**Exhibit
        10.3**
  **EMPLOYMENT
        AGREEMENT**
  **THIS
        EMPLOYMENT AGREEMENT** (the
“Agreement”) is made and entered into to be effective as of March 23, 2007 by
        and between **ANTs
        software inc.** ,
        a
        Delaware corporation (the “Company”), and the Executive set forth on the
        signature page hereof (the “Executive”).
  **NOW,
        THEREFORE** ,
        in
        consideration of the agreements of the parties contained herein, and for
        other
        good and valuable consideration, the receipt and sufficiency of which are
        hereby
        acknowledged, the parties agree as follows:
  1.  Employment .
        The
        Company hereby employs Executive to serve in such capacity and with such
        title
        as are set forth on the signature page hereto (the “Position”), and Executive
        agrees to serve in the Position with the Company ,
        or to
        serve in suchother position or positions as the Company may determine in
        its
        sole discretion. The
        Executive hereby accepts such employment and agrees to devote his or her
        best
        efforts and his or her full time and attention exclusively to the business
        and
        affairs of the Company,as such business and affairs now exist and as they
        may be
        hereafter changed or augmented, under and pursuant to the general direction
        of
        the Board of Directors of the Company (the “Board”) and the Chief Executive
        Officer of the Company. The Company shall retain full direction and control
        of
        the manner, means and methods by which the Executive performs the services
        for
        which he or she is employed hereunder and of the place or places at which
        such
        services shall be rendered.
  2.  Term
        of
        Employment .
        The term
        of the Executive’s employment shall continue until terminated by either party
        pursuant to the terms of this Agreement. Executive is employed by the Company
        “at will” and Executive’s employment may be terminated at any time, by Executive
        or the Company, for any reason and for no reason.
  3.  Compensation
        and Expenses .
  (a)  Salary .
        As
        compensation for the Executive’s services during the term of the Executive’s
        employment hereunder, the Company shall pay the Executive an annual salary
        (the
“Salary”) as is set forth on the signature page hereto, payable in 24 equal
        semi-monthly installments, subject to required tax and other fiduciary
        withholding requirements. Both Executive and Company agree and acknowledge
        that
        Executive’s Salary may change following the date hereof, and the provisions
        hereof apply to the then outstanding Salary.
  (b)  Expenses .
        The
        Company shall reimburse the Executive for all reasonable and necessary business
        expenses incurred by him or her in connection with the performance by him
        or her
        of his or her duties hereunder and in accordance with the Company’s policies and
        procedures with respect thereto, as they may be changed from time to
        time.
  (c)  Stock
        Options .
        As of
        the date of this Agreement Executive has been granted the Stock Options set
        forth on Attachment 1 hereto, and the aggregate number of shares subject
        to such
        Stock Options is set forth on the signature page hereof. Both Executive and
        Company agree and acknowledge that the Stock Option grants and the number
        of
        shares of common stock subject to such Stock Options may change following
        the
        date hereof, and the provisions hereof apply to all such then outstanding
        Stock
        Options.
  (d)  Vacation .
        The
        Executive shall be entitled to that number of annual paid personal days as
        are
        set forth on the signature page hereto. Personal days taken for vacations
        shall
        be taken at such times as the Executive and the Company may mutually
        agree.
  -1-
  (e)  Other
        Employee Benefits .
        The
        Executive shall be entitled to participate in the Company’s health insurance
        plans or programs and such other benefit plans as may be adopted, from time
        to
        time, by the Company, to the extent that they, by their terms, cover the
        Executive. Nothing in this Agreement shall preclude the Company or any affiliate
        of the Company from terminating or amending any employee benefit plan or
        program
        at any time or from time to time.
  (f)  Insurance .
        The
        Company may, at its discretion, secure at its own expense certain insurance
        policies, including without limitation, a “key-man” life insurance policy upon
        the life of the Executive, payable to the Company in the event of the
        Executive’s death. The Executive agrees that any such insurance policy shall be
        for the Company’s benefit only and acknowledges that no person claiming by or
        through the Executive shall have any right to the proceeds of such insurance
        policies. The Executive agrees to execute all documents and take all acts
        reasonably requested by the Company to secure and enjoy the benefits of such
        insurance policies.
  4.  Restrictive
        Covenants .
  (a)  Other
        Business Ventures .
        During
        the term of the Executive’s employment hereunder, the Executive shall not,
        without the prior approval of the Board, directly or indirectly, either as
        an
        officer, director, employee, agent, advisor, consultant, principal, stockholder,
        partner, owner or in any other capacity, on his own behalf or otherwise,
        in any
        way engage in, represent, be connected with or have a financial interest
        in, any
        business which is or, to the best of his or her knowledge, is about to become
        competitive with the business of the Company; provided, however, that nothing
        herein contained shall be deemed to prohibit the Executive from being a passive
