is not in compliance with applicable
Environmental Laws; and (iii) there have not been any Releases of Hazardous
Materials by Purchaser or, to the knowledge of Purchaser, by any non-Affiliate
of Purchaser, at any property currently or formerly owned or operated by
Purchaser that occurred during the period of Purchaser's ownership or operation
of such property.

        (b) ENVIRONMENTAL PERMITS. Purchaser has all Environmental Permits
necessary for the conduct and operation of Purchaser's business, and all such
permits are in good standing or, where applicable, a renewal application has
been timely filed and is pending agency approval, and Purchaser is in compliance
with all terms and conditions of all such Environmental

                                       37
<PAGE>

Permits and are not required to make any expenditure in order to obtain or renew
any Environmental Permits.

        (c) ENVIRONMENTAL CLAIMS. There are no Environmental Claims pending or,
to the knowledge of Purchaser, threatened against Purchaser, or against any real
or personal property or operation that Purchaser owns, leases or manages.

     6.18 CONFLICTS OF INTEREST. Except as set forth in Schedule 6, to the
knowledge of Purchaser, no officer or director of Purchaser or any of its
Affiliates has, either directly or indirectly, (a) an interest in any
corporation, partnership, proprietorship, association or other person or entity
which furnishes or sells services or products to Purchaser or which purchases
services or products from Purchaser or whose services or products are similar to
those furnished or sold by Purchaser, or (b) a beneficial interest in any
contract, agreement or commitment to which Purchaser may be bound. To the
knowledge of Purchaser, none of the officers of Purchaser owns, directly or
indirectly, of record or beneficially, more than one percent (1%) of the
outstanding voting securities (which will include any security or option
convertible into or exercisable for voting securities) of any corporation with
which Purchaser does business, nor is any officer of Purchaser a general partner
or limited partner in a partnership with which Purchaser does business in which
he has a direct or indirect interest in more than one percent (1%) of the
profits of such partnership.

                                   ARTICLE VII

                    CONDITIONS OF CLOSING; CERTAIN COVENANTS
                    ----------------------------------------

     7.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER HEREUNDER. All
obligations of Purchaser hereunder with respect to the purchase and sale of the
Acquired Assets are subject to the fulfillment to the satisfaction of Purchaser
and its legal counsel, prior to or at the Closing, of each of the following
conditions, except to the extent that Purchaser may waive any one or more
thereof:

        (a) The representations and warranties contained in Article V of this
Agreement, the schedules hereto and in each Related Document delivered by the
Seller pursuant hereto or in connection with the transactions contemplated
hereby shall be true, complete and accurate in all material respects as of the
date when made and at and as of the Closing Date as though such representations
and warranties were made at and as of such date, except for representations and
warranties that speak as of a specific date or time, which need only be true and
correct as of such date or time.

        (b) The Seller shall have performed and complied in all material
respects with all agreements, obligations and conditions required by this
Agreement to be performed or complied with by it on or prior to the Closing.

                                       38
<PAGE>

        (c) No suit, action, investigation, inquiry or other proceeding by any
governmental body or other Person or legal or administrative proceeding shall
have been instituted or, to the knowledge of Purchaser, threatened, which seeks
to restrain, enjoin, prevent the consummation or otherwise restrict the
transactions contemplated by this Agreement or which questions the validity or
legality of the transactions contemplated hereby.

        (d) From the date of this Agreement to the Closing Date, the Business
shall not have suffered any Material Adverse Effect.

        (e) [Reserved].

        (f) The Seller shall have delivered to Purchaser, or cause to be
delivered to Purchaser, the other items required to be delivered to Purchaser in
accordance with Section 3.02 hereof.

        (g) The Seller shall have furnished Purchaser with such certificates to
evidence compliance with the conditions set forth in this Section 7.01 as may
reasonably be requested by Purchaser or its legal counsel.

     7.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER HEREUNDER. All
obligations of the Seller hereunder with respect to the purchase and sale of the
Acquired Assets and the other agreements hereunder are subject to the
fulfillment to the satisfaction of the Seller and its legal counsel, prior to or
at the Closing, of each of the following conditions, except to the extent that
the Seller may waive any one or more thereof:

        (a) The representations and warranties contained in Article VI hereof,
the schedules hereto, and in each Related Document to be delivered by Purchaser
pursuant hereto or in connection with the transactions contemplated hereby shall
be true, complete and accurate in all material respects as of the date when made
and at and as of the Closing Date as though such representations and warranties
were made at and as of such date, except for representations and warranties that
speak as of a specific date or time, which need only be true and correct as of
such date or time.

        (b) Purchaser shall have performed and complied in all material respects
with all agreements, obligations and conditions required by this Agreement to be
performed or complied with by Purchaser on or prior to the Closing.

        (c) No suit, action, investigation, inquiry or other proceeding by any
governmental body or other Person or legal or administrative proceeding shall
have been instituted or, to the knowledge of the Seller, threatened which seeks
to restrain, enjoin, prevent the consummation of or otherwise restrict the
transactions contemplated by this Agreement or which questions the validity or
legality of the transactions contemplated hereby.

                                       39
<PAGE>

        (d) Purchaser shall have delivered to the Seller, or cause to be
delivered to the Seller, the payments and other items required to be delivered
to the Seller in accordance with Section 3.03 hereof.

        (e) Purchaser shall have furnished the Seller with such certificates of
Purchaser to evidence compliance with the conditions set forth in this Section
7.02 as may reasonably be requested by the Seller or its legal counsel.

        (f) From the date of this Agreement to the Closing Date, the Purchaser's
business shall not have suffered any Material Adverse Effect.

