TORONTO, Canada, August 28 /PRNewswire/ --     Azure Dynamics Corporation (TSX: AZD & LSE: ADC) 
("Azure" or the "Company") a leading developer of hybrid electric and 
electric powertrains for commercial vehicles is pleased to announce that it 
has signed a commercial development and cooperation agreement with a North 
American company. Azure will deliver a gasoline parallel hybrid electric 
Ford E-450 based vehicle for industry viability validation, testing and 
demonstration within the company's North American fleet.

The parallel hybrid electric demonstration vehicle will be used to verify
the fuel economy improvements, emissions reductions and maintenance cost
savings that can be achieved using Azure's patented technology. Successful
completion of the program will result in the company becoming a lead customer
for Azure's hybrid technology on the Ford E-450 chassis with a minimum
commitment of 10 percent of their fleet replacement purchases per annum.

Scott Harrison, Azure's Chief Executive Officer said, "This program
represents another step in our path to commercialising hybrid drive 
technology into major truck fleets in North America. Our customer is 
interested in testing and verifying the economic and environmental benefits 
of hybrid drive technology. We are confident we can deliver a product which 
will be both economic and environmentally sound and that more business will 
follow."

About Azure Dynamics

Azure Dynamics Corporation (TSX: AZD) (LSE: ADC) is a world leader in the
development and production of hybrid electric and electric components and
powertrain systems for commercial vehicles. Azure is strategically targeting
the commercial delivery vehicle and shuttle bus markets and is currently
working internationally with various partners and customers. The Company is
committed to providing customers and partners with innovative, 
cost-efficient, and environmentally friendly energy management solutions. 
For more information, please visit http://www.azuredynamics.com.

The TSX and LSE Exchanges do not accept responsibility for the adequacy
or accuracy of this release.

Forward-looking Statements

This press release contains forward-looking statements. More
particularly, this press release contains statements concerning Azure's
business development strategy, projected commercial revenues and product
deliveries.

The forward-looking statements are based on certain key expectations and
assumptions made by Azure, including expectations and assumptions concerning
achievement of current timetables for development programs, target market
acceptance of Azure's products, current and new product performance,
availability and cost of labour and expertise, and evolving markets for power
for transportation vehicles.

Although Azure believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue reliance 
should not be placed on the forward-looking statements because Azure can 
give no assurance that they will prove to be correct. Since forward-looking 
statements address future events and conditions, by their very nature they 
involve inherent risks and uncertainties. Actual results could differ 
materially from those currently anticipated due to a number of factors and 
risks. These include, but are not limited to, the risks associated with 
Azure's early stage of development, lack of product revenues and history of 
losses, requirements for additional financing, uncertainty as to commercial 
viability, uncertainty as to product development and commercialization 
milestones being met, uncertainty as to the market for Azure's products and 
unproven acceptance of Azure's technology, competition for capital, product 
market and personnel, uncertainty as to target markets, dependence upon third 
parties, changes in environmental laws or policies, uncertainty as to patent 
and proprietary rights, availability of management and key personnel, and 
acquisition integration risk. These risks are set out in more detail in 
Azure's annual information form which can be accessed at 
http://www.sedar.com.

The forward-looking statements contained in this press release are made
as of the date hereof and Azure undertakes no obligation to update publicly 
or revise any forward-looking statements or information, whether as a result 
of new information, future events or otherwise, unless so required by 
applicable securities laws.