Document:

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                                                                   Exhibit 10.08

               ROOMSYSTEMS, INC. SHAREHOLDERS' AGREEMENT AND PROXY

     This Shareholders' Agreement and Proxy ("Agreement") is entered into as of
August 17, 1999, by and among Ash Capital, LLC ("Ash"), RoomSystems, Inc. (the
"Company"); Steven Sunyich, individually, as trustee of the McCagno Family IRR
Trust and the WRS Family Trust, and as general partner of the following limited
partnerships: Sunyich family LTD Partnership, Riggs Family Limited Partnership,
Kelly Family LTD Partnership, and SBD Partnership; Joy Sunyich; William R.
Shupe, individually, as trustee for the Sunyich Family IRR Trust, the Toleman
Family Trust, the DM Trust and the Kelley Family Trust, and as general partner
of the Riggs Family Limited Partnership and SBD Partnership; Derek K. Ellis
individually and as general partner of SBD Partnership Tryon Marietta, LLC,
Gregg Hrncir, manager of Brynwood, LLC, and Steven Moulton (all parties except
Ash and the Company shall be together referred to herein as the "Shareholders").

                                    RECITALS:

     WHEREAS, as a material inducement to enter into that certain Subscription
Agreement between Ash and the Company of even date herewith related to the
purchase by Ash of Series B. Preferred Stock issued by the Company, (which
Subscription Agreement together with all ancillary agreements entered into
simultaneously therewith shall be referred to herein as the "Subscription
Agreement"), and the purchase of Series B Preferred Stock thereunder, the
Shareholders, which presently hold more than 50% of the outstanding capital
stock of the Company on a fully-diluted basis, desire to enter into this
Shareholders' Agreement and Proxy with Ash and the Company, intending that such
shall be binding upon the Shareholders and upon the partners, shareholders,
officers, directors or trustees of the Shareholders who may receive distribution
of Company stock from the Shareholders.

     WHEREAS, each of the Shareholders desires to enter into this Shareholders'
Agreement and Proxy as set forth herein in order to elect a representative of
Ash as a member of the Company's board of directors, to elect a majority of the
board who are outside directors, to provide for certain first offer and co-sale
rights to Ash, and to vote in favor of a reverse split of the common (but not
the Series B Preferred) shares of the Company.

     NOW, THEREFORE, in consideration of the foregoing recitals which are
incorporated herein by this reference, and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

1.   Agreement to Vote and Proxy.

         1.1 Share Voting. Each of the Shareholders agrees to cause all voting
     securities in the Company now held or hereafter acquired by such
     Shareholders (the "Voting Shares") to be voted:

              1.1.1 for the election of one nominee of Ash to serve as a
         director on the company's board of directors, which initially Ash
         agrees shall be Alan C. Ashton,

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         such that Ash shall have its designated representative elected to the
         Company's board of directors ("Ash Representative"). Eash of the
         Shareholders hereby grants a proxy, coupled with an interest, to Ash,
         or such substitute as Ash may appoint (the "Proxy Holder"). This
         irrevocable proxy is given by the Shareholders to the Proxy Holder to
         nominate the Ash Representative and vote the Voting Shares to elect the
         Ash Representative to the Company's board of directors:

              1.1.2 to maintain the size of the board at five (5) members, a
         majority of whom shall at all times consist of individuals who are not
         employees or paid consultants of the Company; and

              1.1.3 in favor of a 2 to 1 reverse split of the common (but not
         the Series B Preferred) shares of the Company.

         1.2 Vacancy. If the Ash Representative should cease to serve on the
     Company's board of directors for any reason, including but not limited to
     removal by the Shareholders, Ash will be entitled to nominate and elect a
     new Ash Representative to the Company's board of directors. Ash shall have
     the right to direct the removal of the Ash Representative by the
     Shareholders, with or without cause, at any time in its sole discretion.
     The parties acknowledge that Ash shall have the sole authority to nominate
     the successor to the Ash Representative, except as otherwise specifically
     provided in Section 1.4 with respect to the conditional nomination rights
     of the Shareholders.