        (g) Purchaser shall have completed the private offering of its shares as
contemplated by the private placement memorandum and supplement thereto
described in Section 5.02(d), which offering shall have resulted in gross
proceeds of at least $5,500,000.

                                  ARTICLE VIII

                           SURVIVAL OF REPRESENTATIONS
                         AND WARRANTIES; INDEMNIFICATION
                         -------------------------------

     8.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by any party hereto in this Agreement or in the attached
Schedules or in any exhibit or certificate delivered pursuant hereto shall
survive the Closing hereunder and any investigation at any time made by or on
behalf of any other party through the third anniversary of the Closing Date,
except with respect to Sections 5.01 and 6.01 ("Organization"), 5.02
("Investment Representations"), 6.02 ("Capitalization"), 5.03 and 6.03
("Authorization"/"Authority and Validity"), 5.04 ("Valid and Binding"), 6.04
("Financial Statements"), 5.05 ("No Violation"), 5.06 ("Consents and
Approvals"), 5.10 ("Taxes"), 5.15 ("Environmental"), 6.07 ("Consents and
Approvals of Governmental Authorities"), 6.08 ("No Violation") and 6.17
("Environmental"), which shall survive until the expiration of the statute of
limitations applicable thereto. No investigation by either party shall relieve
the other party from any liability for any misrepresentation, misleading
statement or omission made in this Agreement or in connection with the
transactions contemplated hereby.

     8.02 NOTICE OF DAMAGES. A party seeking indemnity hereunder (the
"Indemnified Party") will give the party from whom indemnity is sought hereunder
(the "Indemnitor") prompt notice (hereinafter, the "Indemnification Notice") of
any demands, claims, actions or causes of action (collectively, "Claims")
asserted against the Indemnified Party. Failure to give such notice shall not
relieve the Indemnitor of any obligations which the Indemnitor may have to the
Indemnified Party under this Article VIII, except to the extent that such
failure has prejudiced the Indemnitor under the provisions for indemnification
contained in this Agreement. For purposes of this Article VIII, Purchaser, on
the one hand, and the Seller, on the other hand, shall be deemed to be the
"Indemnified Party" or the "Indemnitor", as the case may be.

                                       40
<PAGE>

     8.03 AGREEMENTS TO INDEMNIFY.

        (a) Subject to the terms and conditions of this Article VIII, the Seller
covenants and agrees to indemnify, defend and hold harmless Purchaser and its
Affiliates (including any officer, director, stockholder, partner, member,
employee, agent or representative of any thereof) (a "Purchaser Affiliate") from
and against all assessments, losses, damages, liabilities, costs and expenses,
including without limitation interest, penalties and reasonable fees and
expenses of legal counsel (collectively, "Damages") imposed upon or incurred by
a Purchaser or any Purchaser Affiliate arising out of, in connection with or
resulting from:

                        (i) any breach of any representation or warranty of, or
            nonfulfillment of any covenant or agreement of, the Seller contained
            in or made pursuant to this Agreement or any Related Document to
            which the Seller is a party;

                        (ii) any and all Excluded Liabilities; and

                        (iii) any and all claims made by creditors of the Seller
            relating to the provisions of any "bulk sales" laws of any state or
            other jurisdiction that be applicable to the transactions
            contemplated hereby.

        (b) Subject to the terms and conditions of this Article VIII, Purchaser
covenants and agrees to indemnify, defend and hold harmless the Seller and its
Affiliates (including any successor or assigns, officer, director, stockholder,
partner, member, employee, agent or representative thereof) from and against all
Damages imposed upon or incurred by such indemnified party arising out of or in
connection with or resulting from:

                        (i) any breach of any representation or warranty of, or
            nonfulfillment of any covenant or agreement of, Purchaser contained
            in or made pursuant to this Agreement or any Related Document to
            which Purchaser is a party; and

                        (ii) any and all Assumed Liabilities.

        (c) The Indemnitor shall reimburse an Indemnified Party promptly after
delivery of an Indemnification Notice certifying that the Indemnified Party has
incurred Damages after compliance with the terms of this Article VIII, PROVIDED,
HOWEVER, that the Indemnitor shall have the right to contest any such Damages or
its obligations to indemnify therefor in accordance with the terms of this
Agreement.

     8.04 CONDITIONS OF INDEMNIFICATION OF THIRD PARTY CLAIMS. The obligations
and liabilities of an Indemnitor under Section 8.03 hereof with respect to
Damages resulting from Claims by Persons not party to this Agreement shall be
subject to the following terms and conditions:

        (a) Promptly after delivery of an Indemnification Notice in respect of a
Claim and subject to paragraph (c) of this Section 8.04, the Indemnitor may
elect, by written notice to

                                       41
<PAGE>

the Indemnified Party, to undertake the defense thereof with counsel reasonably
satisfactory to the Indemnified Party, at the sole cost and expense of
Indemnitor. If the Indemnitor chooses to defend any claim, the Indemnified Party
shall cooperate with all reasonable requests of the Indemnitor and shall make
available to the Indemnitor any books, records or other documents within its
control that are necessary or appropriate for such defense.

        (b) In the event that the Indemnitor, within a reasonable time after
receipt of an Indemnification Notice, does not so elect to defend such Claim,
the Indemnified Party will have the right (upon further notice to the
Indemnitor) to undertake the defense, compromise or settlement of such Claim for
the account of the Indemnitor, subject to the right of the Indemnitor to assume
the defense of such Claim pursuant to the terms of paragraph (a) of this Section
8.04 at any time prior to settlement, compromise or final determination thereof,
PROVIDED, that the Indemnitor reimburses in full all costs of the Indemnified
Party (including reasonable attorney's fees and expenses) incurred by it in
connection with such defense prior to such assumption.

