Document:

Exhibit 10.5

                  THIS  WARRANT  AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON
                  EXERCISE OF THIS  WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
                  SECURITIES  ACT OF 1933, AS AMENDED,  OR ANY STATE  SECURITIES
                  LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
                  OF THIS WARRANT MAY NOT BE SOLD,  OFFERED FOR SALE, PLEDGED OR
                  HYPOTHECATED  IN  THE  ABSENCE  OF AN  EFFECTIVE  REGISTRATION
                  STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE
                  STATE  SECURITIES  LAWS OR AN OPINION  OF  COUNSEL  REASONABLY
                  SATISFACTORY   TO  FRONT  PORCH   DIGITAL,   INC.   THAT  SUCH
                  REGISTRATION IS NOT REQUIRED.

           Right to Purchase up to 4,435,500 Shares of Common Stock of
                            FRONT PORCH DIGITAL, INC.
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                                  Issue Date:  May 13, 2004

         FRONT PORCH DIGITAL,  INC., a corporation  organized  under the laws of
the State of Nevada ("FPDI"),  hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the "Holder"), is entitled,  subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this  Warrant and at any time or from time to time before 5:00
p.m., New York time, through the close of business May 13, 2011 (the "Expiration
Date"), up to 4,435,500 fully paid and nonassessable  shares of Common Stock (as
hereinafter  defined),  at the applicable  Exercise Price (as defined below) per
share.  The  number  and  character  of such  shares  of  Common  Stock  and the
applicable  Exercise  Price per share are  subject  to  adjustment  as  provided
herein.

         As used  herein  the  following  terms,  unless the  context  otherwise
requires, have the following respective meanings:

                  (a) The term "Company"  shall include FPDI and any corporation
         which shall succeed, or assume the obligations of, FPDI hereunder.

                  (b) The term "Common Stock" includes (i) the Company's  Common
         Stock,  par value $0.001 per share;  and (ii) any other securities into
         which  or for  which  any of the  securities  described  in (a)  may be
         converted  or  exchanged  pursuant  to  a  plan  of   recapitalization,
         reorganization, merger, sale of assets or otherwise.

                  (c) The term  "Other  Securities"  refers to any stock  (other
         than  Common  Stock) and other  securities  of the Company or any other
         person (corporate or otherwise) which the Holder of this Warrant at any
         time shall be  entitled  to  receive,  or shall have  received,  on the
         exercise of the Warrant,  in lieu of or in addition to Common Stock, or
         which at any time  shall be  issuable  or shall  have  been  issued  in
         exchange  for or in  replacement  of Common  Stock or Other  Securities
         pursuant to Section 4 or otherwise.

                  (d) The "Exercise  Price"  applicable under this Warrant shall
         be $0.48.

<PAGE>

         1.       EXERCISE OF WARRANT.

                  1.1 NUMBER OF SHARES  ISSUABLE UPON  EXERCISE.  From and after
the date hereof through and including the  Expiration  Date, the Holder shall be
entitled  to receive,  upon  exercise  of this  Warrant in whole or in part,  by
delivery of an original or fax copy of an exercise  notice in the form  attached
hereto as Exhibit A (the  "Exercise  Notice") up to  4,435,500  shares of Common
Stock of the Company, subject to adjustment pursuant to Section 4.

                  1.2 FAIR MARKET VALUE. For purposes  hereof,  the "Fair Market
Value" of a share of Common  Stock as of a particular  date (the  "Determination
Date") shall mean:

                  (a) If the  Company's  Common  Stock is traded on the American
         Stock  Exchange  or  another  national  exchange  or is  quoted  on the
         National  or  SmallCap   Market  of  The  Nasdaq  Stock  Market,   Inc.
         ("Nasdaq"), then the closing or last sale price, respectively, reported
         for the last business day immediately preceding the Determination Date.

                  (b)  If the  Company's  Common  Stock  is  not  traded  on the
         American Stock Exchange or another  national  exchange or on the Nasdaq
         but is traded on the National  Association of Securities Dealers,  Inc.
         Over-the-Counter  Bulletin  Board,  then the mean of the average of the
         closing  bid and  asked  prices  reported  for the  last  business  day
         immediately preceding the Determination Date.

