03/10/04

 

CONSULTINGAGREEMENT

 

THISCONSULTING AGREEMENT (the "Agreement") is made and entered intoeffective the 12th day of March, 2004 by and between TheSUBWAY.com, Inc. (the"Consultant"), whose principal place of business is 1825 Main Street,Suite 201, Weston, FL 33326 and Hesperia Holdings Inc. (the "Client"),whose principal place of business is 9780 E Avenue Hesperia CA 92345.

 

WHEREAS,Consultant is in the business of providing services for management consulting,business advisory, shareholder information and public relations; and

 

WHEREAS,the Client deems it to be in its best interest to retain Consultant to render tothe Client such services as may be needed; and

 

WHEREAS,Consultant is ready, willing and able to render such consulting and advisoryservices to Client.

 

NOWTHEREFORE, in consideration of the mutual promises and covenants set forthin this Agreement, the receipt and sufficiency of which are hereby acknowledged,the parties hereto agree as follows:

 

1.**Consulting Services**. The client hereby retains the Consultant as anindependent consultant to the Client and the Consultant hereby accepts andagrees to such retention. The services provided by the Consultant are:disseminate a two page "Highlighter" by means of "Targeted"E-Mail and operate an intense marketing campaign to new investors for a periodof three (3) months.

 

Itis acknowledged and agreed by the Client that Consultant carries no professionallicenses, and is not rendering legal advice or performing accounting services,nor acting as an investment advisor or brokerage/dealer within the meaning ofthe applicable state and federal securities laws. The services of Consultantshall not be Exclusive nor shall Consultant be required to render any specificnumber of hours or assign specific personnel to the Client or its projects.

 

2.**Independent Contractor.** Consultant agrees to perform its consultingduties hereto as an independent contractor. Nothing contained herein shall beconsidered to as creating an employer-employee relationship between the partiesto this Agreement. The Client shall not make social security, worker'scompensation or unemployment insurance payments on behalf of Consultant. Theparties hereto acknowledge and agree that Consultant cannot guarantee theresults or effectiveness of any of the services rendered or to be rendered byConsultant. Rather, Consultant shall conduct its operations and provide itsservices in a professional manner and in accordance with good industry practice.Consultant will use its best efforts and does not promise results.

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3.**Time, Place and Manner of Performance.** The Consultant shall be availablefor advice and counsel to the officers and directors of the Client as suchreasonable and convenient times and places as may be mutually agreed upon.Except as aforesaid, the time, place and manner of performance of the serviceshereunder, including the amount of time to be allocated by the Consultant to anyspecific service, shall be determined at the sole discretion of the Consultant.

 

4.**Term of Agreement.** The term of this Agreement shall be one (1) year,commencing on the date of this Agreement, subject to prior termination ashereinafter provided.

 

5.**Compensation.** In providing the foregoing services, Consultant shall beresponsible for all costs incurred except the Client will be responsible formailing out due diligence requests. Client shall pay Consultant for its serviceshereunder as follows: to issue 150,000 restricted shares of Client's stock toConsultant upon signing of this agreement. Client will also at its own expenseprovide legal opinion of council as needed to remove any legends on said sharesone year from the effective date of this agreement. All fees may also be paid incash by the Client referring to the price of the offer or ask the day payment isdue. For purposes of this paragraph, the dollar value of any shares given forcompensation shall be the closing price of the Client's common stock as tradedin the over-the-counter market and quoted on the OTC Bulletin Board on thetrading day immediately preceding the compensation due date. Any shares with theexception of the 150,000 shares mentioned above shall be unrestricted as totransferability and the Certificates shall not bear any legends or restrictions.The client warrants, represents and agrees that the shares were not issued underSEC Form S-8, that the third party is not an affiliate of the Client, i.e. onewho, through stock ownership, a position as director, officer or employee or byother means, has the power to control, directly or indirectly, the management ofthe Client and, if the third party's stock was issued in a private placement,that the requirements for the exemption for private placement stock werecomplied with and the third party has held the stock for the prescribed periodnecessary to permit the shares to be sold without registration.