         1.3 Reservation of Rights. All other voting rights and powers of the
     Shareholders with respect to such Voting Shares, specifically including the
     election of members of the board other than the Ash Representative (subject
     to the provisions of paragraph 1.1.2 above), the right to vote, assent, or
     consent with respect thereto and to take part in and to consent to any
     corporate or shareholder's action of any kind whatsoever, and to receive
     distributions with respect to said Voting Shares, are expressly reserved to
     the Shareholders separately.

         1.4 Designation of Nominees. In any election of directors of the
     Company, the Proxy Holder shall vote all of the Voting Shares in favor of
     the Ash Representative. Ash agrees that it will select the Ash
     Representative for election to the Company's board of directors, (1) within
     thirty (30) days after receiving notice from the Company that the Company
     wishes to select nominees for the board of directors for the Company's next
     annual shareholders meeting, (2) within five (5) days after receiving
     notice from the Company of a special meeting of shareholders or notice of a
     meeting of the board of directors convened for the purpose of filling a
     seat or seats on the board of directors vacated by an Ash Representative,
     or (3) within five (5) days after receiving notice and a copy of a
     shareholder action by written consent, without a meeting, to elect
     directors or to fill a vacancy on the board of directors. In the event Ash
     should fail to make a selection of the Ash Representative in the time
     period specified above, the seat left open by such failure to timely make a
     selection shall be filled by a nomination and election by the Shareholders
     conducted in accordance with the ordinary election procedures of the

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     Company, without prejudice to Ash's right to nominate and elect future
     representatives to the Company's board of directors.

         1.5 Legend. Any Voting Shares, whether now held or hereafter acquired
     by any of the Shareholders, if sold or otherwise transferred by any of them
     during the term of this Agreement, will continue to be subject to the terms
     hereof, and it will be a condition of any such transfer that the
     transferring shareholder obtains from such transferee(s) a consent to be
     bound by the terms hereof. To effectuate this provision, each certificate
     representing the Voting Shares now held or hereafter acquired by any
     Shareholder will bear the following legend:

         THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VOTING
    RESTRICTIONS AND AN IRREVOCABLE PROXY CONTAINED IN THE ROOMSYSTEMS, INC.
    SHAREHOLDERS' AGREEMENT AND PROXY DATED AUGUST 17, 1999, A COPY OF WHICH
    AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
    ROOMSYSTEMS, INC.

         1.6 Injunctive Relief. Each Shareholder acknowledges and agrees that
     any breach of this Agreement by any of them will cause irreparable harm to
     the other parties hereto that may not be adequately compensated by money
     damages. Accordingly, in the event of a breach or threatened breach by the
     Proxy Holder or by any Shareholder of any provision of this Agreement, the
     other party or parties will be entitled to injunctive or other preliminary
     or equitable relief, including the right to compel the Proxy Holder or any
     Shareholder to vote shares in accordance with the provisions of this
     Agreement, in addition to such other remedies as may be available for any
     such breach or threatened breach, including but not limited to, the
     recovery of damages.

        The Shareholders further agree that, notwithstanding any failure of the
proxy given in paragraph 1 above, they will each jointly and severally be bound
to vote any Voting Shares of the Company in accordance with the provisions of
paragraph 1 hereof, except as otherwise expressly permitted by this Agreement;
and further that they will take no actions and will not enter any agreements
inconsistent with or that conflict with the provisions of this Agreement or
their obligations hereunder.

2.   Certain Defined Terms. As used in this Agreement, the following terms shall
have the respective meanings:

         2.1 "Shareholders Stock" shall mean and include all shares of Common
     Stock, Series A Preferred Stock, Series B Preferred Stock, and all other
     securities of the Company which may be exercised, converted into or issued
     in exchange for, or in respect of, shares of Common Stock (whether by way
     of stock split, stock dividend, combination, conversion, reclassification,
     reorganization, or any other means) now owned by the Shareholders or its
     assignees or as may be distributed to persons holding ownership interests
     in any Shareholder.

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         2.2 A "Selling Holder" shall mean the Shareholders, or any assignee
     thereof desiring to sell shares of Shareholders Stock.

         2.3 "Shares" shall mean and include all shares of the Shareholders
     Stock to be sold by a Selling Holder.

