XA Signs Letter of Intent to Acquire Musters & Co., a Leading New York Event Design Firm Mark Musters to Lead XA's New York Design Center CHICAGO, Dec. 21 /PRNewswire-FirstCall/ -- XA, Inc., (OTC BB: XAIN), a major national event marketing firm that serves many Fortune 500 companies, reported that it has signed a letter of intent to acquire Musters & Co., a high-profile New York-based event design and production firm. The acquisition, which is anticipated to close in January, is expected to be immediately accretive to earnings. Musters & Co., headed by Mark Musters, is a leading provider of event design and decor for major corporate events. Known throughout New York as well as nationally for the brilliant environments he creates, Mark Musters has a cadre of glamorous clients among New York fashion and media companies. He created costumes and stage sets on Broadway, before opening his own event planning and floral design company in 1998. Chairman and Chief Executive Officer Frank Goldstin of XA said, "Mark Musters irrepressible creative spirit makes his firm a perfect match with XA. Like XA, he is dedicated to creating for his clients overwhelming environments, what he calls a 'sensory experience.'" Chief Operating Officer Joseph Wagner of XA said, "With the Musters & Co. acquisition, XA expects to add more than $2.5 million in revenue in the next year. In addition to acquiring a successful floral and event decor business, XA will, most importantly, gain the capability of producing in New York the one-of-a-kind event decor and design elements that we have had to outsource in the past. As a result, each event will be more profitable." XA announced that Mark Musters has agreed to orchestrate XA's state-of-the-art Design Center in New York. The center will become the design fabrication facility for XA as well as a showcase of XA's design and fabrication capabilities to clients. The center will further XA's ability to fabricate decor and environmental design elements for its prestigious roster of corporate clients and highly visible brands. Mark Musters, who will join XA as Creative Director, NY, said, "I am excited about working closely with XA's great management team and its high-profile clients. By combining talents and expertise, we will showcase cutting-edge environments in the Design Center. Everyday, every season and every holiday will give us a new platform to display our creativity." Working by appointment only, Musters' operations, located in the floral district in New York, include a wood shop and a welding shop for constructing elaborate environments. He has created spectacular showrooms and events for such high-profile New York-based corporations as Revlon, Cosmopolitan, Entertainment Weekly and People magazines, Tommy Hilfiger, VH1, SONY and Infiniti. These assignments have made his name a household word in the high-end event design industry. Mark Musters and his team will join XA, subsequent to the closing of the acquisition. The event marketing industry generates nearly $80 billion a year in direct spending, according to a study by Deloitte & Touche LLP. Moreover, corporate spending on event marketing has been growing; it rose 15% in 2003 and it is predicted to generate an additional 15%-to-20% growth in 2004. (Source: PROMO Magazine) About XA XA has full service offices in Chicago, New York and Los Angeles from which it provides corporations and highly visible brands with comprehensive event marketing, design and production services. Since 1989, Chairman and CEO Frank Goldstin and his team have been the creative force behind prestigious, national projects for such clients as The NBA, Disney, McDonald's, British Telecom, Song Airlines, Eurex, Olympus, Salvatore Ferragamo, Vogue, W Hotels, ABN AMRO and Emirates Airline. In 2003 and 2004, Special Events Magazine ranked XA as one of the "Top 50 Powerhouse Event Companies in the World." This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "will," "anticipated," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward-looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the company's industry and general economy; competitive factors; ability to attract and retain personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-KSB; its quarterly reports on Forms 10-QSB; and any reports on Form 8-K. XA, Inc. (OTC BB: XAIN) takes no obligation to update or correct forward-looking statements and also takes no obligation to update or correct information prepared by third parties that is not paid for by the Company. For more information, please contact: Company: Investors: Media: Lara Shipp Truc Nguyen Stan Froelich XA VP, Investor Relations VP, Media Relations 312-397-9100 ext. 2399 Stern & Co. Stern & Co. 212-888-0044 212-888-0044 DATASOURCE: XA, Inc. CONTACT: Company, Lara Shipp of XA, +1-312-397-9100 ext. 2399, ; or Investors, Truc N. Nguyen, VP, Investor Relations, +1-212-888-0044, , or Media, Stan Froelich, VP, Media Relations, +1-212-888-0044, , both of Stern & Co. Web site: http://www.expagency.com/

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