Exhibit 10.6

                                                                  Execution Copy

                              SEPARATION AGREEMENT

         SmartServ Online, Inc., a Delaware corporation (such entity, along with
its successors and assigns, hereinafter referred to as the "Company"), and Mario
F. Rossi (hereinafter  collectively with his heirs,  executors,  administrators,
successors and assigns,  referred to as  "Employee"),  mutually  desire to enter
into this Separation  Agreement effective as of the "Effective Date" (defined in
Section 17 hereof), and agree that:

         Employee understands that this Separation Agreement is executed for the
benefit of the Company and each of its affiliates,  subsidiaries,  predecessors,
successors  and  assigns,  as well as each of the current and former  directors,
officers,  employees and agents of the Company and each such other  entity,  all
both  individually  and in  their  official  capacities  (such  individuals  and
entities   collectively   referred  to  in  this  Separation  Agreement  as  the
"Representatives");

         Employee has consult  with,  and has been  represented  by, an attorney
during the  negotiation  and execution  this  Separation  Agreement and has been
advised as to the meaning and effect of this Separation Agreement;

         Employee  has  carefully   read  this   Separation   Agreement,   fully
understands  the terms and conditions set out herein and  voluntarily  agrees to
these terms and conditions.

         NOW  THEREFORE,  the  parties  hereto,  for  the  full  and  sufficient
consideration set forth below, hereby agree as follows:

         1. EMPLOYEE'S SEPARATION
            ---------------------

            The parties acknowledge that, following  discussions with each other
and based upon the provisions of this Separation Agreement,  Employee retired as
an  officer  and a director  of the  Company  effective  August,  31,  2003 (the
"Retirement  Date").  Employee has resigned from all other positions he may hold
with the Company or any of its subsidiaries or other businesses, effective as of
the  Retirement  Date,  and will  promptly  take  such  further  actions  as are
necessary  to  accomplish  such  retirement  and/or  resignations.   As  of  the
Retirement Date,  Employee's salary ceased, and any entitlement  Employee has or
might  have  under  a  Company-provided   benefit  plan,  program  or  practice,
terminated, except as required by federal or state law or as otherwise described
below.

            The parties acknowledge that the Company has invited the Employee to
be a member of the Company's  Advisory Board, and that the Employee has accepted
appointment to the Advisory Board.


<PAGE>

         2. REMUNERATION
            ------------

            The parties  acknowledge  that up to and  including  the  Retirement
Date,  the Employee has earned  remuneration  in the form of deferred  salary of
$112,500 ("Deferred Salary"), in the form of regular salary of $12,500 ("Regular
Salary"),  in the form of accrued but unused vacation (10 days) in the amount of
$4,167 ("Vacation" and, together with Regular Salary,  "Regular  Compensation"),
and in the form of bonus in the amount of $120,750  ("Bonus").  The Company will
pay the  Employee  his Regular  Compensation  in two (2) equal  installments  of
$8,333.50  the first of which shall be due within ten (10)  calendar days of the
Effective Date, and the second of which shall be due within thirty (30) calendar
days of the Effective Date. The Employee  voluntarily  and  irrevocably  waives,
releases and discharges  the Company from any  obligation to pay his Bonus.  The
Company will reimburse the Employee for any  reasonable  and necessary  business
expenses for which the Employee has  requested  reimbursement  within sixty (60)
calendar days from the Effective Date.

         3. NON-RECOURSE NOTE
            -----------------

            The  Employee is the obligor on a  promissory  note made in favor of
the Company  with respect to the  purchase of 206,080  shares of Company  stock,
which the Employee  pledged as collateral for the note. The note is non-recourse
as to its principal  amount,  but carries an interest  payment  obligation  that
constitutes a personal obligation of the Employee, which obligation,  calculated
to the Retirement Date, equals $47,004.00 (the "Accrued Interest").

            The Company  hereby  extends the maturity  date of the note to April
15, 2004 (the "New Maturity Date") and agrees to suspend the accrual of interest
on the note for the period  between  the  Retirement  Date and the New  Maturity
Date, and the note is hereby amended accordingly.  On or before the New Maturity
Date,  the Employee shall assign and transfer all of said shares of stock to the
Company, and the Company shall, upon receipt of said shares of stock, cancel the
non-recourse debt evidenced by the note.

