Document:

Exhibit 10.4

                              SEPARATION AGREEMENT

      THIS SEPARATION AGREEMENT (the "Agreement") is made and entered into to be
effective as of January 8, 2001, by and between ANTs software inc., a Delaware
corporation (the "Company"), and Francis K. Ruotolo (the "Executive").

      WHEREAS the parties entered into a letter agreement dated January 4, 2001
pursuant to which Executive is employed by the Company as Chief Executive
Officer, President and Chairman for a term of two (2) years (the "Letter
Agreement").

      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. Termination of Employment by the Executive.

      (a) For Good Cause. The Executive may terminate his employment at any time
for Good Cause. For purposes of this Agreement, Good Cause shall be defined as
(i) a decrease in Executive's compensation of greater than twenty-five percent
(25%) of his 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. If the employment of the Executive is terminated by the Executive for
Good Cause, the Company shall have no obligation to the Executive except to pay
the Executive his salary until that date six (6) months following the effective
date of the termination.

      (b) Not For Good Cause. The Executive may terminate his employment at any
time for any reason not involving Good Cause, by giving written notice to the
Company at least two (2) months prior to the effective date of the termination.
Upon such termination, the Company shall be under no obligation to the
Executive, except to pay his accrued and unpaid salary and accrued unused paid
time off up to the effective date of the termination.

      2. Termination of Employment by the Company.

            (a) For Cause. Notwithstanding anything to the contrary in the
Letter Agreement or in this Agreement, the Company may terminate the Executive's
employment hereunder for Cause at any time. Termination of the Executive's
employment shall be deemed to be "for Cause" in the event that the Executive (i)
violates any material provisions of the Letter Agreement, this Agreement or the
Proprietary Information and Inventions Agreement of substantially even date
hereto, (ii) is charged with or indicted for a felony, or (iii) commits any act
of willful misconduct, gross negligence, or dereliction of his duties hereunder.
Upon such termination, the Company shall be under no obligation to the
Executive, except to pay his

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accrued and unpaid salary and accrued unused paid time off up to the effective
date of the termination.

      (b) Without Cause. Notwithstanding anything to the contrary in the Letter
Agreement or in this Agreement, the Company may terminate Executive's employment
at any time without Cause; provided, however, that in such event the Company
shall provide the Executive with written notice of such termination at least two
(2) months prior to the effective date of the termination. If the employment of
the Executive is terminated pursuant to this Section 2(b), the Company shall
have no obligation to the Executive except to pay the Executive his salary until
that date six (6) months following the effective date of the termination.

      3. Upon Death of Executive. The Executive's employment hereunder shall be
deemed terminated automatically in the event of the death of the Executive. Upon
the death of the Executive, the Company shall be under no obligation to the
Executive or his estate, except to pay his accrued and unpaid salary and accrued
unused paid time off up to the effective date of the termination.

      4. Corporate Transaction In the event of one or more of the following
transactions (a "Corporate Transaction"):

            (a) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state of the Company's incorporation,

            (b) the sale, transfer, or other disposition of all or substantially
all of the assets of the Company, or

            (c) any reverse merger in which the Company remains the surviving
entity following its acquisition by another enterprise,

where the consideration received by the Company is less than five dollars
($5.00) per share on a full dilution and full conversion basis and where the
successor company does not offer Executive a position of similar title, office
and responsibilities and equal salary, to the position held and salary received
by the Executive with and from the Company immediately prior to such Corporate
Transaction, then the Company and its successor shall continue to pay Executive
his salary for a period of twenty-four (24) months starting from the effective
date of such Corporate Transaction.

      5. 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.

            (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.

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            (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, including the Letter Agreement,
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 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. 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 one or two
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, including, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the assets of the Company whether by merger, consolidation,
sale or otherwise (and such successor shall thereafter be deemed the "Company"
for purposes of this Agreement). 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

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obligations or rights and benefits hereunder, nor shall said rights and benefits
be otherwise subject to voluntary or involuntary alienation except as provided
herein.

            (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 Agreement as of
the date first above written.