 

6.**Late Payment.** In the event of late payment of any compensation due underthis Agreement, and in addition to the rights granted the Consultant underparagraph 8 "Termination" of this Agreement, Consultant mayimmediately remove Client's company from thesubway.com website until any arrearsin compensation are brought current.

 

7.**Client's Representations.** The Client represents that it is in compliancewith all applicable Securities and Exchange Commission reporting and accountingrequirements and all applicable requirements of the NASD or any stock exchange.The Client further represents that it has not been and is not the subject of anyenforcement proceeding or injunction by the Securities and Exchange Commissionor any state securities agency.

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8.Termination.

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(a)Consultant's relationship with the Client hereunder may be terminated forjustifiable cause, at any time, by either party, upon 3 days written priornotice.

 

(b)This Agreement shall automatically terminate upon the dissolution, bankruptcy orinsolvency of the Client or Consultant.

 

(c)This Agreement may be terminated by either party upon giving written notice tothe other party if the other party is in default hereunder and such default isnot cured within fifteen (15) days of receipt of written notice of such default.

 

(d)Consultant and Client shall have the right and discretion to terminate thisAgreement should the other party in performing their duties hereunder, violateany law, ordinance, permit or regulation of any governmental entity, except forviolations which either singularly or in the aggregate do not have or will nothave a material adverse effect on the operations of the Client.

 

(e)In the event of any termination hereunder all shares or funds paid to theConsultant through the date of termination shall be fully earned andnon-refundable and the parties shall have no further responsibilities to eachother except that the Client shall be responsible to make any and all paymentsif any, due to the Consultant through the date of the termination and theConsultant shall be responsible to comply with the provisions of section 10hereof.

 

9.**Work Product.** It is agreed that all information and materials producedfor the Client shall be the property of the Consultant, free and clear of allclaims thereto by the Client, and the Client shall retain no claim of authorshiptherein.

 

10.**Confidentiality.** The Consultant recognizes and acknowledges that it hasand will have access to certain confidential information of the Client and itsaffiliates that are valuable, special and unique assets and property of theClient and such affiliates. The Consultant will not, during the term of thisAgreement, disclose, without the prior written consent or authorization of theClient, any of such information to any person, for any reason or purposewhatsoever. In this regard, the Client agrees that such authorization or consentto disclose may be conditioned upon the disclosure being made pursuant to asecrecy agreement, protective order, provision of statute, rule, regulation orprocedure under which the confidentiality of the information is maintained inthe hands of the person to whom the information is to be disclosed or incompliance with the terms of a judicial order or administrative process.

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11.**Anti Dilution.** Client shall also for a period of one (1) year commencingthe Effective Date of this agreement arrange for one or more third parties totransfer 1.5% of any newly registered or issued securities of the clientscompany within the term of this agreement in the form of fully paidnon-assessable free trading registered shares within 5 business days ofregistration or issuance. Consultant will omit the first 200,000 registered orissued shares from the Client's responsibility under this section. If the150,000 restricted shares which are due upon the signing of this agreement areregistered and become free trading during the term of this agreement, the AntiDilution responsibility of the Client will terminate at that point on. TheClient will than only be responsible for 1.5% of any newly registered oroutstanding shares up to that point. Any shares shall be unrestricted as totransferability and the Certificates shall not bear any legends or restrictionsand all shares will bear the same requirements as noted in section five (5)herein (with the exception that the stock due under this section is freetrading, not restricted).

 

12.**Conflict of Interest.** The Consultant shall be free to perform servicesfor other persons. The Consultant will notify the Client of its performance ofconsultant services for any other person, which could conflict with itsobligations under the Agreement. Upon receiving such notice, the Client mayterminate this Agreement or consent to the Consultant's outside consultingactivities; failure to terminate, this Agreement within seven (7) business daysof receipt of written notice of conflict shall constitute the Client's ongoingconsent to the Consultant's outside consulting services.

 

13.**Disclaimer of Responsibility for Act of the Client.** In no event shallConsultant be required by this Agreement to represent or make managementdecisions for the Client. Consultant shall under no circumstances be liable forany expense incurred or loss suffered by the Client as a consequence of suchdecisions, made by the Client or any affiliates or subsidiaries of the Client.

