Avalon Digital Marketing Systems Announces Acquisition of AGEA Corp.

Business Editors & High-Tech Writers

HUNTINGTON BEACH, Calif.--(BUSINESS WIRE)--Dec. 23, 2002

Technology Provides Instant Notification and Messaging

Capabilities for E-Mail, Wireless, and Mobile Digital Devices

Avalon Digital Marketing Systems Inc. (Nasdaq:AVLN), a leading provider of digital marketing software and services, today announced that it has acquired the assets of privately held AGEA Corp., a Texas-based technology company that develops advanced, interactive notification and messaging technologies.

"The addition of AGEA technology helps to reinforce our position as a leading provider of targeted messaging solutions," stated Robert Webber, Avalon's president and CEO.

"It also allows us to immediately service SMS, hand-held PDA and other mobile and wireless digital devices in a targeted and real-time fashion. In addition to enhancing our product offering and revenue opportunities, Avalon will receive several hundred thousand dollars in additional cash, and adds three key employees from AGEA to augment our senior sales and development teams."

"AGEA has spent the last three years and significant capital investments to develop an industry leading, interactive notification technology that can be used to monitor critical data and deliver real-time information to digital devices," stated Russell Glass, former president of AGEA and now vice president of Enterprise Solutions for Avalon.

"By combining the AGEA technology with Avalon's suite of digital marketing solutions, we will provide clients with the unique ability to effectively communicate with their customers through ongoing, real-time interactions via the customer's preferred communication channels, including the latest in mobile devices."

AGEA shareholders will receive shares of Avalon common stock, as well as performance warrants to purchase additional shares that will only vest upon the AGEA products fulfilling certain net revenue targets for Avalon through Dec. 31, 2003.

About Avalon Digital Marketing Systems

Avalon is a digital marketing software and services company serving both the Fortune 1000 and the more than 25 million small businesses that comprise the bulk of the U.S. economy through a suite of technology solutions. The company provides its large enterprise clients with marketing automation and digital communication software complemented by full-service professional consultation and integration support. The company addresses the small business market through e-commerce products, including merchant accounts, payment gateways and Web site design and hosting software.

Avalon's expertise is centered on three key areas of eBusiness -- providing its clients with compelling content delivery technology, streamlined e-commerce solutions, and enhanced one-to-one communications software. In addition to a growing base of more than 10,000 small-business customers, Avalon's customer base includes more than 100 leading companies, including Mazda, Cendant, Johnson & Johnson, NEC, Avaya, and the National Basketball Association. The company's headquarters are in Southern California, with offices in New York City, Salt Lake City, and Hong Kong.

About AGEA

Privately held AGEA Corp., based in Austin, Texas was founded in 1999 as a provider of real-time communication solutions for enterprise customers. AGEA's mission is to develop software solutions that provide access to enterprise data and facilitate real-time interaction between employees, partners, customers, and systems. AGEA's interactive notification technology, including the Business Acceleration Suite ("BAS"), is used to monitor critical data and deliver real-time information to digital devices.

BAS facilitates context-based, real-time communications within a business, across suppliers and distributors, and directly to end customers. Investors in the company include Sun Microsystems Inc., 5280 Partners, Milestone Equities, Alignment Capital Partners, Blackfin Capital and Templar Capital.

Certain statements contained in this news release are forward-looking statements under the federal securities laws, and Avalon Digital Marketing Systems intends that such statements be subject to the safe-harbor created thereby. These forward-looking statements are not guarantees of future growth and involve risks, uncertainties and assumptions that are difficult to predict. Avalon's performance and actual outcomes and results may differ materially from what is expressed in, or implied by, such forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning (i) potential adoption of AGEA technology, and (ii) future growth in the digital marketing industry. Among the important factors that could cause actual results to differ from such forward-looking statements include, without limitation, (i) Avalon's limited operating history, (ii) Avalon's possible inability to sustain and manage its growth, (iii) the risk that Avalon will not be able to obtain additional financing, if needed, to support its operations, and (iv) the possible failure of Avalon to successfully integrate product offerings and operations. Additional factors that could affect Avalon and its financial results are included in the periodic filings of Avalon, MindArrow Systems Inc. and Category 5 Technologies Inc. made with the Securities and Exchange Commission, and the joint proxy statement/prospectus of MindArrow and Category 5 dated Sept. 16, 2002 filed with the SEC. Avalon undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.