        (c) Anything in this Section 8.04 to the contrary notwithstanding, (i)
if the Indemnified Party reasonably believes there is a reasonable probability
that a Claim may materially and adversely affect the Indemnified Party, the
Indemnified Party shall have the right to participate in the defense, compromise
or settlement of such Claim, provided that the Indemnitor shall not be liable
for expenses of separate counsel of the Indemnified Party engaged for such
purpose, (ii) no person who has undertaken to defend a Claim under Section
8.04(a) hereof shall, without written consent of all Indemnified Parties, settle
or compromise any Claim or consent to entry of any judgment which does not
include as an unconditional term thereof the release by the claimant or the
plaintiff of all Indemnified Parties from all liability arising from events
which allegedly give rise to such Claim.

     8.05 LIMITATIONS ON INDEMNIFICATION.

        (a) Notwithstanding anything to the contrary provided elsewhere in this
Agreement, the obligations of any Indemnitor under this Agreement to indemnify
any Indemnified Party with respect to any Claim pursuant to Section 8.03 shall
be of no force and forever barred unless the Indemnified Party has given the
Indemnitor notice of such claim prior to the third anniversary of the Closing
Date, provided that there shall be no time limit for Claims made for a breach of
the representations and warranties contained in Sections 5.01 and 6.01
("Organization"), 5.02 ("Investment Representations"), 6.02 ("Capitalization"),
5.03 and 6.03 ("Authorization"/"Authority and Validity"), 5.04 ("Valid and
Binding"), 6.04 ("Financial Statements"), 5.05 ("No Violation"), 5.06 ("Consents
and Approvals"), 5.10 ("Taxes"), 5.15 ("Environmental"), 6.07 ("Consents and
Approvals of Governmental Authorities"), 6.08 ("No Violation") and 6.17
("Environmental") other than the statute of limitations applicable thereto. In
any event, the parties shall fully cooperate with each other and their
respective counsel in accordance with Section 8.04 in connection with any such
litigation, defense, settlement or other attempted resolution.

        (b) Notwithstanding the reference in certain representations and
warranties in Articles V and VI to exceptions set forth in a specific Schedule
number, such representations and

                                       42
<PAGE>

warranties shall be deemed to be qualified by all information fairly disclosed
in all Schedules attached hereto, except to the extent a party has acted in bad
faith in failing to include an exception in the proper Schedule.

                                   ARTICLE IX

                                   TERMINATION
                                   -----------

     9.01 TERMINATION OF AGREEMENT. The parties may terminate this Agreement
prior to the Closing as follows:

        (a) Purchaser and the Seller may terminate this Agreement by mutual
written consent;

        (b) Purchaser may terminate this Agreement by giving written notice to
the Seller if the Closing shall fail to occur by reason of the failure of any
condition precedent under Section 7.01 hereof (unless the failure results
primarily from a breach by Purchaser of any representation, warranty or covenant
contained in this Agreement);

        (c) the Seller may terminate this Agreement by giving written notice to
Purchaser if the Closing shall not have occurred by reason of the failure of any
condition precedent under Section 7.02 hereof (unless the failure results
primarily from a breach by the Seller of any representation, warranty or
covenant contained in this Agreement);

        (d) either Purchaser or the Seller may terminate this Agreement on 20
days written notice if the other party is in material breach of this Agreement
and such breach is not cured within such 20 day period; or

        (e) either Purchaser or the Seller may terminate this Agreement upon
written notice if the Closing shall not have occurred on or prior to October 15,
2000.

     9.02 EFFECT OF TERMINATION. If either Purchaser or the Seller terminates
this Agreement pursuant to Section 9.01, (a) each of Purchaser and the Seller
will redeliver to the party furnishing the same or destroy all documents, work
papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof;
(b) neither the Seller nor Purchaser shall make or issue, or cause to be made or
issued, any announcement or written statement concerning termination of this
Agreement or the transactions contemplated hereby for dissemination to the
general public without the prior written consent of the other parties except as
required by law or legal process; and (c) this Agreement shall become wholly
void and of no force or effect, without any liability or further obligation on
the part of the Seller or Purchaser or any director, officer, or principal
thereof, except for liabilities of one party hereto to another arising from a
breach of this Agreement prior to termination in accordance with Section 9.01
(including without limitation the breach of a

                                       43
<PAGE>

representation or covenant that results in the failure of the Closing to occur)
and except that the provisions set forth in this Section 9.02 shall survive such
termination.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS
                            ------------------------

     10.01 EXPENSES. Except as otherwise provided herein, the Seller shall pay
all expenses incurred by or on behalf of the Seller, and Purchaser shall pay all
expenses incurred by or on behalf of Purchaser, in each case in connection with
this Agreement or any transaction contemplated by this Agreement, whether or not
such transaction shall be consummated, including without limitation all fees of
its or their respective legal counsel and accountants.

     10.02 NOTICES. All notices, requests, demands, consents or waivers and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand or by telecopy
(with immediate confirmation), one business day after being sent if by
nationally recognized overnight courier or if mailed, then four days after being
sent by certified or registered mail, return receipt requested with postage
prepaid:

                         (i) If to the Seller:

                                    Storage Technology Corporation
                                    One StorageTek Drive
                                    Louisville, CO  80028
                                    Attention: Robert S. Kocol, Corporate Vice
                                       President and Chief Financial Officer
                                    Telecopy:  (303) 673-4151

                           with a copy to:

                                    Storage Technology Corporation
                                    One StorageTek Drive
                                    Louisville, CO 80028-4309
                                    Attention: Jeffrey M. Dumas, General Counsel
                                    Telecopy: (303) 673-4151

                         (ii) If to Purchaser, to:

                                    Front Porch Digital Inc.
                                    1810 Chapel Avenue West, Suite 130
                                    Cherry Hill, NJ  08002
                                    Attention:  Chief Executive Officer
                                    Telecopy:  (856) 663-3503

                                       44
<PAGE>

                           with a copy to:

                                    Pryor Cashman Sherman & Flynn LLP
                                    410 Park Avenue
                                    New York, New York 10022
                                    Attention:  Eric M. Hellige, Esq.
                                    Telecopy:  (212) 326-0806

or, in each case, to such other Person or address as any party shall furnish to
the other parties in writing.

