EXHIBIT 10.12

                            DEFERRED SALARY AGREEMENT
                            -------------------------

     THIS DEFERRED SALARY AGREEMENT is made as of the 31st day of March, 2004 by
and between ANTs software inc., a Delaware corporation (the "Company"),  and the
undersigned employee ("Employee").

THE PARTIES HERETO AGREE AS FOLLOWS:

     1.  Deferred Salary. In  consideration  of (i) the continued  employment of
Employee  with the  Company,  (ii)  certain  stock  option  grants and (iii) the
Company's  other  promises and  undertakings  contained in this  Agreement,  the
receipt and sufficiency of which are hereby  acknowledged by Employee,  Employee
acknowledges and agrees as follows:

         1.1. It is agreed by the parties  that, as of March 1, 2004 all accrued
and unpaid deferred salary of Employee totaled One Hundred Thirty Three Thousand
Seven  Hundred  Forty Nine  dollars and Ninety  Three cents  ($133,749.93)  (the
"Deferred  Salary").


         1.2  The  Company  shall  pay Employee the Deferred Salary by April 15,
2004.

         1.3. Employee  acknowledges  and  agrees  that  as  of  March  1,  2004
Employee's salary was set at Two Hundred Thousand dollars  ($200,000) per annum,
subject  to the  Company's  state  federal  and other  withholding  obligations,
payable  semi-monthly,  and that  Employee's  salary  shall remain at this level
until mutual agreement by and between the Employee and the Company.

     2.  Stock Options.  In partial  consideration  for the agreements set forth
herein, the Company granted the Employee certain stock options including a stock
option to purchase up to 20,000  shares of Common Stock of the Company under the
Company's 2000 Stock Option Plan,  subject to following vesting schedule:  Fifty
percent  (50%) of the shares shall vest on February  28, 2004 and Fifty  percent
(50%) of the shares shall vest on March 31, 2004,  such that One Hundred Percent
(100%) of shares are vested on March 31, 2004.

     3.  General  Release.  In exchange for the  consideration  provided in this
Agreement,  and except for the obligation  acknowledged  herein, the adequacy of
which is hereby acknowledged,  Employee, on behalf of himself or herself and his
or her  heirs,  successors  and  assigns,  hereby  fully  releases  and  forever
discharges  the Company,  including  each of its  officers,  directors,  agents,
employees,  attorneys, parents, affiliates and/or subsidiaries, from any and all
claims, actions and liabilities of any kind or character whatsoever,  arising in
law or in equity, known or unknown, suspected or unsuspected,  that the Employee
has ever had, now has or may now have against the  Company,  including,  without
limitation,  all claims  directly  or  indirectly  related to or arising  out of
Employee's  employment by the Company,  the  performance  of  Employee's  duties
during that employment,  and/or the other matters discussed herein.  This waiver
and release  specifically  includes,  but is not limited to, all claims, if any,
whether  arising  in tort or in  contract,  related  to  Employee's  employment,
including any and all claims for alleged violation of public policy or breach of
the  implied  covenant  of good  faith and fair  dealing;  claims  for breach of
fiduciary  duty;  claims for  negligent or  intentional  infliction of emotional
distress;  claims arising in connection with Employee's  compensation other than
compensation acknowledged and agreed herein as due and owing, in accordance with
the terms and subject to the conditions  hereof,  as set forth herein,  benefits
and/or stock  options;  claims for breach of express or implied  contract or for
further  monetary  compensation  by  reason  of his or her  employment  with the
Company;  and all other claims, based on common law or federal or state statute,
including claims for discrimination  based on age arising under state statute or
the federal Age  Discrimination  in Employment Act, the Older Workers'  Benefits
Protection   Act,  or  any  similar   federal  or  state  law   prohibiting  age
discrimination.


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     Employee  further  understands  and expressly  agrees that this release and
Agreement specifically extends to all claims, whether those claims are presently
known to the  Employee or not, or  suspected  by the Employee or not. By signing
below,  Employee expressly waives the benefits of 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."

