December 3, 1999

Mr. Donald Hutton
Ants Software.com
37 Santa Teresita Way
Santa Barbara, CA  93105

         Re:      Ants Software.com ("Ants")

Dear Don:

         This letter  agreement (the  "Agreement"),  when signed by the parties,
will  reflect our mutual  resolution  of the  outstanding  matters  regarding my
employment with Ants.

     1. I will be paid the sum of Twenty Five  Thousand  Dollars  ($25,000)  due
upon the execution of this Agreement.

     2.  Effective  as of April 30, 1999, I will receive a fully vested five (5)
year stock  option for Eighty  Thousand  (80,000)  shares of the common stock of
Ants, at a strike price of Fifty Cents ($0.50) per share (the "Option"). I agree
to pay  reasonable  counsel  fees and costs of counsel of my choosing to prepare
and file an S-8 Registration Statement on behalf of Ants to register the Option.

     3. In  consideration  of the  execution  of this  Agreement by Ants and the
obligations  of Paragraphs 1 and 2 hereof,  I hereby release Ants, its Officers,
Directors, employees and agents or insurers, from and against any and all claims
of any nature,  whether known or unknown,  directly or indirectly  related to my
employment and resignation of my employment,  or claims for further compensation
or damages.  I hereby agree that the release  shall also apply to those types of
claims set forth in Section 1542 of the California Civil Code, which provides:

               "A general  release  does not extend to claims which the creditor
               does not  know or  suspect  to exist in his  favor at the time of
               executing  the  release,   which  if  known  by  him,  must  have
               materially affected his settlement with the debtor."

The claims  released under this Agreement  include,  but are not limited to, any
rights  arising out of any alleged  violations of any contract or covenant,  any
tort, any legal restriction on the right of Ants' releasees,  or any of them, to
terminate  employees,  any  federal,  state  or  other  governmental  statue  or
regulation, including, without limitation: (1) Title VII of the Civil Rights Act
of 1964 (race, color, religion, sex and national origin discrimination); (2) the
American  with  Disabilities  Act   (discrimination   against  individuals  with
disabilities);  (3) the Age Discrimination in Employment Act (age discrimination
in employment including discrimination against individuals forty years of age or
over; and (4) the California  Fair  Employment and Housing Act  (discrimination,
including race,  religious creed,  color,  national origin,  ancestry,  physical
disability, mental disability, medical condition, marital status, sex or age).

     I further  agree that this  release  shall also  specifically  apply to any
claims  with  respect to my  employment,  termination  of my  employment,  or of
unlawful termination or breach of my employment contract and loss of any and all
salary, benefits or other damages tangible or intangible relating thereto.

     5. In  consideration  of the execution of this Agreement by me, Ants hereby
releases me from and against any and all claims of any nature,  whether known or
unknown,  directly or indirectly  related to my employment and resignation of my
employment,  or claims for further compensation or damages. Ants agrees that the
release  shall also apply to those types of claims set forth in Section  1542 of
the California Civil Code, which provides:

                  "A  general  release  does not  extend  to  claims  which  the
                  creditor does not know or suspect to exist in his favor at the
                  time of  executing  the release,  which if known by him,  must
                  have materially affected his settlement with the debtor."

     6. The parties  hereto  warrant and represent  that they are  authorized to
enter into this  Agreement  and that no third  parties,  other than the  parties
hereto, have any interest in any of the claims released hereby.

     7. This  Agreement  contains  the entire  settlement  understanding  of the
parties,  supersedes  any prior  agreements  between  the  parties and cannot be
altered or amended except by a writing duly executed by all parties hereto. This
Agreement  shall be binding  upon and inure to the  benefit  of the  successors,
assigns, and personal representatives of the parties.

     8. Each party  hereto  acknowledges  that they have signed  this  Agreement
without  having  relied  upon or being  induced by any  agreement,  warranty  or
representation  of fact or opinion of any person not expressly set forth herein.
All  representations  and  warranties  of either  party  contained  herein shall
survive its signing and delivery.

     9. This Agreement shall be governed by and construed in accordance with the
laws of the State of California with the venue in Santa Barbara, California.

     10. In the event of any  controversy,  claim or dispute between the parties
hereto, arising out of or in any manner relating to this Agreement, including an
attempt to rescind or set aside,  the prevailing  party in any action brought to
settle  such  controversy,  claim or  dispute,  shall  be  entitled  to  recover
reasonable attorney's fees and costs of suit.

     11.  Neither party (and,  in the case of Ants,  its Directors and Executive
Officers) hereto will make disparaging comments regarding the other party.

     12. Except as to Ants'  responsibilities  to report to its stockholders and
the Securities and Exchange Commission, and to the Internal Revenue Service, the
California State Franchise Tax Board and other taxing authorities,  the terms of
this  Agreement  shall  be  kept  confidential,  and no  party,  representative,
attorney  or family  member  shall  reveal its  contents,  or  characterize  its
contents, to any third party except as required by law or except as necessary to
comply with law.

     13. Any  controversy  between the parties  regarding  the  construction  or
application  of this  Agreement,  and any claim arising out of this Agreement or
its breach,  shall be submitted to  arbitration  in Santa  Barbara,  California,
before one (1)  arbitrator,  upon the written request of one party after service
of that request on the other party.

     14. I will continue to be covered under Ants' Directors and Officers
insurance,  if any.  Ants shall  continue to indemnify me to the fullest  extent
permitted by law for the period I was an employee, officer or director of Ants.

     15. This Agreement will be effective as of May 1, 1999, and I hereby resign
in all capacities as of that date.

                                   /s/ John C. Wilczak
                                   -----------------------
                                   JOHN C. WILCZAK

We agree to the foregoing.

Date:  Dec. 8th, 1999              ANTS SOFTWARE.COM


                                   By:  /s/ Donald Hutton
                                       ------------------------
                                       Name:    Donald Hutton
                                       Title:   Chairman of the Board