     10.03 BINDING; NO ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
either party without the prior written consent of the other party; PROVIDED,
HOWEVER, that Purchaser may assign all or part of this Agreement and its rights
hereunder, without the consent of the Seller, (a) to an Affiliate now existing
or formed hereafter or (b) with respect to any of the Acquired Assets acquired
by Purchaser hereunder, from and after the Closing to a Person, not a party to
this Agreement, who acquires substantially all of the assets of such party and
who assumes all of the obligations of such party hereunder.

     10.04 SEVERABILITY. If in any jurisdiction, any provision of this Agreement
or its application to any party or circumstance is restricted, prohibited or
unenforceable, such provision shall, as to such jurisdiction, be ineffective
only to the extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting the validity
or enforceability of such provision in any other jurisdiction or its application
to other parties or circumstances. In addition, if any one or more of the
provisions contained in this Agreement shall for any reason in any jurisdiction
be held to be excessively broad as to time, duration, geographical scope,
activity or subject, it shall be construed, by limiting and reducing it, so as
to be enforceable to the extent compatible with the applicable law of such
jurisdiction as it shall then appear.

     10.05 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.

            (a) All of the terms, conditions, and other provisions of this
Agreement shall be interpreted and governed by reference to the laws of the
State of Delaware, and any dispute arising therefrom and the remedies available
shall be determined in accordance with such laws without giving effect to the
principles of conflicts of law.

            (b) Each of the parties hereto hereby irrevocably and
unconditionally submits to the non-exclusive jurisdiction of any Delaware state
or federal court sitting in Wilmington, Delaware in any action or proceeding
arising out of or relating to this Agreement, any other agreement or document
delivered pursuant hereto or any transaction contemplated hereby. Each of the
parties hereto hereby irrevocably waives, to the fullest extent it or he may
effectively do

                                       45
<PAGE>

so, the defense of an inconvenient forum to the maintenance of such action or
proceeding. Each of the parties hereto also irrevocably and unconditionally
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process by certified mail to such party and its
or his counsel at their respective addresses specified in Section 10.02. Each of
the parties hereto further irrevocably and unconditionally agrees that a final
judgment in any such action or proceeding (after exhaustion of all appeals or
expiration of the time for appeal) shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

        10.06 COUNTERPARTS. This Agreement may be executed simultaneously 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.

        10.07 HEADINGS. The title of this Agreement and the headings of the
Sections and Articles of and the Schedules to this Agreement are for reference
purposes only and shall not be used in construing or interpreting this
Agreement.

        10.08 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement and each
Related Document delivered pursuant to the terms hereof, sets forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof and supersedes all prior agreements, promises, covenants,
arrangements, representations or warranties, whether oral or written, by any
party hereto or any officer, director, employee or representative of any party
hereto. No modification or waiver of any provision of this Agreement shall be
valid unless it is in writing and signed by the party to be charged therewith.
The waiver of breach of any term or condition of this Agreement shall not be
deemed to constitute a waiver of any other breach of the same or any other term
or condition.

        10.09 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any Person other than the parties hereto and their
successors or assigns any rights or remedies under or by reason of this
Agreement.

        10.10 PUBLICITY. From the date hereof through the Closing Date, no party
hereto shall make any announcement of the transactions contemplated hereby
without the prior written consent of the other party hereto. From and after the
Closing Date, except as otherwise required by law, the neither the Seller nor
Purchaser shall make any announcement, issue any press release or disseminate
information to the press or any third party regarding this Agreement or the
transactions contemplated by this Agreement without the prior written consent of
the other party hereto.

        10.11 NO PRESUMPTION. The Seller and Purchaser have each participated in
the negotiation and drafting of this Agreement and have each been represented
throughout to its satisfaction by legal counsel of its choosing. In the event
any ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties hereto

                                       46
<PAGE>

and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.

        10.12 GENDER; TENSE, ETC. Where the context or construction requires,
all words applied in the plural shall be deemed to have been used in the
singular, and vice versa; the masculine shall include the feminine and neuter,
and vice versa; and the present tense shall include the past and future tense,
and vice versa.

        10.13 REFERENCE TO DAYS. All references to days in this Agreement shall
be deemed to refer to calendar days, unless otherwise specified.

        10.14 LIMITATION OF REMEDY. In no event shall either party be liable to
the other for any special, consequential, incidental or indirect damages
(including without limitation damages based on lost profits, lost opportunity or
the like) based on any claim arising under this Agreement, whether such
agreement is based on contract, tort or any other legal theory. This limitation
shall not apply to a party's obligation to indemnify against third party claims
as set forth in Section 8.04.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York, all on the day and year first
above written.

                   PURCHASER:

                            FRONT PORCH DIGITAL INC.

                            By: /s/ TIM PETRY
                                ----------------------------
                                 Name:  Tim Petry
                                 Title: Chief Financial Officer

                   SELLER:

                            STORAGE TECHNOLOGY CORPORATION

                            By: /s/ MARK D. MCGREGOR
                                ----------------------------
                                 Name:  Mark D. McGregor
                                 Title: Vice President and
                                        Corporate Treasurer

                                       47EXH 10.2

                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT, dated as of October 10, 2000, between FRONT
PORCH DIGITAL, INC., a corporation organized under the laws of Nevada (the
"Company"), and STORAGE TECHNOLOGY CORPORATION, a corporation organized under
the laws of Delaware ("StorageTek").