                  (c) Except as provided in clause (d) below,  if the  Company's
         Common Stock is not publicly traded, then as the Holder and the Company
         agree or in the absence of agreement by arbitration in accordance  with
         the  rules  then in  effect of the  American  Arbitration  Association,
         before  a  single  arbitrator  to be  chosen  from a panel  of  persons
         qualified  by  education  and  training  to  pass on the  matter  to be
         decided.

                  (d) If the  Determination  Date is the date of a  liquidation,
         dissolution  or winding  up, or any event  deemed to be a  liquidation,
         dissolution or winding up pursuant to the Company's  charter,  then all
         amounts to be payable per share to holders of the Common Stock pursuant
         to the charter in the event of such liquidation, dissolution or winding
         up,  plus all other  amounts to be payable  per share in respect of the
         Common  Stock  in  liquidation  under  the  charter,  assuming  for the
         purposes of this clause (d) that all of the shares of Common Stock then
         issuable  upon  exercise  of  the  Warrant  are   outstanding   at  the
         Determination Date.

                  1.3 COMPANY  ACKNOWLEDGMENT.  The Company will, at the time of
the exercise of this Warrant, upon the request of the Holder hereof, acknowledge
in writing  its  continuing  obligation  to afford to such  Holder any rights to
which  such  Holder  shall  continue  to be  entitled  after  such  exercise  in
accordance with the provisions of this Warrant. If the Holder shall fail to make
any such request, such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.

                  1.4 TRUSTEE FOR WARRANT  HOLDERS.  In the event that a bank or
trust  company  shall  have been  appointed  as  trustee  for the Holder of this

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Warrant  pursuant to  Subsection  3.2, such bank or trust company shall have all
the powers and duties of a warrant agent (as  hereinafter  described)  and shall
accept,  in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor,  as the case may be, on  exercise  of this  Warrant  pursuant to this
Section 1.

         2.       PROCEDURE FOR EXERCISE.

                  2.1 DELIVERY OF STOCK  CERTIFICATES,  ETC.,  ON EXERCISE.  The
Company  agrees that the shares of Common Stock  purchased upon exercise of this
Warrant  shall be deemed to be issued to the Holder as the record  owner of such
shares as of the close of business on the date on which this Warrant  shall have
been  surrendered  and payment made for such shares in accordance  herewith.  As
soon as  practicable  after the exercise of this Warrant in full or in part, and
in any event  within  three (3)  business  days  thereafter,  the Company at its
expense  (including the payment by it of any applicable  issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as such Holder (upon
payment  by  such  Holder  of any  applicable  transfer  taxes)  may  direct  in
compliance with applicable  securities  laws, a certificate or certificates  for
the number of duly and validly issued,  fully paid and  nonassessable  shares of
Common  Stock (or Other  Securities)  to which such Holder  shall be entitled on
such exercise,  plus, in lieu of any fractional share to which such Holder would
otherwise be entitled,  cash equal to such fraction  multiplied by the then Fair
Market  Value  of one  full  share,  together  with  any  other  stock  or other
securities and property  (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

                  2.2  EXERCISE.  Payment  may be made  either (i) in cash or by
certified or official  bank check  payable to the order of the Company  equal to
the applicable  aggregate  Exercise Price, (ii) by delivery of this Warrant,  or
shares of Common Stock  and/or  Common Stock  receivable  upon  exercise of this
Warrant in accordance  with Section (b) below,  or (iii) by a combination of any
of the  foregoing  methods,  for the number of Common  Shares  specified in such
Exercise  Notice (as such  exercise  number  shall be  adjusted  to reflect  any
adjustment in the total number of shares of Common Stock  issuable to the Holder
per the  terms  of this  Warrant);  provided,  however,  that if at the  time of
delivery  of an  Exercise  Notice the shares of Common  Stock to be issued  upon
payment of the Exercise Price have been  registered  under the Securities Act of
1933,  as amended  (the  "Securities  Act"),  and are  covered  by an  effective
registration  statement under the Securities Act,  payment of the Exercise Price
may only be made  pursuant  to clause (i) above and may not be made  pursuant to
clause (ii) or (iii) above.  Upon  receipt by the Company of an Exercise  Notice
and proper payment of the aggregate  Exercise Price,  the Holder shall thereupon
be entitled to receive the number of duly authorized, validly issued, fully-paid
and  non-assessable  shares of Common Stock (or Other Securities)  determined as
provided herein.  Notwithstanding any provisions herein to the contrary,  if the
Fair  Market  Value of one share of Common  Stock is greater  than the  Exercise
Price (at the date of  calculation  as set forth  below),  in lieu of exercising
this Warrant for cash, the Holder may elect to receive shares equal to the value
(as determined  below) of this Warrant (or the portion thereof being  exercised)
by  surrender of this Warrant at the  principal  office of the Company  together
with the properly  endorsed