            The parties  acknowledge that, on the New Maturity Date,  $81,370.69
of the Employee's  Deferred Salary shall be offset against the Accrued Interest.
The  remaining  $31,129.31  shall  be paid  to the  Employee  in two  (2)  equal
installments  of  $15,564.65,  the first of which  shall be due  within  six (6)
months of the Effective Date, and the second of which shall be due within twelve
(12) months of the  Effective  Date.  The Accrued  Interest  offset and Deferred
Salary  payments  described  in this  paragraph  shall be, in each case,  net of
applicable Federal and state withholding employment taxes. The Company will make
the appropriate  state and Federal tax employment and withholding taxes payments
to the respective  taxing entities within the time and in the manner  prescribed
by applicable law.

         4. MEDICAL BENEFITS
            ----------------

            The Employee and his dependents will continue as participants in the
Company-paid  group medical benefits until December 31, 2003.  Effective January
1, 2003,  the Employee will be eligible to receive a COBRA benefit  continuation
notice, which will be sent to the Employee as required by law.



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<PAGE>

         5. EMPLOYMENT AGREEMENT
            --------------------

            The Amended and Restated  Employment  Agreement between the Employee
and the Company dated  January 1, 1999 and amended  September 15, 2000 is hereby
terminated.   Any  provision  of  the  Employment   Agreement  to  the  contrary
notwithstanding, the Employee has no further obligations with respect to Section
9, Non-Competition,  described in the Employment Agreement.  The Indemnification
provisions  of Section 8, and the  Non-solicitation  of Customers  and Suppliers
provisions of Section 10 of the  Employment  Agreement will remain in full force
and effect for the benefit of the Employee and the  Company,  respectively,  and
are hereby incorporated as terms of this Separation Agreement. The Employee will
not be  excluded  from  coverage  under any  applicable  Company  Directors  and
Officers Insurance policy.

         6. PERSONAL COMPUTERS
            ------------------

            The  Company  acknowledges  and agrees  that the  Employee is hereby
given  custody  and  ownership  of  the  personal  computers  currently  in  his
possession.

         7. STOCK OWNERSHIP
            ---------------

            The  Employee  owns  54,000  shares of the  Company's  Common  Stock
described in Certificate  No.  SSN0198,  and 750 shares of the Company's  Common
Stock  described in Certificate  No. SSN0047.  The  restrictions  legend on said
certificates,  including a reference to a shareholder agreement, will be removed
and new certificates without restriction will be issued to the Employee no later
than thirty (30) days after the Effective Date.

         8. STOCK OPTIONS
            -------------

            The  Employee  shall  retain his  currently  vested  stock  options,
described  on  Table  One  appended  to this  Separation  Agreement,  and may be
exercised at any time until expiration on the first anniversary of the Effective
Date,  and  any  stock  option  agreement  to the  contrary  is  hereby  amended
accordingly.  The Company will issue an amended  stock  option  agreement to the
Employee within thirty (30) calendar days of the Effective Date.

         9. WARRANTS
            --------

            No later than three (3) months after the Effective Date, the Company
will  grant to the  Employee  a warrant to  purchase  250,000  shares of Company
common  stock  (the  "Warrant").  The  Warrant  shall  vest on the  first  (1st)
anniversary of the grant date and expire on the fourth (4th)  anniversary of the
grant date,  and shall have an exercise  price equal to the fair market value of
250,000 shares of Company common stock,  determined as of the grant date, but in
no event less than 40 cents per share.  The 250,000  shares will be subject to a
restriction  precluding  the Employee  from selling more than 20,000  shares per
day.  The  Company  will  include the shares  represented  by the Warrant in the
registration  statement  that  includes  the holders of  convertible  debentures
issued by the company in May, June and September  2003. The Company expects that
statement to be filed by December 31, 2003.

        10. STOCK SPLIT, ADJUSTMENTS
            ------------------------

            As of the date hereof, the Company is planning a recapitalization in
which the  number of it  authorized,  issued and  outstanding  shares of capital
stock will be reduced pursuant to a 1-for-6 reverse stock split. In the event of
such a reverse-split,  the options,  warrant,  shares,  prices, and restrictions
described in Sections 8 and 9 hereof shall be adjusted accordingly.