                                            ANTS SOFTWARE INC.,
                                            a Delaware Corporation

                                        By: ____________________________________
                                            Joan Elizabeth Cronin, Executive
                                            Vice President and Managing Director
                                            of Human Resources

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

                                            ____________________________________
                                            Francis K. Ruotolo

                                   Address: 533 Allegheny Drive
                                            Walnut Creek, CA 94598

                                     - 4 -Exhibit 10.5

                            INDEMNIFICATION AGREEMENT

      THIS AGREEMENT is made and entered into this ___ day of ________, 2001
between ANTs software inc., a Delaware corporation ("Corporation") and ________
("Director").

                                WITNESSETH THAT:

      WHEREAS, Director, a member of the Board of Directors of the Corporation,
performs a valuable service in such capacity for Corporation; and

      WHEREAS, the Certificate of Incorporation of the Corporation authorize and
permit contracts between Corporation and the members of its Board of Directors
providing for indemnification, among other things, of such directors; and

      WHEREAS, in accordance with the authorization as provided by the Delaware
General Corporation Law, as amended ("Code"), Corporation may purchase and
maintain a policy or policies of Directors and Officers Liability Insurance ("D
& O Insurance"), covering certain liabilities which may be incurred by its
directors and officers in the performance as directors and officers of the
Corporation; and

      WHEREAS, as a result of recent developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors by such D & O
Insurance and by statutory and bylaw indemnification provisions; and

      WHEREAS, in order to induce Director to serve or continue to serve as the
case may be, as a member of the Board of Directors of Corporation, Corporation
has determined that it is in its best interests to enter into this contract with
Director;

      NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:

      1. Indemnity of Director. Corporation hereby agrees to hold harmless and
indemnify Director to the full extent authorized by the provisions of the Code,
as it may be amended from time to time.

      2. Additional Indemnity. Subject only to the limitations set forth in
Section 3 hereof, Corporation hereby further agrees to hold harmless and
indemnify Director:

      (a) against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Director in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of Corporation) to which Director is, was or at any
time becomes a party, or is reasonably thought to be threatened to be made a
party, by reason of the fact that Director is, was or at any time becomes a
director, officer, employee or agent of

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Corporation, or is or was serving or at any time serves at the request of
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise; and

      (b) otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusive provisions of the Certificate of
Incorporation of the Corporation, the bylaws of the Corporation, and the Code.

      3. Limitations on Additional Indemnity.

      (a) No indemnity pursuant to Section 2 hereof shall be paid by Corporation
for any of the following:

            (i) to the extent the aggregate of losses to be indemnified exceeds
the sum of (A) such losses for which the Director is indemnified pursuant to
Section 1 hereof and (B) any settlement pursuant to any D & O Insurance
purchased and maintained by Corporation;

            (ii) in respect to remuneration paid to Director if it shall be
determined by a final judgment without right of appeal, or other final
adjudication that such remuneration was in violation of law;

            (iii) on account of any suit in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;

            (iv) on account of Director's acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law;

            (v) on account of any proceeding (other than a proceeding referred
to in Section 8(b) hereof) initiated by the Director unless such proceeding was
authorized by the uninterested directors of the Corporation; or

            (vi) if a final decision without right of appeal by a Court having
jurisdiction in the matter shall determine that such indemnification is not
lawful.

      (b) In addition to those limitations set forth above in paragraph (a) of
this Section 3, no indemnity pursuant to Section 2 hereof in an action by or in
the right of Corporation shall be paid by Corporation for any of the following:

            (i) on account of acts or omissions that Director believed or
believes to be contrary to the best interests of the Corporation or its
shareholders or that involve the absence of good faith on the part of Director;

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            (ii) with respect to any transaction from which Director derived an
improper personal benefit;

            (iii) on account of acts or omissions that show a reckless disregard
for Director's duties to the corporation or its shareholders in circumstances in
which Director was aware, or should have been aware, in the ordinary course of
performing a Director's duties, of a risk of serious injury to Corporation or
its shareholders;

            (iv) on account of acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of Director's duties to the
Corporation or its shareholders;

            (v) to the extent prohibited by Section 144 of the Delaware general
Corporation Law, entitled "Interested Directors; Quorum;"

            (vi) in respect of any claim, issue or matter as to which Director
shall have been adjudged to be liable to Corporation in the performance of
Director's duties to Corporation and its shareholders, unless and only to the
extent that the court in which such proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, Director is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that such court shall determine;

            (vii) of amounts paid in settling or otherwise disposing of a
pending action without court approval; and

            (viii) of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.