                              W I T N E S S E T H:

     WHEREAS, on the date hereof, the Company has agreed to issue to StorageTek
shares of Common Stock (as defined herein) pursuant to the terms of an Asset
Purchase Agreement dated as of October 10, 2000 (the "Purchase Agreement")
between the Company and StorageTek; and

     WHEREAS, as a condition to the consummation of the transactions
contemplated by the Purchase Agreement, the Company has agreed to provide
certain registration rights pursuant to the terms of this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:

        1. DEFINITIONS. For purposes of this Agreement, capitalized terms used
herein shall have the meanings set forth in the preambles hereto and in this
Section 1.

            1.1 "COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.

            1.2 "COMMON STOCK" shall mean the common stock, par value $.001 per
share, of the Company or, in the case of a conversion, reclassification or
exchange (or any other adjustment or readjustment under Section 4 of the
warrants included in the Existing Rights Agreements) of such shares of such
Common Stock, shares of the stock issued or issuable in respect of such shares
of Common Stock, and all provisions of this Agreement shall be applied
appropriately thereto and to any stock resulting therefrom.

            1.3 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.

            1.4 "EXISTING RIGHTS AGREEMENTS" shall mean (i) the warrant
agreements dated as of May 2, 2000 between the Company and the Warrantholders
for the purchase of an

<PAGE>

aggregate of 3,950,000 shares of Common Stock and any warrant agreement executed
and delivered by the Company upon the exchange or transfer of any warrants
evidenced by such warrant agreements; (ii) the Registration Rights Agreement
dated as of October 10, 2000 between the Company and Equity Pier LLC; and (iii)
this Agreement.

            1.5 "FORM S-3" means such form under the Securities Act as in effect
on the date hereof or any registration form under the Securities Act
subsequently adopted by the Commission which permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.

            1.6 "HOLDER" shall mean any holder of Registrable Securities;
provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a public sale under Rule 144
under the Securities Act or any similar or successor rule shall not be
considered a Holder.

            1.7 "INITIAL PUBLIC OFFERING" means the first time at which an
offering, whether primary or secondary, of Common Stock or options, warrants or
other securities convertible into or exchangeable or exercisable for Common
Stock, is registered pursuant to an effective registration statement (other than
a registration statement on Form S-4 or Form S-8 or any successor forms thereto)
filed by Seller under the Securities Act. An Initial Public Offering will be
deemed to be consummated on the date such registration is declared effective by
the Commission.

            1.8 "INITIATING HOLDERS" shall mean Holders representing (on a fully
diluted basis) at least twenty-five percent (25%) of the total number of
Registrable Securities.

            1.9 "PERSON" shall mean any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind.

            1.10 "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement with the
Commission in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement by the Commission.

            1.11 "REGISTRABLE SECURITIES" shall mean the shares of Common Stock
issued to StorageTek pursuant to the Purchase Agreement; PROVIDED, HOWEVER, that
such shares of Common Stock shall only be treated as Registrable Securities
hereunder if and so long as they have not been sold in a registered public
offering or have not been sold to the public pursuant to Rule 144 under the
Securities Act or any similar or successor rule.

            1.12 "REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in compliance herewith, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, the

                                       2
<PAGE>

reasonable fees and expenses (subject to documentation thereof) of one counsel
for all Holders and Other Stockholders that offer securities being sold pursuant
to the Existing Rights Agreements, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).

            1.13 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.

            1.14 "SELLING EXPENSES" shall mean all underwriting discounts and
commissions applicable to the sale of Registrable Securities.

            1.15 "WARRANTHOLDERS" shall mean Navesink Venture Partners LLC,
Hawke Company Ltd, Tillgrove Investments Ltd, Madona Resources Ltd and Donald
Maggi.

     2. REQUESTED REGISTRATION.

            2.1 REQUEST FOR REGISTRATION. At any time after the earlier of (i)
consummation of an Initial Public Offering or (ii) August 2, 2002 (such date
being hereinafter referred to as the "Demand Date"), if the Company shall
receive from Initiating Holders a written request that the Company effect any
registration with respect to Registrable Securities the Company will:

                        (a) promptly give written notice of the proposed
            registration to all other Holders; and

                        (b) as soon as practicable, use its best efforts to
            effect such registration (including, without limitation, the
            execution of an undertaking to file post-effective amendments,
            appropriate qualification under the blue sky or other state
            securities laws requested by Initiating Holders and appropriate
            compliance with applicable regulations issued under the Securities
            Act) as may be so requested and as would permit or facilitate the
            sale and distribution of all or such portion of such Registrable
            Securities as are specified in such request, together with all or
            such portion of the Registrable Securities of any Holder or Holders
            joining in such request as are specified in a written request given
            within thirty (30) days after receipt of such written notice from
            the Company; provided, that the Company shall not be obligated to
            effect, or to take any action to effect, any such registration
            pursuant to this Section 2:

                                    (i) in any particular jurisdiction in which
                        the Company would be required to execute a general
                        consent to service of process in effecting such
                        registration, qualification or compliance, unless the
                        Company is already subject to service in such
                        jurisdiction and except as may be required by the
                        Securities Act or applicable rules or regulations
                        thereunder;

                                       3
<PAGE>

                                    (ii) less than ninety (90) calendar days
                        after the effective date of any registration declared or
                        ordered effective other than a registration on Form S-3
                        or Form S-8;