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<PAGE>

        11. COMPANY RELEASE
            ---------------

            Company releases and forever discharges the Employee of and from any
and all  actions  or causes  of  action,  suits,  claims,  charges,  complaints,
damages, liabilities,  obligations, promises and contracts whatsoever, in law or
equity, which the Company has, may have or has, had against Employee,  including
all unknown,  undisclosed and unanticipated  losses,  wrongs,  injuries,  debts,
claims or damages to the  Company,  or by reason of any  matter,  cause or thing
whatsoever,  which  Company  had,  now has, or shall have as of the date of this
Separation  Agreement,  EXCEPT that the release  set forth  herein  specifically
excludes: (i) claims of fraud, theft,  intentional  misrepresentation,  or other
intentional  misconduct by Employee causing harm to the Company: and (ii) claims
that Employee has breached the terms of this Separation  Agreement.  The Company
represents  that  it is not  currently  aware  of any  claims  described  in the
foregoing clause (i).

        12. RELEASE BY EMPLOYEE
            -------------------

            (a) In exchange for the monies,  benefits and promises  described in
Sections 2 through 6, hereof,  Employee  knowingly and voluntarily  releases and
forever  discharges  the Company and each of its  Representatives  (collectively
referred  to as the  "Company  Releasees")  of and from any and all  actions  or
causes of action,  suits, claims,  charges,  complaints,  damages,  liabilities,
obligations, promises and contracts whatsoever, in law or equity, which Employee
now has,  may have or has,  had  against the Company  Releasees,  including  all
unknown,  undisclosed and unanticipated losses, wrongs, injuries,  debts, claims
or damages to Employee,  for,  upon, or by reason of any matter,  cause or thing
whatsoever,  which  Employee  ever had, now has, or shall have as of the date of
this  Separation   Agreement   (provided  that  the  release  set  forth  herein
specifically  excludes  Employee's right to enforce the terms of this Separation
Agreement), including, but not limited to:

              (i) any and all matters  arising out of  Employee's  employment by
         the Company and the cessation of said  employment,  including,  but not
         limited  to,  any  claims  for  wages  salary,  bonuses,   commissions,
         incentive  pay,  stock  or  stock  options,  benefits,  severance  pay,
         vacation pay; or other compensation;

              (ii) any and all charges, claims or causes of action under federal
         law  arising  out of  Employee's  employment  by the  Company  and  the
         cessation  of said  employment,  including,  but not  limited  to,  any
         alleged  violation of the National Labor  Relations Act; any claims for
         discrimination  of any kind under Title VII of the Civil  Rights Act of
         1964, Sections 1981 through 1988 of Title 42 of the United States Code,
         and the Americans With  Disabilities Act of 1990; any alleged violation
         of the Employee  Retirement Income Security Act of 1974 (ERISA) (except
         for vested  benefits under any qualified  retirement plan which are not
         affected by this Separation  Agreement);  any alleged  violation of the
         Fair Labor  Standards  Act; any alleged  violation of the  Occupational
         Safety  and Health  Act;  any  alleged  violation  of the  Consolidated
         Omnibus  Budget  Reconciliation  Act of 1985  (COBRA);  and any alleged
         violation of the Federal Family and Medical Leave Act;



                                       4
<PAGE>

              (iii) any and all  charges,  claims  or  causes  of  action  under
         Connecticut  state law  arising  out of  Employee's  employment  by the
         Company  and the  cessation  of  said  employment,  including,  but not
         limited to, any alleged violation of Connecticut's  Equal Pay Law; Fair
         Employment   Practices  Act;  Human  Rights  and   Opportunities   Law;
         Occupational  Safety and Health Laws;  AIDS  Testing Law;  Reproductive
         Hazards Law; the Smokers  Rights Law; the Family and Medical Leave Law;
         the  Wage and Hour  Laws;  the  Political  Activities  provisions;  the
         Voting,  Military Service Leave, Jury and Witness Duty provisions;  the
         Smoking  and Drug  Testing  provisions;  the  Whistleblower  Protection
         provisions; and the Workers' Compensation provisions;

              (iv) any and all charges,  claims, or causes of action arising out
         of  Employee's  employment  by the  Company and the  cessation  of said
         employment  under the laws of any other  state or under the laws of any
         municipality or any other governmental authority;

