Lignol and FPInnovations sign agreement

Aug. 2, 2011, Vancouver – Lignol Energy
Corporation and FPInnovations have signed a joint development and
commercialization agreement to develop new, high-value applications for the
cellulose produced by Lignol's biorefining process.

One of the primary product streams of
Lignol's integrated biorefinery platform is highly reactive cellulose, which
can be used in the production of biofuels, sugar platform chemicals, and cellulose-based
materials. Cellulose-based materials are widely used in a number of high-value
industrial applications such as textiles, paper, and food products.

The five-year agreement calls for Lignol
and FPInnovations to jointly conceive and execute projects with a mechanism for
commercial ownership based on the contributions of each party while recognizing
the substantial inventory of intellectual property that each organization
brings to the collaboration.

"The capability to produce high-value
cellulose-based materials will enhance the economics of our biorefining
platform and diversify the markets for our technology worldwide," says
Ross MacLachlan, president and CEO of Lignol.

"This agreement with Lignol supports
our mission of capitalizing on Canada's fibre attributes in developing new
products and market opportunities within a framework of environmental
sustainability that can optimize the forest sector value chain," says
Pierre Lapointe, president and CEO of FPInnovations. "Our relationship
with Lignol has been productive, leading to the successful development of two
commercial wood composite applications incorporating Lignol's unique lignin
formulations. We look forward to continued success under this agreement in the
development of high value cellulose products that can have applicability to the
Canadian forest products industry."