        investor owning up to 1% of any class of outstanding securities of any company
        whose stock is publicly traded.
  (b)  Proprietary
        Information and Inventions Agreement .
        The
        Executive agrees that the Executive’s employment by the Company is conditioned
        upon the Executive promptly signing an agreement in substantially the form
        of
        the Company’s standard form of Proprietary Information and Inventions Agreement.
  5.  Termination
        of Employment by Executive For Good Cause .
        In the
        event the employment of the Executive with the Company is terminated by the
        Executive for “Good Cause,” the Executive shall immediately and fully vest in
        all of the Severance Benefits set forth in Section 7 below. For purposes
        of this
        Section 5, “Good Cause” shall be defined as: (i) a decrease in Executive’s
        compensation of greater than twenty-five percent (25%) of his or her
        compensation (x) immediately prior to such decrease or (y) in the aggregate
        over
        a period not exceeding two years (not including any decrease in compensation
        that is applied to each of the Company’s executive officers equally), (ii) a
        material change in Executive’s corporate position, title or responsibilities, or
        (iii) the relocation of the principal offices of the Company more than 80
        miles
        from their present location without the Executive’s consent. In the event of the
        existence of Good Cause, the Executive may terminate his employment at any
        time.
  -2-
  6.  Termination
        of Employment Without Cause .
        In the
        event the employment of the Executive with the Company is terminated without
        “Cause” after six months of employment, the Executive shall immediately and
        fully vest in all of the Severance Benefits set forth in Section 7 below.
        For
        purposes of this Section 6, “Cause” shall be defined as the Executive’s: (i)
        violation of any material provisions of any written agreement between the
        Company and Executive, (ii) being convicted of a felony and lapse of all
        rights
        of appeal, or (iii) commitment of any act of willful misconduct, gross
        negligence, or dereliction of his or her duties.
  7.  Severance
        Benefits and Election .
        In the
        event that the employment of the Executive is terminated (i) by the Executive
        for Good Cause pursuant to Section 5 or (ii) by the Company without Cause
        pursuant to Section 6, Executive shall have thirty days to elect the Release
        Severance or the No-Release Severance as set forth below:
  (a)  No-Release
        Severance .
        Executive may elect to receive the following severance benefits without agreeing
        to a general release of all claims known and unknown: The Company shall pay
        Executive: (i) a lump sum equal to six month’s base salary of the Executive;
        (ii) any and all accrued but unpaid bonuses and (iii) any and all target
        bonuses
        for the six month period following such termination of employment, in all
        such
        cases within 30 days from the effective date of the termination (the “No-Release
        Severance”).
  (b)  Partial
        Option Acceleration .
        Additionally, upon election of the No-Release Severance, the Executive shall
        (A)
        immediately and fully vest in and have the right to exercise 75% of any and
        all
        unvested stock options granted to Executive, whether or not otherwise vested,
        subject to the provisions concerning exercisability and restrictions on transfer
        of such options, set forth below.
  (c)  Release
        Severance .
        Executive may elect to receive the following severance benefits upon agreeing
        to
        a general release of all claims known and unknown: The Company shall pay
        Executive: (i) a lump sum equal to twelve month’s base salary of the Executive;
        (ii) any and all accrued but unpaid bonuses and (iii) any and all target
        bonuses
        for the twelve month period following such termination of employment, in
        all
        such cases within 30 days from the effective date of the termination (the
        “Release Severance”). .
  (d)  Full
        Option Acceleration .
        Additionally, upon election of the Release Severance, the Executive shall
        immediately and fully vest in and have the right to exercise any and all
        unvested stock options granted to Executive, whether or not otherwise vested,
        subject to the provisions concerning exercisability and restrictions on transfer
        of such options, set forth below.
  (e)  Election
        Period .
        The
        thirty day period during which Executive may elect the Release Severance
        or the
        No-Release Severance shall commence the day following Executive’s last day of
        employment and shall expire on the 31 st day
        following Executive’s last day of employment. In the event that Executive does
        not timely elect the Release Severance or the No-Release Severance, it shall
        conclusively be deemed election of the No-Release Severance and the right
        to
        elect the Release Severance shall be forever waived. Nothing herein shall
        create
        any obligation on the Company to notify Executive of his or her right to
        elect
        the Release Severance or the No-Release Severance.
  (f)  Restrictions
        on Option Exercise and Stock Sale .
        Executive and Company agree that, in the event that the employment of the
        Executive is terminated (i) by the Executive for Good Cause pursuant to Section
        5 or (ii) by the Company without Cause pursuant to Section 6, then the following
        shall apply:
  -3-
  (i)  The
        exercise period of all of Executive’s Stock Options shall be extended to and
        exercisable until, that date which is the fifth year anniversary of the date
        of
        termination of Executive’s employment; and
  (ii)  Executive
