Martinrea International Inc.

Martinrea International Inc.
Hy-Drive Technologies Ltd.

Hy-Drive Technologies Ltd.

February 01, 2005 07:30 ET

Hy-Drive Technologies and Martinrea Sign License Agreement


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: MARTINREA INTERNATIONAL INC.

TSX SYMBOL: MRE

AND HY-DRIVE TECHNOLOGIES LTD.

TSX VENTURE SYMBOL: HGS

FEBRUARY 1, 2005 - 07:30 ET

Hy-Drive Technologies and Martinrea Sign License
Agreement

TORONTO, ONTARIO--(CCNMatthews - Feb. 1, 2005) -

Companies to develop automotive Hydrogen Generating System aimed at
significantly reducing emissions, improving fuel economy and engine
performance; Martinrea makes strategic investment in Hy-Drive

Hy-Drive Technologies Ltd. (TSX VENTURE:HGS), a hydrogen-based energy
and power technology firm, and Martinrea International Inc. (TSX:MRE), a
leader in the production of quality metal parts, assemblies and modules
and fluid management systems focused primarily on the automotive sector,
today announced that they have signed a license agreement under which
the companies will jointly develop an automotive Hydrogen Generating
System (HGS) for automobiles and light trucks based on proprietary,
patented technology developed by Hy-Drive and its predecessor company.

The HGS generates and injects small amounts of hydrogen gas into the
combustion chamber of a regular internal combustion engine creating an
enriched air mixture and a more complete and faster burn of the air-fuel
mixture. Based on Hy-Drive's extensive testing and trials conducted to
date on a wide variety of internal combustion engines, Hy-Drive's HGS
has demonstrated substantial performance enhancements, including fuel
savings and reduced carbon monoxide, nitrous oxide and particulate
matter.

"We are extremely pleased to have the opportunity to work with
Martinrea, a Tier 1 automotive parts supplier with world-leading
capabilities, a strong customer base, and a deep commitment to
innovation," said Tom Brown, President of Hy-Drive. "This marks a major
milestone for our company and represents a strong endorsement of our
technology. With years of research and development work behind us,
numerous successful tests and trials, and a growing number of commercial
orders in the trucking sector, we believe we are now well positioned to
capitalize on this significant opportunity in the automotive industry."

"This agreement is in line with our long-held commitment to innovation
and thought leadership in product development and manufacturing," said
Fred Jaekel, President and Chief Executive Officer of Martinrea. "The
Hy-Drive HGS offers one of the best solutions to air pollution on the
market today and has high potential to help our automotive customers
meet their objectives to develop more fuel efficient and environmentally
friendly vehicles. Technologies that improve fuel consumption and reduce
pollution are a central part of our approach to fluid and fuel
management, and are important to sound environmental management as a
public benefit."

The companies will focus on modifying Hy-Drive's existing HGS, which
will include reducing the size of the system for automotive market.

Under the terms of the agreement, Martinrea was granted the exclusive
worldwide license for the development of Hy-Drive's technology for the
automotive industry. Martinrea will fund automotive related development
costs and will pay a royalty to Hy-Drive based on pre tax profits, when
earned. In addition, Martinrea subscribed for one million units of
Hy-Drive for gross proceeds to Hy-Drive of $800,000. Each unit is
comprised of one common share and one common share purchase warrant.
Each warrant entitles Martinrea to purchase one common share at a price
of $1.30 for a period of two years from the date hereof, unless
Hy-Drive's common shares are listed on Tier 1 of the TSX Venture
Exchange prior to the end of such two year period, in which case the
warrants will be exercisable for a period of five years from the date
hereof.

As consideration for Martinrea entering into the license agreement,
Hy-Drive issued an additional 1,000,000 common share purchase warrants
to Martinrea. These warrants have an exercise price of $1.90 but all
other terms and conditions are identical to the warrants partially
comprising the units. The securities issued pursuant to the
transactions, including any common shares issuable upon exercise of the
warrants, will be subject to resale restrictions for a period of four
months.

For additional background on the HGS and how it works, please go to
www.hy-drive.com and for further information about Martinrea please go
to their web site which is www.martinrea.com. Both of the two companies'
public documents can be found on www.sedar.com.

About Hy-Drive

Hy-Drive is an energy technology firm that has developed a patented
Hydrogen Generating System ("HGS") and, along with its predecessor
company, was the pioneer in its area. The Hy-Drive HGS generates and
injects small amounts of hydrogen gas into the combustion chamber of a
regular internal combustion engine, creating an enriched air mixture and
a more complete and faster burn of the air-fuel mixture. Based on
testing trials to date, the Hy-Drive HGS has shown significant
performance enhancement on a wide variety of internal combustion
engines. These benefits include: significant fuel savings; noticeable
horsepower and performance improvements; substantial reductions of
harmful emissions, including carbon monoxide, particulate matter and
nitrous oxides; and a cleaner burning engine resulting in less
maintenance.

Forward-Looking Statements

This press release contains forward-looking statements based on
assumptions, uncertainties and management's best estimates of future
events. When used herein, words such as "intend" and similar expressions
are intended to identify forward-looking statements. Forward-looking
statements are based on assumptions by and information available to
Hy-Drive and Martinrea ("the companies"). Investors are cautioned that
such forward-looking statements involve risks and uncertainties.
Important factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements
include such risks and factors as are detailed from time to time in the
periodic reports filed by the companies with regulatory authorities.
Actual results may differ materially from those currently anticipated.
The companies have no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Hy-Drive Technologies Ltd.
    Tom Brown
    President
    (905) 542-3024
    tomb@hy-drive.com
    or
    Martinrea International Inc.
    Nick Orlando
    Executive VP and CFO
    (416) 749-0314
    (905) 264-2937 (FAX)
    or
    The Equicom Group Inc.
    Craig Armitage or Jay Hussey
    Investor Relations
    (416) 815-0700
    carmitage@equicomgroup.com
    The TSX Venture Exchange has in no way passed upon the merits of the
    proposed transaction and has neither approved nor disapproved the
    contents of this press release.