              (v) any and all other  charges,  claims or causes of action  under
         any  other  federal,  state or  local  constitution,  law,  regulation,
         ordinance,  public  policy  or  common  law not  heretofore  mentioned,
         including,  but not  limited  to, all  claims  for  breach of  contract
         (whether  oral or  written,  express or  implied),  fraud,  negligence,
         estoppel, defamation, breach of duty of loyalty, breach of the covenant
         of good faith and fair dealing,  infliction  of emotional  distress and
         any other statutory or common law claim;

            (b) Since  Employee  is 40 years of age or older,  Employee is being
informed that  Employee has or may have specific  rights and/or claims under the
Age Discrimination in Employment Act of 1967 (ADEA) and Employee  represents and
agrees that:

              (i) in  consideration  for the amounts and  benefits  described in
         Sections 2 through 6 of this Agreement, which Employee is not otherwise
         entitled to receive,  Employee  specifically and voluntarily waives any
         and all rights  and/or  claims under the ADEA  Employee has or may have
         against the Company  Releasees to the extent such rights  and/or claims
         arose prior to or on the date this Agreement was executed;

              (ii)  Employee  understands  that rights or claims  under the ADEA
         which may  arise  after the date this  Agreement  is  executed  are not
         waived by Employee;

              (iii)  Employee is advised to consider the terms of this Agreement
         carefully  and  consult  with  or  seek  advice  from  an  attorney  of
         Employee's  choice or any other person of Employee's  choosing prior to
         executing this Agreement;

              (iv) Employee was informed and understands that Employee had up to
         twenty-one (21) days, if Employee wished, within which to consider this
         Agreement;

              (v) Employee has carefully read and fully  understands  all of the
         provisions of this  Agreement,  and Employee  knowingly and voluntarily
         agrees to all of the terms set forth in this Agreement; and

              (vi) in entering  into this  Agreement  Employee is not relying on
         any  representation,  promise or inducement  made by the Company or its
         attorneys  with the  exception  of  those  promises  described  in this
         document.



                                       5
<PAGE>

        13. GOVERNING LAW; SEVERABILITY OF PROVISIONS
            -----------------------------------------

            This Separation Agreement shall be interpreted under the laws of the
State of Connecticut without giving effect to the principles of conflicts of law
of such state. Its language shall be construed as a whole, according to its fair
meaning,  and not strictly for or against either party.  Should any provision of
this Separation  Agreement be declared  illegal or unenforceable by any court of
competent jurisdiction and cannot be modified to be enforceable,  such provision
shall be stricken and the remaining terms of this Agreement shall be enforced so
as to  give  effect  to the  intention  of the  parties  to the  maximum  extent
possible.  However,  if as a result of any action  initiated  by  Employee,  any
portion of the release and waiver  language  contained in Section 14 is ruled to
be unenforceable for any reason,  Employee shall return the  consideration  paid
hereunder to the Company.

        14. NO ADMISSION OF LIABILITY
            -------------------------

            Each party hereto agrees that neither this Separation  Agreement nor
the furnishing of the consideration  relating to it shall be deemed or construed
at any  time  for any  purpose  as an  admission  by any of them or any of their
respective  representatives  of any liability or unlawful or improper conduct of
any kind.

        15. NO ORAL AMENDMENTS OF AGREEMENT
            -------------------------------

            This  Separation  Agreement may not be modified,  altered or changed
except upon express written consent of both parties wherein  specific  reference
is made to this Separation Agreement.

        16. ENTIRE AGREEMENT
            ----------------

            This Separation  Agreement sets forth the entire  agreement  between
the parties hereto,  and fully supersedes any prior agreements or understandings
entered  into with the  Employee  prior to the date  hereof  (which  are  hereby
terminated  and of no  further  force or  effect) In  deciding  to execute  this
Separation Agreement, Employee has not relied on any statement or representation
by any of the parties hereto or any of their respective  representatives that is
not set forth in this document.  In the event of the Employee's death during the
period of this  Agreement's  performance,  all  obligations  of the parties' set
forth in Sections 2, 3, and 4 above, shall be accelerated to the date of death.