<PAGE>

Exercise  Notice,  in which event the Company shall issue to the Holder a number
of shares of Common Stock computed using the following formula:

         X=Y            (A-B)
                       -------
                          A

         Where X =         the number of shares of  Common Stock to be issued to
                           the Holder

         Y =               the  number of  shares  of Common  Stock  purchasable
                           under  this  Warrant  or, if only a  portion  of this
                           Warrant  is  being  exercised,  the  portion  of this
                           Warrant   being   exercised  (at  the  date  of  such
                           calculation)

         A =               the Fair Market Value of one  share of  the Company's
                           Common Stock (at the date of such calculation)

         B =               the Exercise Price  (as  adjusted to the date of such
                           calculation)

         3.       EFFECT OF REORGANIZATION, ETC.; ADJUSTMENT OF EXERCISE PRICE.

                  3.1 REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any
time or from time to time,  the Company shall (a) effect a  reorganization,  (b)
consolidate  with or  merge  into  any  other  person,  or (c)  transfer  all or
substantially all of its properties or assets to any other person under any plan
or arrangement  contemplating the dissolution of the Company, then, in each such
case,  as a condition  to the  consummation  of such a  transaction,  proper and
adequate  provision  shall be made by the  Company  whereby  the  Holder of this
Warrant,  on the exercise  hereof as provided in Section 1 at any time after the
consummation of such  reorganization,  consolidation  or merger or the effective
date of such  dissolution,  as the case may be,  shall  receive,  in lieu of the
Common  Stock (or Other  Securities)  issuable  on such  exercise  prior to such
consummation or such effective date, the stock and other securities and property
(including  cash) to which  such  Holder  would  have  been  entitled  upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant,  immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

                  3.2  DISSOLUTION.  In  the  event  of any  dissolution  of the
Company  following the transfer of all or substantially all of its properties or
assets, the Company,  concurrently with any distributions made to holders of its
Common  Stock,  shall at its  expense  deliver or cause to be  delivered  to the
Holder  the stock and other  securities  and  property  (including  cash,  where
applicable)  receivable  by the Holder of this Warrant  pursuant to Section 3.1,
or, if the Holder  shall so instruct  the  Company,  to a bank or trust  company
specified  by the  Holder and having  its  principal  office in New York,  NY as
trustee for the Holder of this Warrant (the "Trustee").

                  3.3   CONTINUATION   OF   TERMS.   Upon  any   reorganization,
consolidation,  merger or transfer (and any dissolution  following any transfer)
referred to in this  Section 3, this  Warrant  shall  continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities  and property  receivable  on the exercise of this

<PAGE>

Warrant after the consummation of such  reorganization,  consolidation or merger
or the effective  date of dissolution  following any such transfer,  as the case
may be,  and  shall be  binding  upon  the  issuer  of any  such  stock or other
securities,  including,  in the case of any such transfer,  the person acquiring
all or substantially all of the properties or assets of the Company,  whether or
not such  person  shall  have  expressly  assumed  the terms of this  Warrant as
provided in Section 4. In the event this Warrant does not continue in full force
and effect after the consummation of the transactions  described in this Section
3, then the Company's securities and property (including cash, where applicable)
receivable  by the Holders of the  Warrant  will be  delivered  to Holder or the
Trustee as contemplated by Section 3.2.

         4        EXTRAORDINARY EVENTS REGARDING COMMON STOCK. In the event that
the Company shall (a) issue additional  shares of the Common Stock as a dividend
or other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common  Stock,  or (c)  combine its  outstanding  shares of the Common
Stock into a smaller  number of shares of the Common  Stock,  then, in each such
event,  the Exercise  Price  shall,  simultaneously  with the  happening of such
event,  be adjusted by multiplying  the then Exercise  Price by a fraction,  the
numerator  of which  shall be the number of shares of Common  Stock  outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common  Stock  outstanding  immediately  after such event,  and the
product so obtained shall  thereafter be the Exercise Price then in effect.  The
Exercise Price, as so adjusted,  shall be readjusted in the same manner upon the
happening of any successive  event or events described herein in this Section 4.
The  number of shares of Common  Stock  that the  Holder of this  Warrant  shall
thereafter,  on the  exercise  hereof as  provided  in Section 1, be entitled to
receive shall be increased to a number  determined by multiplying  the number of
shares of Common  Stock that would  otherwise  (but for the  provisions  of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the  Exercise  Price that would  otherwise  (but for the  provisions  of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.