 

14.**Indemnification.** (a) The client shall protect, defend, indemnify and holdConsultant and its assigns and attorneys, accountants, employees, officers anddirector harmless from and against all losses, liabilities, damages, judgments,claims, counterclaims, demands, actions, proceedings, costs and expenses(including reasonable attorneys' fees) of every kind and character resultingfrom, relating to or arising out of (a) the inaccuracy, non-fulfillment orbreach of any representation, warranty, covenant or agreement made by the Clientherein, or (b) negligent or willful misconduct, occurring during the termthereof with respect to any of the decisions made by the Client (c) a violationof state or federal securities laws. (b) The Consultant shall protect, defend,indemnify and hold Client and its assigns and attorneys, accountants, employees,officers and director harmless from and against all losses, liabilities,damages, judgments, claims, counterclaims, demands, actions, proceedings, costsand expenses (including reasonable attorneys' fees) of every kind and characterresulting from, relating to or arising out of (a) the inaccuracy,non-fulfillment or breach of any representation, warranty, covenant or agreementmade by the Consultant herein, or (b) negligent or willful misconduct, occurringduring the term thereof with respect to any of the decisions made by theConsultant (c) a violation of state or federal securities laws.

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15.**Notices.**Any notices required or permitted to be given under thisAgreement shall be sufficient if in writing and delivered or sent by registeredor certified mail, or by Federal Express or other recognized overnight courierto the principal office of each party.

 

16.**Waiver of Breach.** Any waiver by either party or a breach of any provisionof this Agreement by the other party shall not operate or be construed as awaiver of any subsequent breach by any party.

 

17.**Assignment.** This Agreement and the right and obligations of theConsultant hereunder shall not be assignable without the written consent of theClient.

 

18.**Applicable Law.** It is the intention of the parties hereto that thisAgreement and the performance hereunder and all suits and special proceedingshereunder be construed in accordance with and under and pursuant to the laws ofthe State of Florida and that in any action, special proceeding or otherproceedings that may be brought arising out of, in connection with or by reasonof this Agreement, the law of the State of Florida shall be applicable and shallgovern to the exclusion of the law of any other forum, without regard to thejurisdiction on which any action or special proceeding may be instituted.

 

19.**Severability.** All agreements and covenants contained herein areseverable, and in the event any of them shall be held to be invalid by anycompetent court, the Agreement shall be interpreted as if such invalidagreements or covenants were not contained herein.

 

20.**Entire Agreement.** This Agreement constitutes and embodies the entireunderstanding and agreement of the parties and supersedes and replaces all otheror prior understandings, agreements and negotiations between the parties.

 

21.**Waiver and Modification.** Any waiver, alteration, or modification of anyof the provisions of this Agreement shall be valid only if made in writing andsigned by the parties hereto. Each party hereto, may waive any of its rightshereunder without affecting a waiver with respect to any subsequent occurrencesor transactions hereof.

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22.**Binding Arbitration.** Any controversy or claim arising out of or relatingto this Agreement, or the breach thereof, shall be settled by arbitrationadministered by the American Arbitration Association under its CommercialArbitration Rules, and judgment on the award rendered by the arbitrator(s) maybe entered in any court having jurisdiction thereof. The arbitration shall beconducted in Miami-Dade County, Florida.

 

23.**Counterparts and Facsimile Signature.** This Agreement may be executedsimultaneously in two or more counterparts, each of which shall be deemed anoriginal, but all of which taken together shall constitute one and the sameinstrument. Execution and delivery of this Agreement by exchange of facsimilecopies bearing the facsimile signature of a party hereto shall constitute avalid and binding execution and delivery of this Agreement by such party. Suchfacsimile copies shall constitute enforceable original documents.

 

**INWITNESS WHEREOF,** the parties hereto have duly executed and delivered thisAgreement, effective as of the date set forth above.

 

CONSULTANT:

 

TheSUBWAY.com,Inc.

 

By:/s/Charles T. Tamburello                                                                   DATE: __________________________

   Charles T. Tamburello, President/CEO

 

CLIENT:

 

HesperiaHoldings, Inc.

By:/s/Don Shimp                                                                                    DATE:___________________________

     Don Shimp, CEO