        17. EFFECTIVE DATE OF THE SEPARATION AGREEMENT
            ------------------------------------------

            After signing this Separation Agreement,  Employee may revoke it for
a period of seven days  following  said  execution.  The Agreement  shall become
effective  and  enforceable  as of the date on which  the  aforesaid  revocation
period  expires (such date,  the  "Effective  Date").  Such  revocation  must be
personally  delivered  to the  Company or mailed to the  Company and post marked
within seven days of execution of this Separation Agreement.

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<PAGE>

        18. NOTICES
            -------

            Any  Notices or other  papers  required  to be sent  pursuant to the
terms  of this  Agreement  shall  be  sent by  certified  mail,  return  receipt
requested, to

Mario F. Rossi                               SmartServ Online, Inc. (Att'n: CEO)
                                             2250 Butler Turnpike
                                             Suite 150
                                             Plymouth Meeting, PA 19462

with a copy to:                              with a copy to:

Michael N. LaVelle, Esq.                     Martin L. McCann, Esq.
Pullman & Comley                             Zeldes, Needle & Cooper
850 Main Street                              1000 Lafayette Boulevard
Bridgeport, CT  06601-7006                   Bridgeport, CT  06601-1740

        19. COUNTERPARTS; FACSIMILE SIGNATURES. This  Agreement may  be executed
in two or more  counterparts,  each of which shall be deemed an original but all
of which together shall constitute one and the same  instrument.  This Agreement
may be executed and delivered by facsimile.

                             [intentionally omitted]



                                       7
<PAGE>


THE PARTIES HAVE READ AND FULLY  CONSIDERED  THIS  SEPARATION  AGREEMENT AND ARE
MUTUALLY  DESIROUS  OF  ENTERING  INTO  SUCH  SEPARATION   AGREEMENT.   EMPLOYEE
UNDERSTANDS  THAT THIS  DOCUMENT  SETTLES,  BARS AND  WAIVES  ANY AND ALL CLAIMS
EMPLOYEE HAD OR MIGHT HAVE AGAINST THE COMPANY AND ITS REPRESENTATIVES. EMPLOYEE
AND COMPANY  ACKNOWLEDGE  THAT NEITHER IS RELYING ON ANY OTHER  REPRESENTATIONS,
WRITTEN OR ORAL, NOT SET FORTH IN THIS DOCUMENT.  HAVING ELECTED TO EXECUTE THIS
SEPARATION  AGREEMENT,  TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE
THEREBY THE SUMS AND BENEFITS SET FORTH ABOVE,  THE COMPANY AND EMPLOYEE  FREELY
AND  KNOWINGLY,  AND  AFTER  DUE  CONSIDERATION,   ENTER  INTO  THIS  SEPARATION
AGREEMENT.

         THEREFORE, the parties to this Separation Agreement now voluntarily and
knowingly execute this Agreement.

Date ________________________           ________________________________________
                                        Mario F. Rossi




                                        SMARTSERV ONLINE, INC.


Date ________________________           By:_____________________________________
                                           Name:
                                           Title:



                                       8
<PAGE>



                  IF YOU DO NOT WISH TO USE THE 21-DAY PERIOD,
                  --------------------------------------------
                 PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT
                 ----------------------------------------------

         The  undersigned   employee   acknowledges  that  I  was  informed  and
understand  that  I have  21  days  within  which  to  consider  the  Separation
Agreement,  have been advised of my right to consult with an attorney  regarding
such agreement and have considered  carefully every provision of such agreement,
and that after having engaged in those  actions,  I prefer to and have requested
that I enter into the Separation Agreement prior to the expiration of the 21-day
period.

Dated: _________________________             ______________________________
                                             (EMPLOYEE)

Dated: _________________________             ______________________________
                                             Witness:





                                       9
<PAGE>


                                    TABLE ONE
                                EXISTING OPTIONS


                             EXERCISE PRICE       SHARES     EXPIRATION DATE
--------------------------------------------------------------------------------
                                 $1.2900          25,250        10/08/08
OPTIONS TO PURCHASE              $1.6250          17,000        11/20/08
   COMMON STOCK                  $0.0938          15,000        10/12/04
                                 $1.4200           7,000        05/29/10
                                 $1.4200          18,750        11/02/10
                                 $1.4200          56,250        11/02/10
--------------------------------------------------------------------------------

THE COMPANY WILL ISSUE NEW  CERTIFICATES  WITHIN  THIRTY (30) CALENDAR DAYS FROM
THE SEPARATION DATE.





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