Friends of Azure Letter

Dear Friends of Azure:

Recent press releases issued by the Michigan Department of Transportation (MDOT) and the Illinois Department of Transportation (IDOT) have triggered some confusion and a number of questions from many of you. Let me set the record straight.

First of all, the MDOT agreement is exciting and very good news for Azure, but not yet quite as good as the press release seemed to indicate. MDOT has approved a contract that would allow Michigan municipalities to order up to 50 Azure Balance(TM) Hybrid Electric buses over the next three years. We hope and expect that all 50 of the units will eventually be ordered. However, they have not been ordered yet. The agreement with MDOT sets a long-term price for the units so that state municipalities can order them as needs arise within their fleets. Our official Azure press release discussing the Michigan Department of Transportation contract will be sent momentarily.

IDOT announced its intention to order 31 Azure units. We are confident that we will realize these 31 orders, however, agreements are not yet finalized.

Both contracts are further validation that AZD has the products that communities and businesses across the country want and need. "It is exciting to make small hybrid buses available to Michigan transit agencies, given their savings in emissions and better fuel economy," said Sharon Edgar, MDOT administrator, Passenger Transportation. "This is exactly what Michigan transit agencies are looking for - a small hybrid transit bus, more efficient, better suited to their service needs. It's a new direction for transit systems everywhere in the nation and we have several Michigan agencies that are interested in obtaining one or more for their system."

That's music to our ears and we're hearing it more and more often from states and other organizations around the country. The attached press release announces the MDOT contract from Azure's point of view and summarizes some of the business opportunities where we are already in other states and municipalities.

We hope this answers any questions you may have on the recent announcements and on our continuing progress with the Balance(TM) Hybrid Electric product. We hope you're as excited about the future as we are. As always, we appreciate your confidence and support.

Sincerely,

AZD


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 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.