Exercise of Option in relation to CLNs

KLEENAIR SYSTEMS INTERNATIONAL PLC

(AIM: KSI)

Exercise of Option in relation to Convertible Secured Loans

Kleenair Systems International Plc ("Kleenair" or "the Company") announces that further to the creation of a convertible secured loan note instrument dated 22 June 2010 ("the Agreement") under which Kleenair may issue up to £1 million secured convertible loan notes ("CLN") to Global Investment Strategy (UK) Limited ("GIS"), GIS has purchased £300,000 worth of CLNs.

Monies raised from the issue of these CLNs is available to Kleenair immediately for the purpose of working capital requirements and to enable the company to complete appropriate due diligence enquiries in relation to opportunities to invest in businesses which the directors consider will best lead to enhanced shareholder value.

The remaining total number of CLNs over which GIS holds an option to purchase under the Agreement is £700,000 together with interest due.

GIS owns 150,000 shares in Kleenair, representing approximately 5 per cent of the current issued share capital and is a company in whose shares John Gunn has a controlling interest. Mr Gunn currently owns 500,001 shares in Kleenair, representing approximately 16.5 per cent. of the current issued share capital. The directors, who have consulted with WH Ireland, consider the terms of this transaction are fair and reasonable insofar as the shareholders of Kleenair are concerned.