Exhibit 99.1

Vasogen Inc.

NOTICES OF SPECIAL MEETINGS

and

JOINT MANAGEMENT INFORMATION CIRCULAR

with respect to

THE PROPOSED ARRANGEMENT INVOLVING

VASOGEN INC., 7231971 CANADA INC., 7232004 CANADA INC.,
CERVUS LP and CERVUS GP LTD.

and

THE PROPOSED ARRANGEMENT AND MERGER OF

VASOGEN INC., 7231971 CANADA INC. and 7232004 CANADA INC.

and

INTELLIPHARMACEUTICS LTD., INTELLIPHARMACEUTICS CORP.,
7237081 CANADA INC. and 20090831 DELAWARE INC.

to form

INTELLIPHARMACEUTICS INTERNATIONAL INC.

September 16, 2009

These materials are important and require your immediate attention. They require shareholders of Vasogen Inc. and IntelliPharmaCeutics Ltd. to make important decisions. If you are in doubt as to how to make your decisions, please contact your financial, legal, tax or other professional advisors. If you have any questions or require more information with regard to the procedures for voting or completing your proxy or have questions regarding the transactions described in the enclosed Notices of Special Meetings and Joint Management Information Circular, please contact Christopher J. Waddick, President and Chief Executive Officer of Vasogen at (905) 817-2002 or John Allport, Vice-President Legal Affairs and Licensing of IntelliPharmaCeutics Ltd. at (416) 798-3001.

Vasogen Inc.

September 16, 2009

Dear Vasogen Inc. shareholders:

The boards of directors of Vasogen Inc. (“Vasogen”) and Cervus GP Ltd. (“Cervus GP”) each have unanimously approved the arrangement involving Vasogen, 7231971 Canada Inc. (“New Vasogen”), 7232004 Canada Inc. (“Vasogen Subco”), Cervus LP (“Cervus”) and Cervus GP pursuant to a Court-approved plan of arrangement and are recommending that shareholders of each of Vasogen and Cervus GP and unitholders of Cervus vote in favour of the proposed transaction.

Separately, the boards of directors of Vasogen, IntelliPharmaCeutics Ltd. (“IPC US”), and IntelliPharmaCeutics Corp. (“IPC Opco”), each have unanimously approved an arrangement of their respective companies pursuant to a Court approved plan of arrangement and a plan of merger (such transaction to take effect after completion of the Cervus transaction unless such Cervus transaction does not proceed) and are recommending that shareholders of each of Vasogen and IPC US vote in favour of the proposed transaction.

Vasogen, Cervus, Cervus GP and IPC US will each hold a special meeting of their shareholders and unitholders, as applicable, on October 19, 2009 to consider and vote on proposals related to the arrangements and merger described above.

At the Vasogen meeting, Vasogen shareholders will be asked, among other things, to consider and, if deemed advisable, pass a special resolution approving the arrangement with Cervus and Cervus GP pursuant to which, among other things, (i) Vasogen will transfer all of its assets and liabilities (other than certain excluded assets including the benefit of its tax accounts, as described in the plan of arrangement) to Vasogen Subco, (ii) through a series of steps Vasogen shareholders will effectively receive shares on a one for one basis in New Vasogen and Cervus will have invested C$7.5 million in New Vasogen, (iii) unitholders of Cervus and shareholders of Cervus GP will exchange their interests for shares in Vasogen on the terms described in the plan of arrangement (the “Plan of Arrangement”), and (iv) Vasogen will be renamed “Cervus Equipment Corporation”.

Also at the Vasogen meeting, Vasogen shareholders will be asked to consider and, if deemed advisable, pass a special resolution approving the arrangement with IPC US pursuant to which, among other things, and after giving effect to the transactions described above in respect of Cervus, (i) holders of shares in IPC US that are resident in Canada will exchange their IPC US shares for shares in 7237081 Canada Inc. (“IPC Newco”), (ii) New Vasogen and IPC Newco will amalgamate with the resulting amalgamated corporation (“New IPC”) to be named “IntelliPharmaCeutics International Inc.”, and (iii) through a merger of IPC US and 20090831 Delaware Inc., all remaining holders of IPC US shares will, in exchange for their shares in IPC US, receive shares in New IPC.

Upon completion of the arrangements and merger, current IPC US Shareholders will own approximately 86% of the outstanding common shares of New IPC and current Vasogen shareholders will own approximately 14% of the outstanding common shares of New IPC (unless the arrangement with Cervus is not completed and the arrangement and merger with IPC is completed, in which case the approximate ownership of New IPC will be 92% for current IPC US Shareholders and 8% for current Vasogen Shareholders).