                                    (iii) if, while a registration request is
                        pending pursuant to this Section 2, the Company
                        determines, in the good faith judgment of the Board of
                        Directors of the Company, with the advice of counsel,
                        that the filing of a registration statement would
                        require the disclosure of non-public material
                        information the disclosure of which would have a
                        material adverse effect on the Company or would
                        otherwise materially adversely affect a financing,
                        acquisition, disposition, merger or other significant
                        transaction, the Company shall deliver a certificate to
                        such effect signed by its President to the proposed
                        selling Holders and the Company shall not be required to
                        effect a registration pursuant to this Section 2 until
                        the earlier of (A) three (3) days after the date upon
                        which such material information is disclosed to the
                        public or ceases to be material or (B) 90 days after the
                        Company makes such good faith determination; provided,
                        however, that the Company shall not utilize this right
                        more than once in any twelve month period; or

                                    (iv) except as set forth in Section 2.5,
                        after the second such registration pursuant to this
                        Section 2.1 has been declared or ordered effective.

     Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
or requests of the Initiating Holders.

            2.2 ADDITIONAL SHARES TO BE INCLUDED. The registration statement
filed pursuant to the request of the Initiating Holders may, subject to the
provisions of Sections 2.4 and 3.3 below, include (a) other securities of the
Company (the "Additional Shares") which are held by (i) officers or directors of
the Company who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration or (ii) other persons who, by
virtue of agreements with the Company, including the Existing Rights Agreements,
are entitled to include their securities in any such registration (the "Other
Stockholders"), and (b) securities of the Company being sold for the account of
the Company.

          2.3 UNDERWRITING.

                        (a) If the Initiating Holders intend to distribute the
            Registrable Securities covered by their request by means of an
            underwriting, they shall so advise the Company as a part of their
            request made pursuant to this Section 2 and the Company shall
            include such information in the written notice to other Holders
            referred to in Section 2.1 above. The right of any Holder to
            registration pursuant to this Section 2 shall be conditioned upon
            such Holder's participation in

                                       4
<PAGE>

            such underwriting and the inclusion of such Holder's
            Registrable Securities in the underwriting to the extent provided
            herein and subject to the limitations provided herein. A Holder may
            elect to include in such underwriting all or a part of the
            Registrable Securities he holds.

                        (b) The Company shall (together with all Holders,
            officers, directors and Other Stockholders proposing to distribute
            their securities through such underwriting) negotiate and enter into
            an underwriting agreement in customary form with the representative
            of the underwriter or underwriters selected for such underwriting by
            a majority in interest of the Initiating Holders, which
            underwriter(s) shall be reasonably acceptable to the Company.

            2.4 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any other
provision of this Section 2, if the representative of the underwriters advises
the Initiating Holders in writing that marketing factors require a limitation on
the number of shares to be underwritten, first the Additional Shares and any
securities being sold for the account of the Company shall be excluded from such
registration pursuant to the priorities set forth in Section 3.3 of this
Agreement and, if a limitation on the number of shares is still required, the
number of shares that may be included in the registration and underwriting shall
be allocated among all Holders, including Initiating Holders, in proportion, as
nearly practicable, to the respective amounts of Registrable Securities which
they have requested to be included in such registration statement. If the
Company or any Holder, officer, director or Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of any
such underwriting, such Person may elect to withdraw such Person's Registrable
Securities or Additional Shares therefrom by written notice to the Company and
the underwriter and the Initiating Holders. Any Registrable Securities or other
securities excluded shall also be withdrawn from such registration. No
Registrable Securities or Additional Shares excluded from such registration by
reason of such underwriters' marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with this
Section 2.4, the Company or underwriter or underwriters selected as provided
above may round the number of Registrable Securities of any Holder which may be
included in such registration to the nearest 100 shares.

            2.5 ADDITIONAL DEMAND REGISTRATION. If with respect to the last
registration permitted to be exercised by the Holders of Registrable Securities
under Section 2.1, the Holders are unable to register all of their Registrable
Securities because of the operation of Section 2.4 hereof, such Holders shall be
entitled to require the Company to effect one additional registration to afford
the Holders an opportunity to register all such Registrable Securities. Such
additional registration shall again be subject to the provisions of this Section
2.

     3. COMPANY REGISTRATION.

            3.1 If the Company shall determine to register under the Securities
Act any of its equity securities or securities convertible into equity
securities either for its own account or the account of a security holder or
holders exercising any demand registration rights, other than a registration
relating solely to employee benefit plans, or a registration relating solely to
a Commission Rule 145 transaction, or a registration on Form S-4 or S-8 (or any
successor forms thereto), the Company will:

                                       5
<PAGE>

                        (a) promptly give to each Holder written notice thereof
            (which shall include a list of the jurisdictions in which the
            Company intends to attempt to qualify such securities under the
            applicable blue sky or other state securities laws); and

                        (b) include in such registration (and, subject to
            Section 2.1(b)(i), any related qualification under blue sky laws or
            other compliance), and in any underwriting involved therein, all the
            Registrable Securities specified in a written request or request,
            made by any Holder within thirty (30) days after receipt of the
            written notice from the Company described in clause (a) above,
            except as set forth in Section 3.3 below. Such written request may
            specify all or a part of a Holder's Registrable Securities.

            3.2 UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a). The right of any Holder to registration pursuant to
this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
any officers, directors or Other Stockholders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company.