        covenants and agrees that, unless (x) there is a Corporate Transaction, as
        defined in the Stock Option Agreements by and between Executive and Company,
        or
        (y) the Company conducts a secondary stock offering in which the Company
        sells
        not less than 50% of its shares of common stock outstanding immediately
        preceding such offering, then (a) he or she will not sell any shares purchased
        under Executive’s Stock Options prior to the first six months following the date
        of termination of Executive’s employment, and (b) he or she will not sell more
        than 20% of the common stock purchased in exercise of any of Executive’s Stock
        Options during any three month period thereafter. Executive acknowledges
        and
        agrees that the Company can place stop transfer instructions to assist in
        enforcing these covenants.
  (g)  Release . **** In
        the
        event that Executive elects the Release Severance, then Executive agrees
        as
        follows: Executive, on behalf of himself or herself and his or her heirs,
        successors and assigns, hereby fully releases and forever discharges the
        Company, and its officers, directors, agents, employees, attorneys, parents,
        affiliates, and subsidiaries (the “Released Parties”), 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 Executive has
        ever
        had, now has or may now have against the Released Parties, including, without
        limitation, all claims directly or indirectly related to or arising out of
        Executive’s employment by the Company, the performance of his duties during that
        employment, and/or the termination of or his resignation from that employment.
        This waiver and release specifically includes, but is not limited to, all
        claims, if any, whether arising in tort or in contract, related to Executive’s
        employment, including any and all claims for wrongful discharge or wrongful
        termination; claims for alleged violation of public policy or breach of 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 Executive’s compensation, benefits, warrants and/or
        stock options; claims for breach of express or implied contract or for further
        monetary compensation by way of additional salary or bonus allegedly due
        Executive by reason of his 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.
 Executive
        further understands and expressly agrees that this Release specifically extends
        to all claims, whether those claims are presently known to the party or not,
        or
        suspected by the party or not. Executive agrees that he or she has not assigned
        or transferred, in whole or in part, any of the claims, actions or liabilities
        released by him or her herein. By signing below, Executive 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.”**
  8.  Confidentiality .
        Executive agrees that the terms and conditions of this Agreement are and
        shall
        remain strictly confidential, and that he or she will not disclose those
        terms
        and conditions to any third party (i) except for Executive’s tax or legal
        advisors or his spouse, or (ii) unless compelled by law to do so.
  -4-
  9.  Noninterference .
        Executive agrees that, during the term of his or her employment and for a
        period
        of 12 months thereafter, he or she shall not, on his or her own behalf or
        on
        behalf of any other person, solicit or in any manner influence or encourage
        any
        current or prospective customer, employee or other person who has a business
        relationship with the Company or any affiliate, to terminate or limit in
        any way
        their relationship with the Company, or interfere in any way with such
        relationship. For purposes hereof, (i) the term person is to be construed
        in the
        broadest sense and means and includes any natural person, company, limited
        liability company, partnership, joint venture, corporation, business trust,
        unincorporated organization or any governmental authority, and (ii) a person
        shall be considered a “prospective” customer or employee if the Company or any
        affiliate has entered into discussions or otherwise made contact with the
        person
        for the purpose of any such engagement within the six-month period prior
        to any
        solicitation by the Executive, and such fact is known or made known to the
        Executive.
  10.  Non-Competition .
        The
        Executive agrees not to, during his or her employment and for a period of
        12
        months thereafter, voluntarily or involuntarily, directly or indirectly,
        individually or on behalf of any entity or person, as a partner, stockholder,
        director, officer, principal, agent, employee, or in any other capacity or
        relationship, engage in, aid, or assist, in any competition with the Company
        within the United States of America or any foreign country where the Company
        conducts business. The Company and the Executive acknowledge the reasonableness
        of this covenant not to compete and the reasonableness of the geographic
        area
        and duration of time which is part of this covenant. The provisions of this
        paragraph 10 shall survive the termination of this Agreement by either
        party.
  11.  Voluntary
        Agreement .
        Executive expressly acknowledges and warrants that he or she has read and
        fully
        understands this Agreement; that he or she have had the opportunity to consult
        with legal counsel of his or her own choosing in order to have the terms
        and
        conditions of this Agreement fully explained to him or her; that he or she
        is
        not executing this Agreement in reliance on any promises, representations
        or
        inducements other than those set forth herein; that he or she understands
        he or
        she is giving up legal rights by signing this Agreement; and that he or she
        is
        executing it voluntarily, free of any duress or coercion, after due