Enclosed are materials containing important information about the arrangement and merger and why we believe they are in the best interests of Vasogen. We urge you to read the enclosed materials carefully, as they have been prepared to help you make an informed decision. If you require assistance, please consult your financial, legal, tax or other professional advisors.

Because the completion of the arrangements and merger requires approval of Vasogen shareholders, YOUR VOTE IS IMPORTANT. To become effective (i) a resolution approving the arrangement in respect of Cervus and Cervus GP must be approved by at least 662/3% of the votes cast by Vasogen shareholders present in person, or represented by proxy, and entitled to vote at the Vasogen meeting; and (ii) a resolution approving the arrangement in respect of IPC US must be approved by at least 662/3% of the votes cast by Vasogen shareholders present in person, or represented by proxy, and entitled to vote at the Vasogen meeting. Separate approvals will be required in respect of the shareholders of IPC US and Cervus GP and the unitholders of Cervus.

In view of the importance of the actions to be taken at the Vasogen shareholder meeting, we urge you to vote FOR the proposals related to the arrangement and merger by promptly submitting your proxy by signing, dating and returning the appropriate enclosed proxy in the postage-paid envelope provided. You are urged to vote your shares in this manner, regardless of the number of shares you own or whether you will attend the appropriate meeting. Returning the proxy does not deprive you of your right to attend the appropriate meeting where the arrangement and merger will be considered and to vote your shares in person.

You will be asked at the meeting to make important decisions. If you are in doubt as to how to make your decisions, please contact your financial, legal, tax or other professional advisor. If you have any questions or require more information with regard to the procedures for voting or completing your proxy, please contact Christopher J. Waddick, President and Chief Executive Officer of Vasogen at (905) 817-2002.

VASOGEN MANAGEMENT SUPPORTS THIS TRANSACTION AND JOINS WITH OUR BOARD OF DIRECTORS IN RECOMMENDING THAT YOU VOTE FOR THE PROPOSALS RELATED TO THE ARRANGEMENT AND MERGER.

Sincerely,



Christopher J. Waddick
President and Chief Executive Officer
Vasogen Inc.

September 16, 2009

Dear IntelliPharmaCeutics Ltd. shareholders:

The boards of directors of IntelliPharmaCeutics Ltd. (“IPC US”), IntelliPharmaCeutics Corp. (“IPC Opco”) and Vasogen Inc. (“Vasogen”) each have unanimously approved an arrangement of their respective companies pursuant to a Court-approved plan of arrangement and a plan of merger and are recommending that shareholders of each of IPC US and Vasogen vote in favour of the proposed transaction.

Separately, the boards of directors of Vasogen and Cervus GP Ltd. (“Cervus GP”) each have unanimously approved the arrangement involving Vasogen, Cervus LP (“Cervus”) and Cervus GP pursuant to a Court approved plan of arrangement and are recommending that shareholders of each of Vasogen and Cervus GP and unitholders of Cervus vote in favour of the proposed transaction.

IPC US, Vasogen, Cervus and Cervus GP will each hold a special meeting of their shareholders and unitholders, as applicable, on October 19, 2009 to consider and vote on proposals related to the arrangement and merger described above.

At the Vasogen meeting, Vasogen shareholders will be asked, among other things, to consider and, if deemed advisable, pass a special resolution approving the arrangement with Cervus and Cervus GP pursuant to which, among other things, (i) Vasogen will transfer all of its assets and liabilities (other than certain excluded assets including the benefit of its tax accounts described in the plan of arrangement) to 7232004 Canada Inc. (“Vasogen Subco”), (ii) through a series of steps Vasogen shareholders will effectively receive shares on a one for one basis in 7231971 Canada Inc. (“New Vasogen”) and Cervus will have invested C$7.5 million in New Vasogen, (iii) unitholders of Cervus and shareholders of Cervus GP will exchange their interests for shares in Vasogen on the terms described in the plan of arrangement (the “Plan of Arrangement”), and (iv) Vasogen will be renamed “Cervus Equipment Corporation”.

At the Vasogen meeting, Vasogen shareholders will also be asked to consider and, if deemed advisable, pass a special resolution approving the arrangement with IPC US pursuant to which, among other things, and after giving effect to the transactions described above in respect of Cervus, (i) holders of shares in IPC US that are resident in Canada will exchange their IPC shares for shares in 7237081 Canada Inc. (“IPC Newco”), (ii) New Vasogen and IPC Newco will amalgamate with the resulting amalgamated corporation (“New IPC”) to be named “IntelliPharmaCeutics International Inc.”, and (iii) through a merger of IPC US and 20090831 Delaware Inc., all remaining holders of IPC US shares will, in exchange for their shares in IPC US, receive shares in New IPC.