         5        CERTIFICATE AS TO ADJUSTMENTS.  In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities)  issuable on
the exercise of this Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of this  Warrant  and prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each  such  certificate  to the  Holder of this  Warrant  and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

         6        RESERVATION OF STOCK,  ETC.,  ISSUABLE ON EXERCISE OF WARRANT.
The Company will at all times  reserve and keep  available,  solely for issuance
and

<PAGE>

delivery  on the  exercise  of this  Warrant,  shares of Common  Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

         7.       ASSIGNMENT;  EXCHANGE OF WARRANT.  Subject to compliance  with
applicable  securities laws, this Warrant,  and the rights evidenced hereby, may
be transferred by any registered  holder hereof (a  "Transferor") in whole or in
part.  On the  surrender  for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without  limitation,  the  provision  of  a  legal  opinion  from  the
Transferor's  counsel  that  such  transfer  is  exempt  from  the  registration
requirements of applicable  securities  laws, and with payment by the Transferor
of any applicable  transfer  taxes) will issue and deliver to or on the order of
the  Transferor  thereof  a new  Warrant  of  like  tenor,  in the  name  of the
Transferor  and/or the  transferee(s)  specified in such Transferor  Endorsement
Form  (each a  "Transferee"),  calling  in the  aggregate  on the  face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.

         8.       REPLACEMENT  OF  WARRANT.  On receipt of  evidence  reasonably
satisfactory  to the Company of the loss,  theft,  destruction  or mutilation of
this Warrant  and, in the case of any such loss,  theft or  destruction  of this
Warrant,   on  delivery  of  an  indemnity   agreement  or  security  reasonably
satisfactory  in form and  amount  to the  Company  or,  in the case of any such
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9.       REGISTRATION  RIGHTS.  The  Holder  of this  Warrant  has been
granted certain  registration  rights by the Company.  These registration rights
are set forth in a Registration  Rights  Agreement dated as of even date of this
Warrant entered into by the Company and the initial Holder of this Warrant.

         10.      MAXIMUM EXERCISE. The Holder shall not be entitled to exercise
this Warrant on an exercise  date, in  connection  with that number of shares of
Common  Stock which would be in excess of the sum of (i) the number of shares of
Common  Stock  beneficially  owned  by the  Holder  and its  affiliates  on such
exercise  date,  and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this proviso
is being made on such exercise date, which would result in beneficial  ownership
by the Holder and its affiliates of more than 4.99% of the outstanding shares of
Common Stock of the Company on such date. For the purposes of the proviso to the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended,  and Regulation 13d-3 thereunder.  Notwithstanding  the foregoing,  the
restriction described in this paragraph may be revoked upon 75 days prior notice
from the Holder to the Company and is automatically  null and void upon an Event
of Default under the Note.

         11.      WARRANT  AGENT.  The  Company  may,  by written  notice to the
Holder of this Warrant, appoint an agent for the purpose of issuing Common Stock
(or Other  Securities)  on the exercise of this  Warrant  pursuant to Section 1,
exchanging  this  Warrant  pursuant  to Section 7, and  replacing  this  Warrant
pursuant  to  Section  8,  or any of the  foregoing,  and  thereafter  any  such

<PAGE>

issuance,  exchange or  replacement,  as the case may be,  shall be made at such
office by such agent.

         12.      TRANSFER  ON  THE  COMPANY'S  BOOKS.  Until  this  Warrant  is
transferred  on the books of the Company,  the Company may treat the  registered
Holder hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.