        deliberation, with a full understanding of what it means to do so.
  12.  Mediation,
        Venue and Arbitration .
        If a
        dispute arises in connection with this Employment Agreement, Executive and
        Company agree that any legal action, mediation or arbitration will be conducted
        in the court, arbitration or other body having subject matter jurisdiction,
        in
        the city of Burlingame, California, and venue shall be proper only therein.
        Any
        dispute, controversy or claim arising out of or relating to provisions of
        this
        Employment Agreement shall be finally settled by arbitration in accordance
        with
        the Commercial Arbitration Rules of the American Arbitration Association
        (AAA)
        or the Judicial Arbitration and Mediation Service (JAMS), or other mutually
        acceptable arbitral body, in effect on the date of this Agreement. The
        arbitration tribunal shall adopt rules of procedure supplementary to the
        rules
        of the AAA or JAMS as it deems equitable under the circumstances. An award
        rendered by the arbitrator shall be final and binding, and judgment may be
        entered upon it in any court having jurisdiction. In no event shall this
        subsection be construed as conferring upon any court authority or jurisdiction
        to inquire into or review such award on its merits.
  13.  Miscellaneous .
  (a)  Governing
        Law .
        This
        Agreement shall be governed by, and construed, interpreted and enforced in
        accordance with, the internal laws of the State of California without reference
        to principles of conflict of laws.
  -5-
  (b)  Captions .
        The
        section headings contained herein are for reference purposes only and shall
        not
        in any way affect the meaning or interpretation of this Agreement.
  (c)  Entire
        Agreement .
        This
        Agreement sets forth the entire agreement and understanding of the parties
        hereto with respect to the subject matter hereof, and supersedes all prior
        agreements, arrangements and understandings, written or oral, between the
        parties hereto with respect to the subject matter hereof.
  (d)  Further
        Assurances .
        Each
        party hereto shall furnish to the other party hereto such instruments and
        other
        documents as the other party may reasonably request for the purpose of carrying
        out or evidencing the transactions contemplated by this Agreement.
  (e)  Attorneys’
        Fees .
        If any
        lawsuit or other action or proceeding relating to this Agreement is brought
        by
        either party hereto against the other party hereto, the prevailing party
        shall
        be entitled to recover reasonable attorneys’ fees, costs and disbursements (in
        addition to any other relief to which the prevailing party may be
        entitled).
  (f)  Notices .
        Any
        notice, request, consent or approval required or permitted to be given under
        this Agreement or pursuant to law shall be deemed effective upon the actual
        receipt by the Executive or the agent for service of process for the Acquirer
        or
        Company, as applicable.
  (g)  Amendments;
        Waivers .
        This
        Agreement may be amended, modified, superseded, canceled, renewed or extended
        and the terms or covenants hereof may be waived, but only by a written
        instrument executed by the Executive and the Company or the Acquirer as the
        case
        may be. The failure of either party at any time or times to require performance
        of any provision hereof shall in no manner affect such party’s right at a later
        time to enforce the same. No waiver by either party of the breach of any
        term or
        covenant contained in this Agreement, whether by conduct or otherwise, in
        any
        one or more instances, shall be deemed to be, or construed as, a further
        or
        continuing waiver of any such breach, or a waiver of the breach of any other
        term or covenant contained in this Agreement.
  (h)  Severability .
        Any term
        or provision of this Agreement which is prohibited, invalid or unenforceable
        in
        any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        (but only to the extent) of such prohibition, invalidity or unenforceability
        without invalidating or affecting any other term or provision hereof, any
        such
        prohibition, invalidity or unenforceability in any jurisdiction shall not
        invalidate or render unenforceable such term or provision in any other
        jurisdiction.
  (i)  Counterparts .
        This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed to be an original, but all of which together shall constitute one
        and the
        same instrument.
  (j)  Successors
        and Assigns .
        The
        terms and provisions of this Agreement shall inure to the benefit of, and
        shall
        be binding upon, the successors and assigns of the Company and/or Acquirer.
        In
        view of the personal nature of the provisions of this Agreement to be performed
        by the Executive, the Executive shall not have the right to assign or transfer
        any of the obligations or rights and benefits hereunder, nor shall said rights
        and benefits be otherwise subject to voluntary or involuntary alienation
        except
        as provided herein.
  -6-
  (k)  No
        Rules of Construction . No
        rules
        of construction are intended by the parties hereto and none shall be employed
        or
        used in the interpretation of this Agreement. For all purposes, both parties
        hereto shall be deemed joint authors hereof.
   **IN
        WITNESS WHEREOF** ,
        the
        parties have duly executed this Separation Agreement as of the date first
        above
        written.
  **ANTS
                SOFTWARE INC.****,****a Delaware
                Corporation****By:****Name
                  and Title:**
              