3.   Right of First Offer on Dispositions by the Shareholders and its Assignees.

     3.1 First Offer.

         (a) The Selling Holder shall, prior to any proposed sale, transfer, or
     conveyance of any of its Shares, offer to Ash by written notice the right
     to purchase such Shares (the "Offered Shares") for cash at an amount equal
     to the price or other consideration for which such Shares are to be offered
     (the "First Offer"). If the consideration for such proposed sale was other
     than cash, the cash equivalent of such non-cash consideration shall be
     determined by the Company's Board of Directors in good faith. The Selling
     Holder's written notice to Ash shall describe the Offered Shares and
     specify the number, price, payment terms for the Offered Shares, a true and
     complete copy of any offer and all other material terms and conditions of
     the transfer.

         (b) Ash may elect to purchase all of the Offered Shares or any lesser
     number by written notice thereof given by it to the Selling Holder within
     thirty (30) days delivery of the First Offer (the " Initial First Offer
     Period").

         3.2 Election to Purchase. If Ash elects to purchase all or any part of
     the Offered Shares pursuant to Section 3.1 hereof, the written notice
     provided to the Selling Holder shall set forth the number of Offered Shares
     Ash desires to purchase and shall be given to the Selling Holder in
     accordance with Section 7.5 below within the Initial or Second First Offer
     Period, as applicable. Such communication shall, when taken in conjunction
     with the First Offer, be deemed to constitute a valid, legally binding and
     enforceable agreement for the sale and purchase of such Offered Shares.
     Sales of the Offered Shares pursuant to this Section 3 shall be made at the
     offices of the Company the forty-fifth (45th) day following the date the
     First Offer was made (or if any such forty-fifth (45th) day is not a
     business day, then on the next succeeding business day). Such sales shall
     be effected by the Selling Holder's delivery to Ash electing to purchase
     Offered Shares of a certificate or certificates evidencing the Offered
     Shares to be purchased by it, duly endorsed for transfer to Ash against
     payment to the Selling Holder of the purchase price therefor by Ash.

         3.3 Sale Upon Failure to Purchase. If Ash does not purchase all of the
     Offered Shares, the Offered Shares not so purchased may be sold by the
     Selling Holder at any time within one hundred twenty (120) days after the
     date the First Offer was made, subject to the provisions of Section 4. Any
     such sale shall be at a price and upon terms and conditions not more
     favorable to the purchaser than those specified in the First Offer. Any
     Offered Shares not sold within such one hundred twenty (120)-day period
     shall continue to be subject to the requirements of this Section 3. If
     Offered Shares are sold

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     pursuant to this Section 3 to a purchaser who is not a party to this
     Agreement, the Offered Shares so sold shall no longer be subject to this
     Agreement.

4.   Right of Partici pation in Sales.

         4.1 Co-Sale Rights. If at any such time a Selling Holder desires to
     sell, assign, transfer, or otherwise convey Shares owned by such holder to
     any person or entity other than Ash (the "Buyer") after complying with the
     requirements of Section 3 hereof, such Selling Holder shall provide written
     notice to Ash, in accordance with Section 7.5 hereof, setting forth the
     name of the Buyer, the aggregate number of Shares desired to be sold (the
     "Co-Sale Securities") and the terms and conditions for the sale (the
     "Co-Sale Offer"). As a condition to the sale of any Co-Sale Securities by
     the Selling Holder, Ash shall have the right to participate in the Co-Sale
     Offer, at the same price per share and on the same terms and conditions as
     set forth in the Co-Sale Offer, that portion of the Co-Sale Securities
     equal to the product obtained by multiplying (i) the aggregate number of
     Co-Sale Securities to be offered, by (ii) twenty-five percent (25%).

         4.2 Notice of Participation. Ash wishing to so participate in any sale
     under this Section 4 shall notify the Company and selling Holder in writing
     of such intention as soon as practicable after Ash' receipt of the Co-Sale
     Offer made pursuant to Section 4.1. and in any event within twenty (20)
     days after the date the Co-Sale Offer was made. Such notification shall be
     given to such Shareholders in accordance with Section 7.5 below.