            3.3 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any other
provision of this Section 3, if the representative of the underwriters advises
the Company in writing that marketing factors require a limitation or
elimination on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number of or
eliminate the Registrable Securities to be included in the registration and
underwriting. The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated as follows:
first, if such underwritten offering shall have been initiated by the Company
for the sale of securities for its own account, to the Company for securities
being sold for its own account; second, among the Holders and the Other
Stockholders that offer securities being sold pursuant to the Existing Rights
Agreements, in each case in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities or Additional Shares which they had
requested to be included in such registration pursuant to the Existing Rights
Agreements; third, if such underwritten offering shall not have been initiated
by the Company, to the Company for securities being sold for its own account;
and thereafter, the number of shares that may be included in the registration
statement and underwriting shall be allocated among all officers, directors or
remaining Other Stockholders, in each case in proportion, as nearly as
practicable, to the respective amounts of Additional Shares which they had
requested to be included in such registration at the time of filing the
registration statement. If any Holder of Registrable Securities or any officer,
director or Other Stockholder disapproves of the terms of any such underwriting,

                                       6
<PAGE>

he may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall also be withdrawn from such registration.
The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such
registration.

     4. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 2 or 3 of this Agreement shall be borne by the Company, except that
Selling Expenses shall be borne pro rata by each Holder in accordance with the
number of shares sold.

     5. REGISTRATION PROCEDURES.

            5.1 In the case of each registration effected by the Company
pursuant to this Agreement, the Company will keep each Holder advised in writing
as to the initiation of each registration and as to the completion thereof and
will, at its expense:

                        (a) use its best efforts to keep such registration
            effective for a period of 180 days or until the Holder or Holders
            have completed the distribution described in the registration
            statement relating thereto, whichever first occurs; provided,
            however, that the Company will keep such registration effective for
            longer than 180 days if the costs and expenses associated with such
            extended registration are borne by the selling Holders; and
            provided, further, that in the case of any registration of
            Registrable Securities on Form S-3 which are intended to be offered
            on a continuous or delayed basis, such 180-day period shall, at the
            cost and expense of the Company, be extended, if necessary, to keep
            the registration statement effective until all such Registrable
            Securities are sold, provided that Rule 415, or any successor rule
            under the Securities Act, permits an offering on a continuous or
            delayed basis, and provided, further, that applicable rules and
            regulations under the Securities Act governing the obligation to
            file a post-effective amendment permit, in lieu of filing a
            post-effective amendment which (y) includes any prospectus required
            by Section 10(a)(3) of the Securities Act or (z) reflects facts or
            events representing a material or fundamental change in the
            information set forth in the registration statement, the
            incorporation by reference of information otherwise required to be
            included in such post-effective amendment covered by (y) and (z)
            above to be contained in periodic reports filed pursuant to Section
            13 or 15(d) of the Exchange Act in the registration statement;

                        (b) Prepare and file with the Commission such amendments
            and supplements to such registration statement and the prospectus
            used in connection with such registration statement as may be
            necessary to comply with the provisions of the Securities Act with
            respect to the disposition of all securities covered by such
            registration statement;

                                       7
<PAGE>

                        (c) Furnish such number of prospectuses and other
            documents incident thereto, including any amendment of or supplement
            to the prospectus, as a Holder from time to time may reasonably
            request;

                        (d) Notify each seller of Registrable Securities covered
            by such registration statement at any time when a prospectus
            relating thereto is required to be delivered under the Securities
            Act of the happening of any event as a result of which the
            prospectus included in such registration statement, as then in
            effect, includes an untrue statement of a material fact or omits to
            state a material fact required to be stated therein or necessary to
            make the statements therein not misleading or incomplete in the
            light of the circumstances then existing, and at the request of any
            such seller, prepare and furnish to such seller a reasonable number
            of copies of a supplement to or an amendment of such prospectus as
            may be necessary so that, as thereafter delivered to the purchasers
            of such shares, such prospectus shall not include an untrue
            statement of a material fact or omit to state a material fact
            required to be stated therein or necessary to make the statements
            therein not misleading or incomplete in the light of the
            circumstances then existing;

                        (e) List all such Registrable Securities registered in
            such registration on each securities exchange or automated quotation
            system on which the Common Stock of the Company is then listed;

                        (f) Provide a transfer agent and registrar for all
            Registrable Securities and a CUSIP number for all such Registrable
            Securities, in each case not later than the effective date of such
            registration;

                        (g) Make available for inspection by any seller of
            Registrable Securities, any underwriter participating in any
            disposition pursuant to such registration statement, and any
            attorney or accountant retained by any such seller or underwriter,
            all financial and other records, pertinent corporate documents and
            properties of the Company, and cause the Company's officers and
            directors to supply all information reasonably requested by any such
            seller, underwriter, attorney or accountant in connection with such
            registration statement;

                        (h) Furnish to each selling Holder upon request a signed
            counterpart, addressed to each such selling Holder, of

                                    (i) an opinion of counsel for the Company,
                        dated the effective date of the registration statement
                        in form reasonably acceptable to the Company and such
                        counsel, and

                                    (ii) "comfort" letters signed by the
                        Company's independent public accountants who have
                        examined and reported on the Company's financial
                        statements included in the registration statement, to
                        the extent

                                       8
<PAGE>

                        permitted by the standards of the American
                        Institute of Certified Public Accountants, covering such
                        matters as are customarily covered in opinions of
                        issuer's counsel and accountants' "comfort" letters
                        delivered to underwriters in underwritten public
                        offerings of securities;

                        (i) Furnish to each selling Holder upon request a copy
            of all documents filed with and all correspondence from or to the
            Commission in connection with any such offering; and

                        (j) Make available to its security holders, as soon as
            reasonably practicable, an earnings statement covering the period of
            at least twelve months, but not more than eighteen months, beginning
            with the first month after the effective date of the Registration
            Statement, which earnings statement shall satisfy the provisions of
            Section 11(a) of the Securities Act.

            5.2 It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement that the Holders proposing
to register Registrable Securities shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and their
intended method of distribution of such Registrable Securities as the Company
shall reasonably request and as shall be required in connection with the action
to be taken by the Company.