              **Joseph Kozak
                - President
                and CEO****Address:**
              
              **700 Airport Blvd.,
                Suite
                300****Burlingame,
                  CA 94010****EXECUTIVE****By:****Name:**
              
              **Kenneth
                Ruotolo****Address:**
              
              **C/O ANTs software
                inc.****700 Airport Blvd.
                Suite
                300****Burlingame, CA
                94010****Position:**
              
              **Sr. VP Finance
&
                Operations and****Chief Financial
                Officer****Annual
                  Salary:**
              
              **$200,000****Annual
                  Eligible Bonus:**
              **None****Total
                  Stock Options Granted:**
              
              **554,000**
   -7-
  **Attachment
        1**
 
 **Outstanding
        Stock Options - Kenneth Ruotolo**
 
 No.
                  of Shares
              Grant
                  Number
              Expiration
                  Date
              Exercise
                  Price60,680
              104
              04/09/12
              $1.9020,000
              134
              08/06/12
              $0.5220,000
              166
              01/29/14
              $0.81110,000
              197
              12/08/14
              $1.229,340
              24
              01/08/11
              $2.75125,000
              277
              06/19/16
              $2.2819,980
              29
              02/21/11
              $2.91154,000
              44
              06/21/11
              $3.1817,500
              72
              10/03/11
              $2.0017,500
              91
              11/28/11
              $2.00
 
   -8-