         4.3 Terms of Co-Sale. The Selling Holder and Ash shall sell to the
     Buyer all, or at the option of the Buyer, any part of the Co-Sale
     Securities proposed to be sold by them at the price and upon other terms
     and conditions not more favorable to the Buyer than those in the Co-Sale
     Offer provided by the Selling Holder under Section 4.1 above; provided,
     however, that any purchase of less than all of such Shares by the Buyer
     shall be made from the Selling Holder and Ash pro rata based upon the
     relative amount of the Shares that the Selling Holder and Ash are otherwise
     entitled to sell pursuant to Section

         4.4 Co-Sale Shares Released. Any Shares sold pursuant to this Section 4
     shall no longer be the subject to this Agreement.

5.   Permitted Transfers

         5.1 Certain Transactions. Sections 3 and 4 of this Agreement shall not
     apply to any transfer or disposition of Shares described in this Section
     5.1, provided, however, that any transferee shall receive and hold such
     Shares subject in all respects to the provisions of this Agreement, and
     that there shall be no further transfer of such Shares except in accordance
     herewith.

              (a) A Selling Holder shall be permitted to sell, assign, transfer,
     or otherwise convey Shares to such Selling Holder's spouse, parents, or
     children, or other members of the founder's family (including relatives by
     marriage), or to a custodian,

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     trustee, or other fiduciary for the account of the Selling Holder or
     members of his family in connection with a bona fide estate planning
     transaction or estate administration;

              (b) A Selling Holder shall be permitted to sell, assign, transfer,
     or otherwise convey Shares when such disposition, combined with all prior
     sales, assignments, transfers, or other conveyances of such Selling Holder
     that occurred in the same calendar year, amounts to less than 10,000
     Shares.

              (c) The provisions shall not apply to transfers by operation of
     law.

6.   Prohibited Transfers

         6.1 Prohibited Transfer. In the event a Selling Holder sells any Shares
     of the Company in contravention of the participation rights of Ash under
     paragraph 4 of this Agreement (a "Prohibited Transfer"), Ash, in addition
     to such other remedies as may be available at law, in equity or hereunder,
     shall have the put option provided below, and the Selling Holder shall be
     bound by the applicable provisions of such put option.

         6.2 Put Option. In the event of a Prohibited Transfer by a Selling
     Holder, Ash shall have the right to sell to such Selling Holder, and, if
     such right is exercised, such Selling Holder shall have the obligation to
     purchase from Ash a number of shares of common stock (including preferred
     stock convertible into common stock) equal to the number of shares Ash
     would have been entitled to transfer to the Buyer in the Prohibited
     Transfer pursuant to the terms hereof. Such sale shall be made on the
     following terms and conditions:

              (a) The price per share at which the shares are to be sold to such
         Selling Holder shall be equal to the price per share paid by Buyer to
         such Selling Holder in the Prohibited Transfer. Such Selling Holder
         shall also reimburse Ash for any and all fees and expenses, including
         legal fees and expenses, promptly following demand therefor, incurred
         pursuant to the exercise or the attempted exercise of Ash's rights
         under this Section.

              (b) Within 20 days after the later of the dates on which Ash (i)
         received notice from such Selling Holder of the Prohibited Transfer, or
         (ii) otherwise become aware of the Prohibited Transfer, Ash shall, if
         exercising the put option created hereby, deliver to such Selling
         Holder the certificate or certificates representing shares to be sold,
         each certificate to be properly endorsed for transfer.

              (c) Such Selling Holder shall, upon receipt of the certificate or
         certificates for the shares to be sold by Ash, immediately pay the
         aggregate purchase price thereof and the amount of reimbursable fees
         and expense, as specified above, by certified check or bank draft made
         payable to the order of Ash.

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        Notwithstanding the foregoing, any attempt to transfer shares of the
Company in violation hereof shall be void and the Company agrees it will not
effect such a transfer nor will it treat any alleged transferee as the holder of
such shares.

7.   Miscellaneous

     7.1 Term. This Agreement shall terminate (a) immediately prior to the
consummation of the first firm commitment underwritten public offering of not
less than $12,000,000 in gross proceeds pursuant to any effective registration
statement on Form S-1 (or its then equivalent) under the Securities Act of 1933,
as amended, or (b) the tenth anniversary of the date of this Agreement,
whichever occurs first.