            5.3 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to review such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each such Holder such access to the Company's books and
records and such opportunities to discuss the business of the Company with its
officers, its counsel and the independent public accountants who have certified
the Company's financial statements, as shall be necessary, in the opinion of
such Holders or such underwriters or their respective counsel, in order to
conduct a reasonable and diligent investigation within the meaning of the
Securities Act.

     6. INDEMNIFICATION.

            6.1 INDEMNIFICATION BY THE COMPANY. The Company will indemnify each
Holder, each of its officers, directors and partners, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any

                                       9
<PAGE>

violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers, directors
and partners, and each Person controlling such Holder, each such underwriter and
each Person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.

            6.2 INDEMNIFICATION BY THE HOLDERS. Each Holder will, if Registrable
Securities held by him are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company (other than such Holder) or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, each
other such Holder and each of their officers, directors and partners, and each
Person controlling such Holder or other stockholder, against all claims, losses,
damages, expenses and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, each of its directors
and officers, each underwriter or control Person, each other Holder and each of
their officers, directors and partners and each Person controlling such Holder
or other stockholder for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein.

            6.3 NOTICES OF CLAIMS, PROCEDURES, ETC. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6 unless such failure is prejudicial to the
ability of Indemnifying Party to defend such claim or action. Notwithstanding
the foregoing, such Indemnified Party shall have the right

                                       10
<PAGE>

to employ its own counsel in any such litigation, proceeding or other action if
(i) the employment of such counsel has been authorized by the Indemnifying
Party, in its sole and absolute discretion, or (ii) the named parties in any
such claims (including any impleaded parties) include any such Indemnified Party
and the Indemnified Party and the Indemnifying Party shall have been advised in
writing (in suitable detail) by counsel to the Indemnified Party either (A) that
there may be one or more legal defenses available to such Indemnified Party
which are different from or additional to those available to the Indemnifying
Party, or (B) that there is a conflict of interest by virtue of the Indemnified
Party and the Indemnifying Parties having common counsel, in any of which
events, the legal fees and expenses of a single counsel for all Indemnified
Parties with respect to each such claim, defense thereof, or counterclaims
thereto shall be borne by Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall cooperate
to the extent reasonably required and furnish such information regarding itself
or the claim in question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with defense of such
claim and litigation resulting therefrom.

     7. INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.

     8. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register securities granted by the Company under this Agreement may
be transferred or assigned by a Holder to a transferee or assignee of any
Registrable Securities; provided that the Company is given written notice at or
prior to the time of said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights assumes in writing the
obligations of a Holder under this Agreement to the Company and other Holders in
effect at the time of transfer under all effective agreements.

     9. EXCHANGE ACT COMPLIANCE. So long as the Company remains subject to the
reporting requirements of the Exchange Act, the Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and will take all
actions reasonably necessary to enable holders of Registrable Securities to sell
such securities without registration under the Securities Act within the
limitation of the provisions of (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, (b) Rule 144A under the Securities Act,
as such Rule may be amended from time to time, if applicable or (c) any similar
rules or regulations hereunder adopted by the Commission. Upon the request of
any Holder of Registrable Securities, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.

                                       11
<PAGE>

     10. NO CONFLICT OF RIGHTS. The Company will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the Holders in this Agreement. Without limiting the generality of the
foregoing, the Company will not hereafter enter into any agreement with respect
to its securities which grants or modifies any existing agreement with respect
to its securities to grant to the holder of its securities in connection with an
incidental registration of such securities equal or higher priority to the
rights granted to the Holders under Sections 2 and 3 of this Agreement.

     11. LOCKUP AGREEMENT. In consideration for the Company agreeing to its
obligations hereunder, the Holders of Registrable Securities agree in connection
with any registration of the Company's securities pursuant to Section 3 hereof
that, upon the request of the Company not to sell, make any short sale of, loan,
grant any option for the purchase of or otherwise dispose of any Registrable
Securities (other than those shares included in such registration) without the
prior written consent of the Company for such period of time (not to exceed 180
days) from the effective date of such registration as the Company may specify;
provided, however, that all holders of 5% or more of the Company's securities
and all directors and officers shall be subject to the restrictions set forth in
this Section 11.

     12. BENEFITS OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, legal representatives and heirs. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any other Person.

     13. COMPLETE AGREEMENT. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed, on the one hand, by the
Holders of a majority of the Registrable Securities then outstanding and, on the
other, by the Company.

     14. SECTION HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

     15. NOTICES. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
if to the Company, at 1810 Chapel Avenue West, Suite 130, Cherry Hill, New
Jersey 08002, 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 any Holder, at the address of such Holder as set
forth in the stock transfer books of the Corporation.

                                       12
<PAGE>

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any party may change the address to which each such notice or communication
shall be sent by giving written notice to the other parties of such new address
in the manner provided herein for giving notice.

     16. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada without giving
effect to the provisions, policies or principles thereof respecting conflict or
choice of laws.

     17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.

     18. SEVERABILITY. Any provision of this Agreement which is determined to be
illegal, prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, prohibition or
unenforceability without invalidating the remaining provisions hereof which
shall be severable and enforceable according to their terms and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first set forth above.

                                 FRONT PORCH DIGITAL, INC.

                                 By: /s/ TIM PETRY
                                     ------------------------------
                                      Name:  Tim Petry
                                      Title: Chief Financial Officer

                                 STORAGE TECHNOLOGY CORPORATION

                                 By: /s/ MARK D. MCGREGOR
                                     ------------------------------
                                      Name:  Mark D. McGregor
                                      Title: Vice President and
                                             Corporate Treasurer

                                       13

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