EXHIBIT 10.38

                              CONSULTING AGREEMENT

     This  Agreement is made and entered into by and between  SmartServ  Online,
Inc., a Delaware corporation having a principal place of business at One Station
Place,  Stamford,   Connecticut  (the  "Company"),   and  Timothy  Wenhold  (the
"Consultant") as of the 1st day of August, 2003 (the "Effective Date").

     WHEREAS,  the  Company  wishes to engage the  Consultant  to  consult  with
respect to certain aspects of its business;

     WHEREAS,  the  Consultant  is willing to make  available to the Company the
consulting  services  provided for in this Agreement as set forth below;

     For and in consideration of the foregoing premises and the mutual promises,
terms, provisions and conditions contained in this Agreement,  the parties agree
as follows:

     1. Term. Subject to earlier termination,  as hereinafter provided, the term
of this  Agreement  shall be for a period  three months (the  "Initial  Term") ,
commencing on the Effective Date,  which term may only be extended or renewed by
written  agreement of both parties The Initial  Term of this  Agreement  and any
extension or renewal terms are  collectively  referred to hereafter as "the term
hereof' or "the term of this Agreement."

     2. Relationshiu of the Parties.

          a. It is  expressly  understood  and  agreed by the  parties  that the
Consultant is an  independent  contractor in the  performance  of each and every
part of this Agreement and that nothing contained in this Agreement is intended,
or shall be construed,  to  constitute  the  Consultant as the employee,  agent,
partner or joint venturer of the Company or as constituting  the exercise by the
Company  of  control  or  direction  over the  manner  or  method  by which  the
Consultant performs the services which are the subject of this Agreement.

          b. The Consultant  shall have no right,  power or authority in any way
to bind the Company to the fulfillment of any condition,  contract or obligation
or to  create  any  liability  binding  on  the  Company.  The  Company  is  not
responsible for any expenses or liabilities  incurred by the  Consultant,  other
than business expenses  expressly  authorized in writing by an executive officer
of the Company.

     3. Consultant's  Services.

          a. During the term of this Agreement, the Consultant shall provide the
following services:

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                    (i)  Consult  with the  Company's  management  and  Board of
                    Directors concerning all business activities of the company,
                    including but not limited to, technology and operations.

          b. In addition,  the  Consultant  shall  provide such other advice and
consulting  services  as the  Company  may  from  time  to  time  request,  upon
reasonable  notice to the  Consultant,  oral or in  writing.  Services  shall be
provided during normal business hours,  unless otherwise  mutually  agreed.  The
Consultant  shall devote such  business  time as is  necessary to fully  perform
hereunder.

     4. Comuensation.

          a.  During the term  hereof,  as full  compensation  for all  services
performed by Consultant for the Company, Consultant hereby agrees to accept upon
execution of this Agreement, (i) a Common Stock Purchase Warrant (the "Warrant")
for the purchase,  in the aggregate,  of up to 50,000 shares of the Common Stock
of the  Company  at an  exercise  price of [insert  fmv on the date of  signing]
($.xx) per share.  The Warrant will become  exercisable  one year from the grant
date.  The  Warrant  shall not be  transferable  except  with the consent of the
Company and shall expire on the fifth  anniversary of the date of issuance,  and
(ii) a cash fee of five  thousand  dollars  ($5,000) per month for each month of
the Initial Term.

          b. Consultant shall pay all applicable taxes that are assessed against
him as a result of his receipt of  compensation  under this  Agreement,  and the
Company  shall  not  withhold  any  such  taxes  from the  compensation  paid to
Consultant.  Consultant  agrees to  indemnify  and hold  harmless  the  Company,
together  with its  officers  and  directors,  with respect to any such taxes or
other  assessments  that may be due and  payable  as a result of the  payment or
receipt of compensation  hereunder.

     5. No Eliaibilitv for Emulovee Benefits. The Consultant understands that he
is an independent contractor and, as such, neither he nor any dependent or other
individual  claiming  through him will be eligible to participate in, or receive
benefits under,  any of the employee  benefit plans,  programs and  arrangements
maintained by the Company  (collectively,  the "Plans").  The Consultant  hereby
waives  irrevocably  any and all rights to participate  in, or receive  benefits
under, any of the Plans.  The Consultant  agrees that he will never make a claim
under any of the Plans and agrees to  indemnify  and hold  harmless the Company,
its officers,  directors,  shareholders,  employees  and agents,  and all others
connected with it, and all  administrators and fiduciaries of the Plans, and all
others connected with any of them, from any and all liabilities, losses, damage,
costs and  expenses  of whatever  nature in any way arising out of or  connected
with any such  claim by him or by any  dependent  or other  individual  claiming
through him.