         13.      NOTICES,  ETC. All notices and other  communications  from the
Company to the Holder of this Warrant shall be mailed by first class  registered
or certified mail,  postage prepaid,  at such address as may have been furnished
to the Company in writing by such Holder or, until any such Holder  furnishes to
the Company an address,  then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

         14.      MISCELLANEOUS.  This  Warrant  and  any  term  hereof  may  be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of such change, waiver,  discharge
or  termination  is sought.  This Warrant  shall be governed by and construed in
accordance  with the laws of State of New York without  regard to  principles of
conflicts of laws. Any action brought  concerning the transactions  contemplated
by this Warrant  shall be brought only in the state courts of New York or in the
federal courts  located in the state of New York;  provided,  however,  that the
Holder may choose to waive this  provision and bring an action outside the State
of New York.  The  individuals  executing  this Warrant on behalf of the Company
agree to submit to the  jurisdiction  of such courts and waive trial by jury. In
the event that any provision of this Warrant is invalid or  unenforceable  under
any  applicable  statute  or rule of law,  then such  provision  shall be deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any such  provision  which
may prove invalid or  unenforceable  under any law shall not affect the validity
or enforceability  of any other provision of this Warrant.  The headings in this
Warrant are for  purposes of  reference  only,  and shall not limit or otherwise
affect  any of the terms  hereof.  The  invalidity  or  unenforceability  of any
provision  hereof shall in no way affect the validity or  enforceability  of any
other provision hereof. The Company acknowledges that legal counsel participated
in the preparation of this Warrant and,  therefore,  stipulates that the rule of
construction  that  ambiguities  are to be resolved  against the drafting  party
shall not be applied in the  interpretation  of this  Warrant to favor any party
against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

<PAGE>

         IN WITNESS  WHEREOF,  the Company has  executed  this Warrant as of the
date first written above.

                                          FRONT PORCH DIGITAL, INC.

WITNESS:
                                          By:     /s/ Thomas P. Sweeney III
                                                  ------------------------------
                                          Name:   Thomas P. Sweeney III
/s/ Robin Densler                         Title:  Chairman
--------------------------------

<PAGE>

                                                                       EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:      Front Porch Digital, Inc.
         1140 Pearl Street
         Boulder, CO 80302
         Attention:        Chief Financial Officer

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

------------      _______ shares of the Common Stock covered by such Warrant; or

                  the maximum  number of shares of Common Stock  covered by such
------------      Warrant pursuant to the cashless exercise  procedure set forth
                  in Section 2.

         The  undersigned  herewith makes payment of the full Exercise Price for
such  shares  at the  price per share  provided  for in such  Warrant,  which is
$___________. Such payment takes the form of (check applicable box or boxes):

------------      $__________ in lawful money of the United States; and/or

                  the cancellation of such portion of the attached Warrant as is
------------      exercisable  for a total of  _______  shares of  Common  Stock
                  (using a Fair Market  Value of $_______ per share for purposes
                  of this calculation); and/or

                  the  cancellation  of such number of shares of Common Stock as
------------      is  necessary,  in  accordance  with the  formula set forth in
                  Section  2.2, to exercise  this  Warrant  with  respect to the
                  maximum number of shares of Common Stock purchasable  pursuant
                  to the cashless exercise procedure set forth in Section 2.

         The  undersigned  requests  that the  certificates  for such  shares be
issued in the name of, and delivered to _________________________________  whose
address is __________________________________________________________________.

         The  undersigned  represents  and warrants that all offers and sales by
the  undersigned of the securities  issuable upon exercise of the within Warrant
shall be made pursuant to  registration of the Common Stock under the Securities
Act of 1933, as amended (the "Securities  Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:
        -------------------        ---------------------------------------------
                                   (Signature must conform to name of holder
                                    as specified on the face of the Warrant)

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

<PAGE>

                                                                       EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

         For  value  received,   the  undersigned  hereby  sells,  assigns,  and
transfers  unto the person(s)  named below under the heading  "Transferees"  the
right represented by the within Warrant to purchase the percentage and number of
shares of Common  Stock of Front  Porch  Digital,  Inc.  into  which the  within
Warrant  relates  specified  under the  headings  "Percentage  Transferred"  and
"Number Transferred,"  respectively,  opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of Front Porch Digital, Inc. with full power of substitution in the premises.

                                                 Percentage         Number
Transferees              Address                 Transferred     Transferred
-----------              -------                 -----------     ------------

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

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

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

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

Dated:
       --------------------       ----------------------------------------------
                                  (Signature must conform to name of holder
                                   as specified on  the face of the Warrant)

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

                           SIGNED IN THE PRESENCE OF:

                           -----------------------------------------------------
                                                  (Name)
ACCEPTED AND AGREED:
[TRANSFEREE]

-------------------------------------------------------
                        (Name)Exhibit 10.6