     7.2 Failure to Deliver Shares. If any party becomes obligated to sell any
shares to another party under this Agreement and fails to deliver such shares in
accordance with the terms of this Agreement, the non-selling party may, at its
option in addition to all other remedies it may have, send to such other party
the purchase price for such share as is herein specified. Thereupon, the
Company, upon written notice to the party who failed to deliver the shares, (a)
shall cancel on its books the certificate or certificates representing the
shares to be sold, and (b) shall issue, in lieu thereof, in the name of the
non-selling party, a new certificate or certificates representing such shares,
and thereupon all of the selling party's rights in and to such shares shall
terminate.

     7.3 Specific Enforcement. The parties hereto expressly agree that they will
be irreparably damaged if this Agreement is not specifically enforced. Upon a
breach or threatened breach of the terms, covenants and/or conditions of this
Agreement by any party, the non-selling or non-defaulting party shall, in
addition to all other remedies, be entitled to a temporary or permanent
injunction, without showing any actual damage, and/or a decree for specific
performance, in accordance with the provisions hereof.

     7.4 Legend. Each certificate evidencing any of the Shareholders Stock shall
bear the legends substantially as follows (and within a reasonable time from the
execution of this Agreement, each such holder shall submit their certificate(s)
to the Company for the placement of the following legends, if necessary):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.

THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THAT CERTAIN
ROOMSYSTEMS, INC. SHAREHOLDERS' AGREEMENT AND PROXY, DATED AS OF AUGUST 17,
1999, A COPY OF WHICH IS AVAILABLE FOR

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INSPECTION AT THE GENERAL OFFICES OF ROOMSYSTEMS, INC. CONTAINING RIGHTS OF
FIRST REFUSAL AND CO-SALE RIGHTS. NONE OF THE SHARES EVIDENCED HEREBY OR BY ANY
SUBSEQUENT CERTIFICATE MAY BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED
OF EXCEPT IN STRICT COMPLIANCE WITH THE TERMS AND CONDITIONS OF SUCH
SHAREHOLDERS' AGREEMENT AND PROXY. ROOMSYSTEMS, INC. WILL NOT REGISTER THE
TRANSFER OF THE WITHIN SECURITIES ON ITS CORPORATE RECORDS NOR WIILL IT TREAT
ANY PURPORTED TRANSFEREES AS THE HOLDER THEREOF WITHOUT THE PRIOR WRITTEN
CONSENT OF THOSE PERSONS IDENTIFIED IN SUCH AGREEMENT.

     7.5 Notices. Notices given hereunder shall be deemed to have been duly
given on the date of personal delivery, on the date of postmark if mailed by
certified or registered mail, return receipt requested, or on the date sent by
telecopier or telex to the party being notified at his or its address specified
on the applicable signature page hereto or such other address as the addressee
may subsequently notify the other parties of in writing.

     7.6 Entire Agreement and Amendments. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and neither
this Agreement nor any provision hereof may be waived, modified, amended or
terminated except by a written agreement signed by (a) the Company, (b)
Shareholders or Selling Holders holding more than 50% of the Shareholders Stock,
and (c) Ash. To the extent any term or other provision of any other indenture,
agreement, or instrument by which any party hereto is bound conflicts with this
Agreement, this Agreement shall have precedence over such conflicting term or
provision.

     7.7 Governing Law; Successors and Assigns. This Agreement shall be governed
by the laws of Utah and shall be binding upon the heirs, personal
representatives, executors, administrators, successors, and assigns of the
parties.

     7.8 Waivers. No waiver of any breach or default hereunder shall be
considered valid unless writing, and no such waiver shall be deemed a waiver of
any subsequent breach or default of the same or similar nature.

     7.9 Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity, or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid, or unenforceable provision were not contained herein.

     7.10 Captions. Captions are for convenience only and are not deemed to be
part of this Agreement.

     7.11 Counterparts. 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.

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         IN WITNESS WHEREOF, each of the parties has executed or caused this
Shareholders' Agreement and Proxy to be executed by its duly authorized
representative, as of the day and year first above written.