      4. Contribution. If the indemnification provided in Sections 1 and 2 is
unavailable and may not be paid to Director for any reason other than those set
forth in Section 3 (excluding subsections 3(b)(vii) and (viii)), then in respect
of any threatened, pending or completed action, suit or proceeding in which
Corporation is jointly liable with Director (or would be if joined in such
action, suit or proceeding), Corporation shall contribute to the amount of
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Director in
such proportion as is appropriate to reflect (i) the relative benefits received
by Corporation on the one hand and Director on the other hand from the
transaction from which such action, suit or proceeding arose, and (ii) the
relative fault of Corporation on the one hand and of Director on the other in
connection with the events which resulted in such expenses, judgments, fines or
settlement amounts, as well as any other relevant equitable considerations. The
relative fault of Corporation on the one hand and of Director on the other shall
be determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or

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settlement amounts. Corporation agrees that it would not be just and equitable
if contribution pursuant to this Section 4 were determined by pro rata
allocation or any other method of allocation which does not take account of the
foregoing equitable considerations.

      5. Continuation of Obligations. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Director
was a director of Corporation or serving in any other capacity referred to
herein.

      6. Notification and Defense of Claim. Promptly after receipt by Director
of notice of the commencement of any action, suit or proceeding, Director will,
if a claim in respect thereof is to be made against Corporation under this
Agreement, notify Corporation of the commencement thereof; but the omission so
to notify Corporation will not relieve it from any liability which it may have
to Director otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Director notifies Corporation of the
commencement thereof:

      (a) Corporation will be entitled to participate therein at its own
expense;

      (b) Except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to Director.
After notice from Corporation to Director of its election so as to assume the
defense thereof, Corporation will not be liable to Director under this Agreement
for any legal or other expenses subsequently incurred by Director in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Director shall have the right to employ its counsel in
such action, suit or proceeding but the fees and expenses of such counsel
incurred after notice from Corporation of its assumption of the defense thereof
shall be at the expense of Director unless (i) the employment of counsel by
Director has been authorized by Corporation, (ii) Director shall have reasonably
concluded that there may be a conflict of interest between Corporation and
Director in the conduct of the defense of such action or (iii) Corporation shall
not in fact have employed counsel to assume the defense of such action, in each
of which case the fees and expenses of counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Corporation, which is
against or involves Director, or as to which Director shall have made the
conclusion provided for in (ii) above; and

      (c) Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall not settle any action or claim in
any manner which would impose any penalty or

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limitation on Director without Director's written consent. Neither Corporation
nor Director will unreasonably withhold its consent to any proposed settlement.

      7. Advancement and Repayment of Expenses.

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      (a) In the event that Director employs his own counsel pursuant to Section
6(b)(i) through (iii) above, Corporation shall advance to Director, prior to any
final disposition of any threatened or pending action, suit or proceeding,
whether civil, criminal, administrative or investigative, any and all reasonable
expenses (including legal fees and expenses) incurred in investigating or
defending any such action, suit or proceeding within ten (10) days after
receiving copies of invoices presented to Director for such expenses.

      (b) Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under applicable law, the
Bylaws, this Agreement or otherwise, to be indemnified by Corporation for such
expenses.

      8. Enforcement.

      (a) Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation hereby in
order to induce Director to become or continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.

      (b) In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, Corporation shall reimburse Director for all of Director's reasonable
fees and expenses in bringing and pursuing such action.

      9. Separability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.

      10. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.

      11. Binding Effect. This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the benefit of
Corporation, its successors and assigns.

      12. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.

                                                ANTS SOFTWARE INC.
                                                a Delaware corporation

                                            By: ________________________________
                                                ___________, President and Chief
                                                Executive Officer

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

                                                ________________________________
                                                Director

                                       Address: ________________________________
                                                ________________________________
                                                ________________________________

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