                          RESTRICTED ACCOUNT AGREEMENT

         This Restricted  Account  Agreement (this  "Agreement") is entered into
this 13th day of May 2004,  by and among  NORTH  FORK BANK,  a New York  banking
corporation  with  offices at 275  Broadhollow  Road,  Melville,  New York 11747
(together  with its successors  and assigns,  the "Bank"),  Front Porch Digital,
Inc., a Nevada corporation with offices at 1140 Pearl Street, Boulder,  Colorado
80302  (together  with its successors and assigns,  the  "Company"),  and LAURUS
MASTER  FUND,  LTD.,  a Cayman  Islands  corporation  with  offices at 825 Third
Avenue,  14th Floor,  New York, New York 10022 (together with its successors and
assigns,  "Laurus").  Unless otherwise  defined herein,  capitalized  terms used
herein  shall have the meaning  provided  such terms in the  Purchase  Agreement
referred to below.

         WHEREAS,  Laurus has provided financing to the Company, which financing
is  evidenced  by a  Securities  Purchase  Agreement  (as  amended,  modified or
supplemented  from  time to time,  the  "Purchase  Agreement")  and the  Related
Agreements referred to therein;

         WHEREAS,  the  Company  and Laurus  have  retained  the Bank to provide
certain services with respect to the Restricted Account (as defined below); and

         WHERERAS,  the  Company  and Laurus  have agreed that an amount of cash
equal to  $3,500,000  shall be  deposited  by Laurus on behalf of the Company by
wire transfer of immediately available funds into the Restricted Account,  which
cash shall be held by the Bank for the benefit of Laurus,  as  security  for the
Company's and its Subsidiaries' obligations under the Purchase Agreement and the
Related Agreements. For the purposes of this Agreement, the "Restricted Account"
shall mean that  certain  deposit  account (as  defined in Section  9-102 of the
Uniform  Commercial  Code as in  effect  in the  State  of New  York on the date
hereof)  described  on  Exhibit  B hereto,  which  Restricted  Account  shall be
maintained at the Bank and shall be in the sole dominion and control of Laurus;

         NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1. The  Bank is  hereby  authorized  to  accept  for  deposit  into the
Restricted Account the sum of $3,500,000. The Bank hereby agrees to hold any and
all monies,  and other  amounts from time to time on deposit  and/or held in the
Restricted  Account  for the  benefit of the Laurus  and shall not  release  any
monies  held in the  Restricted  Account  until such time as the Bank shall have
received a notice  from  Laurus  substantially  in the form  attached  hereto as
Exhibit A (a "Release  Notice").  Following the receipt of a Release Notice from
Laurus,  the Bank agrees to promptly  disburse the amount of cash referred to in
such  Release  Notice to such  account  as Laurus  shall  determine  in its sole
discretion.  The Bank  hereby  agrees  that it will  only  comply  with  written
instructions  originated  by  Laurus  directing  disposition  of  funds  in  the
Restricted Account. The Company hereby irrevocably authorizes the Bank to comply
with any and all  instructions  given to the Bank by Laurus with

<PAGE>

respect to the Restricted  Account without  further consent by the Company.  The
Bank,  the Company and Laurus  agree that the  Restricted  Account is in Laurus'
sole dominion and control.

         2. Each of the  Company,  Laurus and the Bank  hereby  agrees  that the
Restricted  Account shall not be closed, and the account name and account number
in respect thereof shall not be changed, in any case, without the consent of the
Laurus, except as specifically provided for in Section 9 below.

         3. The Bank hereby  subordinates  any claims and security  interests it
may have against,  or with respect to, the  Restricted  Account  (including  any
amounts,  from time to time on deposit  therein) to the  security  interests  of
Laurus  therein,  and  agrees  that no  amounts  shall be  charged  by it to, or
withheld or set-off or otherwise  recouped by it from, the Restricted Account or
any amounts from time to time on deposit  therein;  provided that, in connection
with all  service  charges and any other  charges  which the Bank is entitled to
receive in  connection  with the  servicing and  maintaining  of the  Restricted
Account (such charges, collectively, the "Charges"), each of the Company, Laurus
and the Bank  hereby  agrees  that the Bank will  collect  such  Charges  in the
following  manner:  (i)  first,  the Bank will  charge  other  deposit  accounts
maintained  by the Company with the Bank,  (ii) second,  in the event that there
are  insufficient  collected  funds in such other  deposit  accounts to pay such
Charges,  the Bank will  promptly  notify the Company and Laurus with respect to
same and,  within  seven (7)  business  days of the  Company's  receipt  of such
notice,  the Company  shall pay to the Bank the full amount of such Charges then
due, and (iii) third,  if the Company fails to pay to the Bank such Charges then
due within the time period set forth in the preceding clause (ii), the Bank will
promptly  provide a written  notice to Laurus of such  occurrence  and,  in such
case,  the Bank is hereby  authorized,  following a period of five (5)  business
days after the receipt of such written notice by Laurus,  to deduct such Charges
then due from the Restricted Account,  unless, during such five (5) business day
period, Laurus agrees to promptly pay the amount of any such Charges then due to
the Bank from its own  account.  Except for the  payment  of the  Charges as set
forth in the immediately  preceding  proviso,  the Bank agrees that it shall not
offset,  deduct or claim against the Restricted  Account unless and until Laurus
has notified the Bank in writing that all of the Company's obligations under the
Purchase Agreement and the Related Agreements have been performed.