                                ASH CAPITAL, LLC
                                By Providence Management, LLC

                                By /s/ James C. Savas
                                ----------------------------------------
                                James C. Savas or Dave Harkness, Managers

                                ROOMSYSTEMS, INC.

                                By  /s/ Steven L. Sunyich
                                ------------------------------------------
                                Steven L. Sunyich, Chief Executive Officer

                                SHAREHOLDERS

                                /s/ Steven L. Sunyich
                                ---------------------
                                Steven L. Sunyich, Individually, as
                                trustee of The McCagno Family IRR
                                Trust and the WRS Family Trust, and as
                                general partner of the following
                                limited partnerships: Sunyich Family
                                LTD Partnership, Riggs Family Limited
                                Partnership, Kelly Family LTD
                                Partnership, and SBD Partnership

                                Tryon Marietta, LLC

                                -------------------
                                By:                 , Manager
                                    ----------------

                                /s/ William R. Shupe
                                --------------------
                                William R. Shupe, Individually, as
                                trustee for the Sunyich Family IRR
                                Trust, the Toleman Family Trust, the
                                DM Trust and as general partner of the
                                Riggs Family Limited Partnership and
                                SBD Partnership

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                                /s/ Derek K. Ellis
                                ------------------
                                Derek K. Ellis, Individually and as general
                                partner of the SBD Partnership

                                /s/ K. Joy Sunyich
                                ------------------
                                Joy Sunyich

                                /s/ Gregory L. Hrncir
                                ---------------------
                                Gregg Hrncir, Manager of Brynwood, LLC

                                /s/ Steven A. Moulton
                                ----------------------
                                Steven Moulton<PAGE>

                                                                   Exhibit 10.09

                           AGREEMENT OF UNDERSTANDING

     "THIS AGREEMENT OF UNDERSTANDING" (this "Agreement") made as of the 17th
day of August 1999, by and between Ash Capital, LLC ("Ash Capital") and
RoomSystems, Inc., a Nevada corporation (the "Corporation").

                                R E C I T A L S :

     WHEREAS, pursuant to that certain "Private Placement Memorandum" (the
"Memorandum"), dated May 24, 1999, the Corporation has offered certain of its
Series B Preferred Shares (the "Preferred Shares") for sale, privately; and

     WHEREAS, Ash Capital desires to purchase with a small group of investors
(referred to herein sometimes as the "Investment Syndicate") up to one million
(1,000,000) of the Preferred Shares according to the terms and conditions set
forth in the Memorandum (the "Ash Capital Investment"); and

     WHEREAS, the Corporation has offered a seat on its Board of Directors to
Alan Ashton, an affiliate of Ash Capital and as an inducement to him, the
Corporation has offered certain options to Ash Capital to purchase its common
stock (the "Options"); and

     WHEREAS, Ash Capital requires, preparatory to completing the Ash Capital
Investment, that the Corporation memorialize certain covenants outlined in the
Memorandum relating to the future reverse split of the Corporation's common
stock and the protection of the conversion price of the Preferred Shares at the
time the Corporation completes an Initial Public Offering (the "IPO"); and

     WHEREAS, the parties intend to set forth herein the terms and conditions
relating to the Ash Capital Investment.

     NOW, THEREFORE, in consideration of the monetary consideration herein
recited, the mutual promises herein contained and subject to the fulfillment of
the conditions herein set forth, the parties hereby agree as follows:

     1. The Memorandum. The Memorandum sets forth the essential disclosures,
terms, and conditions relating to and describing an investment in the Preferred
Shares. The Corporation has delivered a copy of the Memorandum to Ash Capital
for review; and has delivered attendant thereto a copy of the "Subscription
Agreement" (the "Subscription Agreement"), which must be completed, executed and
delivered to the Corporation, as described in the Memorandum, by all investors
in the Preferred Shares. A copy of the Subscription Agreement is attached hereto
as Exhibit "A." The Corporation has also delivered to Ash Capital a copy of its
financial statements and projections.

     2. Reverse Split of the Corporation's Shares of Common Stock. The
Corporation has disclosed to Ash Capital and to all investors in the Preferred
Shares, that it may effect a reverse split of its shares of common stock prior
to the IPO (the "Reverse"). The Memorandum warrants and guarantees that the
Preferred Shares are not subject to the Reverse.