     6.  Comuliance  with Laws and Company  Policy;  Tradine  Restrictions.  The
Consultant  will comply with this Agreement and all applicable  laws,  rules and
regulations.  Some of the  information  to be  disclosed  by the  Company to the
Consultant under this Agreement is material inside information.  Material inside
information will

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only be  disclosed  to  Consultant  on a need to know  basis and for a  specific
purpose,  and  Consultant  shall  use such  information  only for such  specific
purpose. The Consultant agrees to comply with all applicable securities laws and
agrees  not to  use  material  inside  information  or  trade  in the  Company's
securities  except as permitted by the securities  laws. The Consultant  further
agrees that it will not take any action in connection  with the  performance  of
its services  herein that is illegal or in violation of applicable  laws,  rules
and  regulations.  The  Consultant  agrees  to  indemnify  and save the  Company
harmless from any and all liability  suffered by the Company as a consequence of
the Consultant's failure to comply with these obligations.

     7. Confidential Information. Non-Competition and Conflicts of Interest. The
Consultant  agrees that some restrictions on his activities during and after the
term of this  Agreement are necessary to protect the  Confidential  Information,
good will and other legitimate interests of the Company, as follows:

          a.  During the term  hereof,  the  Consultant  shall not,  directly or
indirectly,  compete  with the  Company,  whether as a  contractor,  consultant,
agent, partner, principal,  investor, employee or otherwise.  Specifically,  but
without limiting the generality of the foregoing,  the Consultant agrees that he
shall not,  directly or  indirectly  solicit or  encourage  any  customer of the
Company to terminate or diminish its relationship with the Company or to conduct
with himself or with any other person, organization or other entity any business
or activity  which such  customer  conducts or could  conduct  with the Company.
Consultant  further agrees that,  during the term hereof, he shall not, directly
or  indirectly,  hire or attempt to hire any employee of the Company,  assist in
such hiring by any other  person or entity,  or encourage  any such  employee to
terminate his or her relationship with the Company.

          b.  The  Consultant  acknowledges  that,  during  the  course  of  his
performance  under this  Agreement,  the  Consultant  may  develop  Confidential
Information for the Company and may learn of Confidential  Information developed
or owned by the Company or entrusted to it by others. The Consultant agrees that
he will not, during the term of this Agreement or at any time thereafter, use or
disclose any  Confidential  Information  unless permitted to do so in writing by
the Company.  For purposes of this Agreement,  "Confidential  Information" means
any and all  information  of the Company that is not generally  available to the
public.  Confidential  Information  includes  but is  not  limited  to  (i)  the
Company's  development,  research and marketing  activities,  (ii) the Company's
products  and  services,  (iii) the  Company's  costs,  sources  of  supply  and
strategic plans, (iv) the identity and special needs of the Company's  customers
and (v) the  people  and  organizations  with  whom  the  Company  has  business
relationships and those  relationships.  Confidential  Information also includes
such information the Company may receive or has received  belonging to customers
or others who do business with it.

     8. No Conflictine Aereements. The Consultant hereby represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder  will not breach or be in conflict  with any other  agreement to which
the Consultant is a party or is bound and that the Consultant is not now subject
to any covenants against  competition or similar covenants that would affect the
performance of

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his obligations hereunder.  The Consultant will not disclose to or use on behalf
of the Company any  proprietary  information  of any third  party  without  such
party's  consent.

The Company  acknowledges  and agrees that the  Consultant  provides  consulting
services to other  companies and that such  consulting  activities will continue
during the term of this Agreement.

     9. Indemnification.

          a. The Company shall indemnify the Consultant from and against any and
all expenses (including  attorneys' fees),  judgments,  fines, claims, causes of
action,  liabilities  and other amounts paid (whether in settlement or otherwise
actually  and  reasonably  incurred)  by  the  Consultant  arising  out  of  the
consulting  services  contemplated  by this  agreement in  connection  with such
action, suit or proceeding if (i) the Consultant was made a party to any action,
suit or proceeding by reason of the fact that the Consultant  rendered advice or
services pursuant to this Agreement, and (ii) the Consultant acted in good faith
and in a manner reasonably believed by the Consultant to be in or not opposed to
the  interests of the  Company,  and,  with  respect to any  criminal  action or
proceeding,  had no reasonable  cause to believe his conduct was  unlawful.  The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction, or upon a please of nolo contendere or its equivalent, shall not, of
itself,  create a presumption  that the Consultant did not act in good faith and
in a manner reasonably believed by the Consultant to be in or not opposed to the
best  interests of the  Company,  and,  with  respect to any criminal  action or
proceeding,  had  reasonable  cause to believe  that his conduct  was  unlawful.
Notwithstanding  the  foregoing,  the Company shall not indemnify the Consultant
with respect to any claim, issue or matter as to which the Consultant shall have
been  adjudged to be liable for gross  negligence  or willful  misconduct in the
performance  of his duties  pursuant  to this  Agreement  unless and only to the
extent that the court in which such action or suit was brought  shall  determine
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, the Consultant is fairly and reasonably  entitled
to indemnity  for such  expenses and which such court shall deem proper.

          b.  The  Consultant   shall  indemnify  and  hold  the  Company,   its
subsidiaries  and  other  affiliates,  and all of  their  respective  directors,
officers,  employees,  agents, successors and assigns, harmless from any and all
injuries,  losses,  claims and damages to any person or property,  and all costs
and  expenses,  including  without  limitation  attorneys'  fees,  and any other
liabilities  incurred  by any of the  foregoing  as a result  of any  action  or
omission of the Consultant or any employee or agent of the  Consultant  that did
not met the standard of conduct in paragraph a of this Section 9.