         4. The Company and the Bank agree that the  maintenance  by the Bank of
the  Restricted  Account  shall  be as  agent  for  Laurus.  The  Bank  shall be
responsible for the performance of only such duties as are set forth herein. The
Bank's duties hereunder,  however,  are merely  ministerial,  and the Bank shall
have no liability or  obligation to the Company or Laurus or to any other person
for any act or omission of the Bank in connection  with the  performance  of the
Bank's duties in servicing and/or maintaining the Restricted Account, except for
acts of gross  negligence or willful  misconduct by Bank. IN NO EVENT,  HOWEVER,
SHALL THE BANK HAVE ANY RESPONSIBILITY FOR CONSEQUENTIAL,  INDIRECT,  SPECIAL OR
EXEMPLARY  DAMAGES OR LOST PROFITS,  WHETHER OR NOT IT HAS NOTICE  THEREOF,  AND
REGARDLESS OF THE BASIS,  THEORY OR NATURE OF THE ACTION UPON WHICH THE CLAIM IS
ASSERTED,  NOR SHALL IT HAVE ANY RESPONSIBILITY OR LIABILITY FOR THE VALIDITY OR
ENFORCEABILITY  OF ANY

<PAGE>

SECURITY  INTEREST OR OTHER  INTEREST OF LAURUS OR THE COMPANY IN THE RESTRICTED
ACCOUNT.  In furtherance of and without limiting the foregoing,  the Company and
Laurus  agree  that the Bank  shall not be liable for any damage or loss to them
for any delay or failure of performance  arising out of the acts or omissions of
any  third  parties,  including,  but  not  limited  to,  various  communication
services,  courier services,  the Federal Reserve system,  any other bank or any
third  party  who may be  affected  by  funds  transactions,  fire,  mechanical,
computer or electrical  failures or other unforeseen  contingencies,  strikes or
any similar or dissimilar cause beyond the reasonable  control of the Bank. This
paragraph shall survive the termination of this Agreement.

         5. Except where the Bank has been grossly negligent or has acted in bad
faith,  each of Laurus  and the  Company  and their  respective  successors  and
assigns  will  release  the Bank  from  and  shall  indemnify  and hold the Bank
harmless  from and  against any and all losses,  claims,  damages,  liabilities,
costs and expenses  (including,  without  limitation,  reasonable  counsel fees,
whether  arising  in an  action  or  proceeding  among  the  parties  hereto  or
otherwise,  without  regard to the merit or lack of merit  thereof) to which the
Bank may  become  subject,  or which it may suffer or incur,  arising  out of or
based upon this  Agreement or the actions  contemplated  hereby.  This paragraph
shall survive termination of this Agreement.

         6.  The Bank  shall  be  fully  protected  in  acting  on any  order or
direction by Laurus  respecting  the items received by the Bank or the monies or
other items in the Restricted  Account  without making any  independent  inquiry
whatsoever as to Laurus'  rights or authority to give such order or direction or
as to the application of any payments made pursuant thereto.

         7. Nothing in this Agreement  shall be deemed to prohibit the Bank from
complying with its customary  procedures in the event that it is served with any
legal process with respect to the Restricted Account.

         8. The rights and powers  granted in this Agreement to Laurus have been
granted in order to protect and further  perfect its  security  interests in the
Restricted  Account (including any amounts from time to time on deposit therein)
and are powers  coupled  with an interest  and will be  affected  neither by any
purported  revocation by the Company of this  Agreement or the rights granted to
Laurus  hereunder  or  by  the  bankruptcy,   insolvency,   conservatorship   or
receivership of the Company or the Bank or by the lapse of time.