<PAGE>

As described in the Memorandum, the Preferred Shares convert into common shares
of the Corporation at the time of the IPO (the "Converted Shares"). The
Converted Shares shall not be subject to the Reverse.

     3. Price Protection of the Converted Shares. The Converted Shares shall be
issued at the time of the IPO and shall not be subject to the Reverse. The
Converted Shares shall automatically convert into the Corporation's common
shares at the time of the IPO at the exercise price of the lesser of $3.00 or
fifty percent (50%) of the initial IPO price per share with such other terms as
are specifically set forth on the Certificate of Designation for the Preferred
Shares, a copy of which is attached as Exhibit "B," and which the Corporation
covenants will be filed with the Nevada Secretary of State prior to breaking
escrow pursuant to the Escrow Agreement described hereinafter.

     4. Seat on the Corporation's Board of Directors. Upon the completion of the
Ash Capital Investment and the Closing, Ash Capital shall be entitled to one (1)
seat on the Corporation's board of directors (the "Board"). It is anticipated
that Mr. Alan Ashton shall be Ash Capital's initial designee to the Board and
shall first be named to the board after the Corporation obtains satisfactory
errors and omissions/director liability insurance and executes the
Indemnification Agreement in the form attached hereto as Exhibit "C." If
approved by the Corporation's shareholders, Mr. Ashton shall serve until such
time as he designates a replacement member to the Board from Ash Capital. The
Corporation shall execute and faithfully perform the Shareholders' Agreement and
Proxy in the form attached hereto as Exhibit "D."

         A. Shares and Options. In order to induce Alan Ashton to serve on the
Board, the Corporation agrees to deliver to Alan Ashton options to purchase
certain of its shares of common stock as follows: ninety-three thousand seven
hundred fifty (93,750) shares of its common stock at the exercise price of $3.60
per share, according to the terms and conditions described in the form set forth
on Exhibit "E-1," attached hereto for the first year of his tenure on the Board:
and seventy-five thousand (75,000) shares of its common stock at the exercise
price of $6.60 per share, according to terms and conditions described in the
form attached hereto as Exhibit "E-2," if Mr. Ashton or his designee serves an
additional year.

     5. Ash Capital Investment Formula. The Memorandum describes a maximum
cumulative investment of $4,000.00 (the "Maximum Investment"). The Corporation
has amended the Memorandum to expand the Maximum Investment thereunder to
$8,000.00. The Ash Capital Investment percentage shall be calculated as follows:
The amount actually invested under the Memorandum by Ash Capital divided by
$3.00. This identifies the number of Preferred Shares actually purchased. If the
Maximum Investment is achieved, the percentage of shares held by Ash Capital
pursuant to the Ash Capital Investment shall be multiplied against the total
number of the Corporation's shares (common and preferred) then outstanding. For
example, if the Reverse is ultimately a two-for-one reverse, the total number of
shares outstanding would be approximately 4,138,270 (number of shares of common
and preferred stock outstanding subsequent to the Reverse, as more fully
described on Exhibit "F," attached hereto). This number added to 2,000,000 (the
total number of the Preferred Shares if the Maximum Investment is subscribed)
would equal the total number of shares of the Corporation's common and preferred
stock then outstanding. If the Corporation oversubscribes the Maximum

                                       2
<PAGE>

Investment, Ash Capital's percentage ownership in the Corporation shall be
reduced accordingly. The percentage ownership held by Ash Capital upon breaking
of escrow shall be not less than the amount shown on Exhibit "F," unless such is
a result solely of over-subscriptions.

     6. Consulting Agreement. The Corporation shall execute and faithfully
perform the Consulting Agreement with Providence Management, LLC in the form
attached hereto as Exhibit "G."

     7. Escrow Agreement. The Corporation shall execute and faithfully perform
the Escrow Agreement with Ash Capital and U.S. Bank National Association
("Escrow Agent") in the form attached hereto as Exhibit "H." This Agreement and
all Exhibits hereto shall be delivered to the Escrow Agent, to be held and dealt
with by the Escrow Agent as set forth therein. Similar agreements shall be
executed in favor of each member of the Investment Syndicate as described below
in paragraph 9A.

