eRoom System Technologies Inc. (fka ERMS)

[jmhollen]

eRoomSystem Technologies Enters Into Agreement to Receive Interim Debt Financing of Up to $322,500

SALT LAKE CITY--(BUSINESS WIRE)--Nov. 15, 2002--

Interim Debt Financing Provides the Company 90 Days to Resolve
Financial Issues and Submit a Request to Nasdaq for Approval of
Up to $2,500,000 of Series D Convertible Preferred Stock Financing

eRoomSystem Technologies Inc. (Nasdaq:ERMS), a leading supplier of in-room technologies for the lodging industry, today announced the signing of a convertible promissory note ("Convertible Note") with Ash Capital LLC, its largest stockholder. Under the terms of the Convertible Note, Ash Capital will provide up to $322,500 in financing, and is obligated to loan the company a minimum of $250,000.

On Nov. 8, 2002, the company also entered into a Stock Purchase Agreement for the issuance of up to 2,777,778 shares of Series D Convertible Preferred Stock ("Series D Preferred Stock"). Ash Capital's commitment is up to $1,500,000 (inclusive of the Convertible Note), subject to the company satisfying each of the conditions in the Stock Purchase Agreement.

As a condition to closing the Series D Preferred Stock financing, the company must achieve the following: (a) obtain a new funding line to finance the placement of its products on a revenue sharing basis; (b) comply with Nasdaq's minimum bid requirement of $1 per share for 10 consecutive trading days by Jan. 15, 2003; (c) obtain consent from Nasdaq, or a majority of the company's shareholders, to issue the Series D Preferred Stock on the terms described above; (d) receive written confirmation from AMRESCO that neither it nor its subsidiaries is in default under the Master Business Lease Financing Agreement; (e) the company's manufacturer must commit to supply product to the company at an amount not to exceed current pricing; (f) must have executed settlements in place with its trade creditors who represent not less than 95% of the outstanding accounts payable as of Nov. 11, 2002; (g) the amount of proceeds from the Series D Preferred Stock shall not be less than $2,000,000; (h) there shall not be in effect any order that would prevent or make unlawful the closing of the Series D Preferred Stock financing; and (i) there shall not have occurred (or reasonably be expected to occur) any event, change or development which has had or could reasonably expected to have a material adverse effect.

Upon issuance, the Series D Convertible Preferred Stock will be convertible into common stock on a 1-for-6 basis, or at $0.15 per share. Thus, assuming 2,777,778 shares of Series D Preferred Stock are purchased in the private placement offering, such shares would be convertible, with the consent of a majority of the Series D stockholders, into 16,666,667 shares of common stock of the company.

The company intends to submit a request to Nasdaq in the next few days requesting consent to the terms of the Series D Preferred Stock financing. In the event that Nasdaq declines the company's request, the company will be required to solicit its shareholders and obtain majority approval for the Series D Preferred Stock financing to occur. There can be no assurance that the company will be successful in obtaining the consent of Nasdaq or a majority of its shareholders.

About eRoomSystem Technologies

eRoomSystem Technologies is a full service in-room provider for the lodging and travel industries. Its intelligent in-room computer platform and communications network supports eRoomSystem's line of fully automated and interactive refreshment centers (minibars), room safes, ambient trays and other proposed in-room applications. eRoomSystem's products are installed in major hotel chains both domestically and internationally. eRoomSystem ("ERMS") is a publicly-traded company listed on NASDAQ SmallCap Market.

CONTACT: eRoomSystem Technologies Inc., St. George
Gregory L. Hrncir (press/investor), 435/688-3603
Fax: [phone]
[e-mail]