ANTS
SOFTWARE INC. [LOGO OMITTED]


                                                                    EXHIBIT 10.1

October 12, 2004

Mr. Boyd Pearce
----------------
----------------

Dear Boyd:

The Board of Directors  (the "Board") of ANTs  software inc. (the  "Company") is
pleased to offer you the position of President and Chief Operating  Officer with
the Company,  reporting  to Francis K.  Ruotolo,  Chairman  and Chief  Executive
Officer of the Company.  Your full-time employment shall commence on October 18,
2004.

Your starting annual salary will be $200,000.00, payable semi-monthly subject to
applicable  withholding.  You  will be  eligible  to  earn a  bonus  of up to an
additional  $100,000  contingent  on your  attainment  of  certain  goals  to be
established by the Compensation  Committee of the Board in its sole and absolute
discretion.  You will also be eligible to participate in employee  benefit plans
adopted  by the  Company  from time to time.  You will be  eligible  for 15 paid
vacation  days per  year,  earned  at the rate of 1.25  days per  month  worked.
Subject to Board approval,  and regulatory  approval,  the Company will grant to
you: i) a fully vested  option to purchase up to 100,000  shares of Common Stock
under  the  Company's  2000  Stock  Option  Plan  ("Plan")  and ii) an option to
purchase up to 650,000 shares of Common Stock under the Plan subject to vesting.
In the event the Board and the  shareholders  of the Company approve an increase
in the number of shares  reserved  under the Plan, and subject to Board approval
and regulatory  approval,  the Company will also grant you, in the event you are
still  employed by the  Company,  an option to purchase up to 750,000  shares of
Common Stock of the Company

By accepting this offer,  you agree to devote,  during your  employment with the
Company,  your full business time and attention  exclusively to the business and
affairs of the Company and to comply in all respects  with all of the  Company's
present and future policies.

Your employment by the Company is not for a specified  term, it is at-will,  and
may be  terminated  by you or the Company at any time  without  notice,  for any
reason and for no reason, with or without cause.

If you accept this offer,  the terms described in this letter shall be the terms
of your employment.  Any additions or modifications of these terms would have to
be in writing and signed by you and an  authorized  representative.  This letter
represents  all of the terms and  conditions  of the subject  matter  hereof and
supersedes  and replaces any  previous  understanding  by or between you and the
Company.

Your  employment  pursuant to this offer is  contingent  on your  executing  the
Company's standard  confidentiality  agreement,  upon your providing the Company
with the legally  required proof of your identity and  authorization  to work in
the United States and on the  completion of background  and reference  checks to
the satisfaction of the Board.

We  look   forward  to  having  you  join  the   Company.   If  you  accept  the
above-described  offer,  please return to me a signed copy of this letter.  This
offer  will  expire  one week from the date of this  letter if not  accepted  or
extended by the Company.

ANTs software inc.                          Agreed as stated above:
A Delaware Corporation


By:                                         By:
    -------------------------------------      -------------------------------
    Francis Ruotolo                                     Boyd Pearce
    Chairman and Chief Executive Officer



801 Mahler Road, Suite G, Burlingame, CA
94010 650-692-0219 voice 650-692-0253
fax www.antssoftware.com