     8. Registration Rights Agreement. The Corporation shall execute and
faithfully perform the Registration Rights Agreement with Ash Capital and other
members of the Investment Syndicate as described below in paragraph 9A in the
form attached hereto as Exhibit "I."

     9. Closing. It is anticipated that this Agreement and the Subscription
Agreement will be completed and executed prior to August 18, 1999; and the Ash
Capital Investment will be tendered to the escrow described hereinabove as soon
as possible thereafter (the "Closing"). At the time of the execution of this
Agreement including Exhibits and the delivery thereof to the Escrow Agent, such
shall be held and dealt with by the Escrow Agent pursuant to the terms of the
Escrow Agreement.

         A. Separate Closing. The parties agree that the Closing for Ash
Capital, relative to the Ash Capital Investment may be earlier than the Closing
for the remaining members of the Investment Syndicate and that all of the terms,
conditions, representations and warranties herein (including Exhibits) shall
apply fully to, and be for the benefit of, such persons and entities, even
though not a party hereto, the parties intending that such persons shall be
third party beneficiaries hereof. Such Investment Syndicate may consist of the
following persons or entities or their affiliates: SKM Investments, LLC, a Utah
limited liability company, Cherokee & Walker, LLC, Birchbrook, LLC, and any
other entities introduced to the Corporation by Ash Capital or its affiliates.

     10. Conduct of the Corporation's Business Pending the Closing: The
Corporation agrees that, pending the Closing, the business of the Corporation
shall be conducted only in the ordinary and usual course and substantially in
accordance with its prior business practices.

     11. Miscellaneous Provisions. The following miscellaneous provisions are an
integral part of this Agreement:

         A. Survival of Representations and Warranties. The respective
obligations of Purchaser and Seller hereunder and all representations and
warranties made in this Agreement, all Exhibits hereto, the Memorandum and all
certificates and documents delivered pursuant to hereto shall survive the
Closing.
                                       3
<PAGE>

         B. Attorneys' Fees. In the event suit is brought to enforce the
provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs incurred in connection therewith.

         C. Entire Agreement. This Agreement and the Exhibits hereto constitute
the entire agreement between the parties with respect to the matters covered
herein and supercedes any prior agreements or negotiations with respect to the
same. This Agreement is binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns.

         D. Amendments Only in Writing. This Agreement may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.

         E. Notices. All notices provided for herein shall be in writing and
shall be given by first class mail, certified or registered, postage prepaid,
addressed to the parties at the addresses shown below or to the Investment
Syndicate at the addresses shown in their respective subscription agreements.

         F. Costs. It is agreed that the costs and expenses, including
attorneys' fees, incurred by Ash Capital in conjunction with its due diligence
and closing of this Agreement and the exhibits hereto shall be paid by the
Corporation, regardless of the disposition of funds and documents by the Escrow
Agent, unless Ash elects not to proceed with the investment pursuant to the due
diligence walk-right provisions of paragraph 3d of the Escrow Agreement. The
Corporation shall promptly reimburse Ash Capital upon presentment of its bills
for such expenses, whether or not Ash Capital ever receives from the Escrow
Agent an original of this Agreement signed by the Corporation.

         G. Section Headings. The section headings in this Agreement are
inserted for convenience only and shall not be deemed to constitute a part of
this Agreement.

         H. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be deemed one and the same agreement. This
Agreement shall become a binding obligation upon execution and delivery of this
Agreement or counterpart hereof by each of the parties hereto.

         I. Governing Law. This Agreement shall be governed by, and construed
and enforced in all respects in accordance with the laws of the State of Utah.

                                       4
<PAGE>

     IN WITNESS WHEREOF, this Agreement has been executed on the day first
written above.

                           ROOMSYSTEMS, INC.

                           By:    /s/ S. L. Sunyich
                                  ---------------------------
                           Its:   CEO
                                  390 North 3050 East
                                  St. George, Utah  84790

                           ASH CAPITAL, LLC
                           by Providence  Management,  LLC, Manager

                           By:    /s/
                                  ---------------------------
                           Its:   MANAGER
                                  1400  S.  Foothill  Drive, Suite B25
                                  Salt Lake City, Utah 84108

                                       5

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