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     10.  Termination.  Notwithstanding the provisions of Section 1 hereof, this
Agreement shall terminate under the following circumstances:

          a. Death or  Permanent  Disabilitv.  In the event of the  Consultant's
death or permanent  disability  during the term  hereof,  this  Agreement  shall
immediately and automatically terminate.

          b. Either Party may terminate  this  Agreement  upon thirty (30) days'
prior written notice to the other Party.

          c.  Effect of  Termination.  Upon  termination  of this  Agreement  in
accordance with this Section 10 the Company shall have no further obligations to
the Consultant,  other than for compensation earned prior to termination (all of
which shall be immediately due and payable) and for indemnification  obligations
under  Section  9  for  acts  of  omissions  occurring  prior  to  the  date  of
termination.

     11. Enforceability.  If any portion or provision of this Agreement shall to
any  extent  be  declared  illegal  or  unenforceable  by a court  of  competent
jurisdiction,  then the remainder of this Agreement,  or the application of such
portion  or  provision  in  circumstances  other than those as to which it is so
declared  illegal or  unenforceable,  shall not be  affected  thereby,  and each
portion and provision of this  Agreement  shall be valid and  enforceable to the
fullest extent permitted by law.

     12.  Waiver.  No waiver of any provision  hereof shall be effective  unless
made in writing and signed by the waiving party.  The failure of either party to
require the  performance  of any term or  obligation of this  Agreement,  or the
waiver by either  party of any breach of this  Agreement,  shall not prevent any
subsequent  enforcement  of such term or obligation or be deemed a waiver of any
subsequent breach.

     13. Notices. All notices provided by this Agreement shall be in writing and
shall be given by facsimile transmission,  overnight courier, by registered mail
or by  personal  delivery,  by one party to the other,  addressed  to such other
party at the applicable  address set forth below,  or to such other addresses as
may be  given  for  such  purpose  by such  other  party by  notice  duly  given
hereunder.  Notice shall be deemed  properly  given on the date of delivery.

To Consultant:
                Timothy Wenhold
                4031 Mill Road
                Collegeville, Pa. 19426
                Email: timw@factoryx.com

To the Company:
                SmartServ  Online,  Inc.
                Metro Center, One Station Place
                Stamford, CT 06902
                ATTENTION: Chairman


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     14. Entire  A2reement.  This  Agreement  contains the entire  understanding
between the parties hereto with respect to the ttansactions contemplated hereby,
and may not be amended,  modified, or altered except by an instrument in writing
signed by the party against whom such amendment,  modification, or alteration is
sought to be enforced.

     15.  Governing  Law. This Agreement  shall be construed and  interpreted in
accordance with the laws of the State of New York.

     16. Bindine Effect; Assienment.  This Agreement shall bind and inure to the
benefit of the parties hereto and their respective  permitted heirs,  executors,
administrators,  successors and assigns.  Neither the Company nor the Consultant
may make any  assignment of this Agreement or any interest  herein,  without the
prior consent of the other party, provided, however, that the Company may assign
its rights and  obligations  under this  Agreement  without  the  consent of the
Consultant   in  the  event  that  the   Company   shall   hereafter   effect  a
reorganization, consolidate with, or merge into any other person, corporation or
other entity or transfer all or substantially all of its properties or assets to
any other person or entity.

     17.  Construction.  The captions and headings contained herein are inserted
only for  convenient  reference,  are not a part  hereof  and the same shall not
limit or  construe  the  provisions  to which  they  apply.  References  in this
Agreement  to  "paragraphs"  are to the  paragraphs  in this  Agreement,  unless
otherwise noted.

     18.  Expenses.  Each party shall pay and be  responsible  for the costs and
expenses, including, without limitation, attorneys' fees, incurred by such party
in connection with the negotiation,  preparation and execution of this Agreement
and the ttansactions contemplated hereby.

     19. No Rights to Others. Nothing herein contained or implied is intended or
shall be  construed to confer upon or give to any person,  firm or  corporation,
other than the parties hereto.

     20.  Counterpart.  This  agreement  may be executed  simultaneously  in two
counterparts,  each of which  shall be  deemed  an  original,  but both of which
together shall constitute one and the same agreement,  binding upon both parties
hereto, notwithstanding that both parties are not signatories to the original or
the same counterpart.

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     IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement as of the
Effective Date.


                                        SMARTSERV ONLINE, INC.



                                        By: /s/ Scott Perry
                                           -------------------------------------
                                        Scott Perry, Chairman of the Board


                                        /s/ Timothy G Wenhold
                                        ----------------------------------------
                                        Timothy G Wenhold, Consultant