     4.  Waiting Period. Employee acknowledges that the Company has specifically
advised him or her to consult  with an  attorney  of his or her own  choosing in
order to  review  this  Agreement  and  advise  him or her of his or her  rights
concerning it, and he or she has done so. Employee further acknowledges that the
Company has further  advised him or her that he or she has twenty-one  (21) days
from the date this Agreement was originally  presented to him or her in which to
consider  whether to sign it, and that if he or she  chooses to do so, he or she
will be given an  additional  seven (7) days from the date he or she signs it in
which to revoke it. Unless revoked by the Employee,  this Agreement shall become
effective the day  immediately  after the expiration of the seven (7) day period
set forth above.

     5.  Miscellaneous.

         5.1  Binding  Effect. This Agreement shall be binding upon and inure to
the benefit of the respective heirs, executors, representatives,  successors and
assigns of the parties hereto.

         5.2  Further  Assurances. The  parties shall execute and  deliver, such
instruments  and take such other  actions as may be  reasonably  be necessary in
order to carry out the intent of this Agreement.

         5.3  Counterparts.  This  Agreement  may  be  executed in any number of
separate  counterparts,  each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.

         5.4  Headings.  The subject headings of the sections and subsections of
this  Agreement  are  included for  purposes of  convenience  only and shall not
affect the construction or interpretation of any of its provisions.

         5.5  Waivers.  Any party to this  Agreement  may waive any right it may
have  hereunder or any breach or default  hereunder  by any other party  hereto;
provided that no such waiver will be effective  against the waiving party unless
it is in writing and  specifically  refers to this Agreement.  No waiver will be
deemed to be a waiver of any subsequent or other right, breach or default of the
same or similar nature.

         5.6  Entire  Agreement.  This  Agreement  embodies the entire agreement
and  understanding  of the  parties  hereto with  respect to the subject  matter
hereof, and supersedes all prior or contemporaneous agreements or understandings
(whether  written or oral) among the parties,  in respect to the subject  matter
contained  herein.  This  Agreement  may not be modified,  amended or terminated
except by written  agreement  signed by both parties  specifically  referring to
this Agreement.

         5.7  Governing  Law.  This Agreement is deemed to have been made in the
State of California and shall be governed by, and construed in accordance  with,
the laws of the  State of  California  for  contracts  made and to be  performed
within California.

         5.8  Assignment.  Employee  may not assign  this  Agreement,  or assign
Employee's rights or delegate  Employee's  duties  hereunder,  without the prior
written consent of the Company.


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         5.9  Severability.  Any  provision  of this Agreement which is illegal,
invalid or unenforceable  shall be ineffective to the extent of such illegality,
invalidity  or  unenforceability,  without  affecting  in any way the  remaining
provisions hereof.

        5.10  No Rules of Construction. No rules of construction are intended by
the parties hereto or shall be invoked in the interpretation hereof and, for all
purposes, the parties hereto shall all be deemed to be joint authors hereof.

        5.11  Notices. All notices,  demands and other  communications  provided
for hereunder shall,  unless otherwise stated herein, be in writing and shall be
personally delivered.

     IN WITNESS WHEREOF, the parties have executed this Agreement by their agent
duly authorized as of the date first above written.


                                               ANTs software inc.
                                               a Delaware corporation


                                          By:  /s/ Kenneth L. Ruotolo
                                               ----------------------
                                               Kenneth L. Ruotolo
                                               CFO, EVP-Finance & Administration

                                     Address:  801 Mahler Road, Suite G
                                               Burlingame, CA 94010

                                               EMPLOYEE


                                          By:  /s/ Francis K. Ruotolo
                                               ---------------------------------

                                        Name:  Francis K. Ruotolo

                                     Address:  533 Allegheny Drive
                                               Walnut Creek, CA  94598




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