         9. This  Agreement may not be amended or waived except by an instrument
in  writing  signed  by  each  of the  parties  hereto.  This  Agreement  may be
terminated by the Bank upon giving the Company and Laurus thirty (30) days prior
written  notice.  Laurus  shall  designate a  successor  bank on or prior to the
effective date of such termination and the Bank shall deliver the balance in the
Restricted  Account to such  successor  bank.  Any notice  required  to be given
hereunder may be given,  and shall be deemed given when delivered,  via telefax,
U.S. mail return receipt requested or nationally recognized overnight courier to
each of the  parties at the  address  set forth  above.  This  Agreement  may be
executed in any number of  counterparts,  each of which shall be an original and
all of which, when taken together,  shall constitute one agreement.  Delivery of
an executed signature page of this Agreement by facsimile  transmission shall be
effective as delivery of a manually executed  counterpart hereof or thereof,  as
the case  may be.  This  Agreement  shall  be  governed  by,  and  construed  in
accordance  with,  the laws of

<PAGE>

the State of New York,  without regard to its conflict of laws principles.  This
Agreement sets forth the entire  agreement  between the parties hereto as to the
matters set forth  herein and  supersede  all prior  communications,  written or
oral,  with respect to the matters  herein.  EACH OF THE PARTIES  HERETO  HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY WITH  RESPECT TO ANY  CLAIM,  ACTION,  SUIT OR
PROCEEDING  ARISING OUT OF OR  CONTEMPLATED  BY THIS  AGREEMENT.  THE BANK,  THE
COMPANY AND LAURUS  EACH  HEREBY  SUBMIT TO THE  EXCLUSIVE  JURISDICTION  OF THE
FEDERAL  AND  NEW  YORK  STATE  COURTS  LOCATED  IN THE  COUNTY  OF NEW  YORK IN
CONNECTION   WITH  ANY  DISPUTE   RELATED  TO  THIS  AGREEMENT  OR  ANY  MATTERS
CONTEMPLATED HEREBY OR THEREBY.

                                *    *    *    *

<PAGE>

         Agreed and accepted this 13th day of May, 2004.

                             NORTH FORK BANK

                             By:/s/ Sheldon Selman
                                ------------------------
                             Name: Sheldon Selman
                             Title:

                             LAURUS MASTER FUND, LTD.

                             By:/s/ David Grin
                                ------------------------
                                  Name: David Grin
                                  Title: Director

                             FRONT PORCH DIGITAL, INC.

                             By:/s/ Thomas P. Sweeney III
                                --------------------------------
                                  Name: Thomas P. Sweeney III
                                  Title: Chairman

<PAGE>

                                    EXHIBIT A

                 (i) RELEASE NOTICE

TO:      NORTH FORK BANK
         404 FIFTH AVE.,  SUITE 1
              NEW YORK, NY  10018

RE:      ACCOUNT NAME: FRONT PORCH DIGITAL, INC.
         ACCOUNT NUMBER: 2704051610

         Reference is made to that certain Restricted  Account Agreement,  dated
as of May 13, 2004 (the "Restricted Account  Agreement"),  among North Fork Bank
(the "Bank"), Front Porch Digital, Inc. (the "Company"), and Laurus Master Fund,
Ltd. ("Laurus").

         This  is  to  notify  you  that  Laurus   authorizes   the  release  of
$_____________  (the  "Release  Amount")  from the account  referenced  above in
accordance  with the  terms of the  Restricted  Account  Agreement.  Within  one
business  day  following  the receipt of this  Release  Notice,  the Bank hereby
agrees to wire the  Release  Amount  (or,  in the event  that the  amount in the
Restricted  Account is less than the Release Amount,  such lesser amount) to the
following account in accordance with the wire instructions set forth below:

                                    [INSERT WIRE INSTRUCTIONS]

                                    LAURUS MASTER FUND, LTD.

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

         Agreed and accepted this __ day of ___________ 200__.

         NORTH FORK BANK

         By: ______________________________
         Name:
         Title:

<PAGE>

                                    EXHIBIT B

                               RESTRICTED ACCOUNT

o        Bank:                 North Fork Bank

o        Bank Routing Number:  021407912
         Attn:                 [Sheldon Selman]
         Phone:                212-967-9400

         Account Name:         Front Porch Digital

         Account #:            2704051610

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