Azure Dynamics Announces Adoption of Shareholder Rights Plan

OAK PARK, MI, May 5, 2009 -- Azure Dynamics Corporation (TSX: AZD) - ("Azure") or (the "Company"), a leading developer of innovative hybrid green technologies that address environmental and cost issues for operators of commercial vehicle fleets, today announced that its board of directors (the "Board") has approved the adoption of a shareholder rights plan (the "Rights Plan"), effective immediately, subject to acceptance by the Toronto Stock Exchange.

The Rights Plan is designed to encourage the fair treatment of Azure's shareholders should a take-over bid be made for Azure by providing the Board and the shareholders with more time to evaluate any unsolicited take-over bid and, if appropriate, to pursue alternatives to maximize shareholder value. The Rights Plan has not been adopted in response to any specific proposal to acquire control of Azure and Azure is not aware of any such proposal.

The Rights Plan is effective immediately, but it must be ratified by shareholders of Azure within six months. Shareholders will be asked to ratify and approve the Rights Plan at the annual and special meeting of shareholders of Azure to be held on June 9, 2009 (the "Meeting"). If ratified, the Rights Plan will remain in effect until the close of business on the date of termination of the annual meeting of shareholders in 2012, subject to earlier termination or expiration of the Rights Plan in accordance with its terms. The Rights Plan must be ratified by a majority of the votes cast at the Meeting by independent shareholders. If the Rights Plan is not ratified at the Meeting, all rights issued pursuant to the Rights Plan and the Rights Plan will terminate and be null and void and of no further force and effect.

The Rights Plan is similar to rights plans adopted by other Canadian corporations. Subject to the terms of the Rights Plan, the rights issuable under the Rights Plan will become exercisable where a party, together with any parties related to it, acquires or announces its intention to acquire 20% or more of Azure's outstanding shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of the Board. Rights holders (other than the acquiring person and related persons) can purchase shares of Azure at half the prevailing market price at the time the rights become exercisable.

The Rights Plan is not intended to prevent take-over bids. Under the Rights Plan, a bid that, among other things, is made to all shareholders on identical terms and conditions and that is open for at least 60 days may constitute a "Permitted Bid".