At the IPC US meeting, IPC US shareholders will be asked to consider and, if deemed advisable, approve the merger of IPC US with a wholly-owned subsidiary of IntelliPharmaCeutics Inc., with IPC US continuing as the surviving corporation in the merger under the name “IntelliPharmaCeutics Ltd.”, to be completed coincident with the arrangement.

Upon completion of the arrangement and merger, former IPC US shareholders will own approximately 86% of the outstanding common shares of New IPC and current Vasogen shareholders will continue to own approximately 14% of the outstanding common shares of New IPC (unless the arrangement with Cervus is not completed and the arrangement and merger with IPC is completed, in which case the approximate ownership of New IPC will be 92% for current IPC US shareholders and 8% for current Vasogen Shareholders).

Enclosed are materials containing important information about the arrangement and merger and why we believe they are in the best interests of IPC US. We urge you to read the enclosed materials carefully, as they have been prepared to help you make an informed decision. If you require assistance, please consult your financial, legal, tax or other professional advisors.

Because the completion of the arrangement and merger requires approval of the IPC US shareholders, YOUR VOTE IS IMPORTANT. To become effective, a resolution approving the merger must be approved by holders of a majority of each class of IPC US shares entitled to vote at the IPC US meeting, voting as separate classes. Certain IPC US shareholders have entered into agreements pursuant to which each of them has agreed to vote their IPC US shares in favour of the merger. These shareholders own, in the aggregate, approximately 60% of the issued and outstanding IPC US common shares and 100% of the issued and outstanding IPC US special voting shares and accordingly represent sufficient votes to assure the shareholder approval of the merger.

In view of the importance of the actions to be taken at the IPC US shareholder meeting, we urge you to vote FOR the proposals related to the arrangement and merger by promptly submitting your proxy - by signing, dating and returning the appropriate enclosed proxy in the postage-paid envelope provided. You are urged to vote your shares in this manner, regardless of the number of shares you own or whether you will attend the meeting. Returning the proxy does not deprive you of your right to attend the meeting and to vote your shares in person.

You will be asked at the meeting to make important decisions. If you are in doubt as to how to make your decisions, please contact your financial, legal, tax or other professional advisor. If you have any questions or require more information with regard to the procedures for voting or completing your proxy, please contact John Allport, Vice-President Legal Affairs and Licensing, of IPC US at (416) 798-3001.

IPC MANAGEMENT SUPPORTS THIS TRANSACTION AND JOINS WITH OUR BOARD OF DIRECTORS IN RECOMMENDING THAT YOU VOTE FOR THE PROPOSALS RELATED TO THE ARRANGEMENT AND MERGER.

Sincerely,



Dr. Isa Odidi
Chairman and Chief Executive Officer
IntelliPharmaCeutics Ltd.

Vasogen Inc.

NOTICE OF SPECIAL MEETING OF VASOGEN INC. SHAREHOLDERS

NOTICE IS HEREBY GIVEN THAT a special meeting (the “Vasogen Meeting”) of shareholders of Vasogen Inc. (“Vasogen”) will be held at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington Street West, Toronto, Ontario, Canada, on October 19, 2009, at 10:00 a.m. (Eastern Time) for the following purposes:

1. to consider pursuant to an interim order of the Ontario Superior Court of Justice (Commercial List) dated September 4, 2009, as the same may be amended:

(a) if deemed advisable, to pass, with or without variation, a special resolution of the shareholders of Vasogen to approve an arrangement under section 192 of the Canada Business Corporations Act (the “CBCA”) involving Vasogen, 7231971 Canada Inc., 7232004 Canada Inc., Cervus LP and Cervus GP Ltd. (the “Cervus Arrangement”) subject to such amendments and adjustments to the terms of the Cervus Arrangement as contemplated under the arrangement agreement between Vasogen, Cervus LP and Cervus GP Ltd. dated August 14, 2009, and all as more particularly described in the accompanying joint management information circular (the “Joint Circular”); and

(b) if deemed advisable, to pass, with or without variation, a special resolution of the shareholders of Vasogen to approve an arrangement under section 192 of the CBCA involving Vasogen, 7231971 Canada Inc., 7232004 Canada Inc., IntelliPharmaCeutics Ltd. and IntelliPharmaCeutics Corp. (the “IPC Arrangement”) subject to such amendments and adjustments to the terms of the IPC Arrangement as contemplated under the arrangement agreement between Vasogen, IntelliPharmaCeutics Ltd. and IntelliPharmaCeutics Corp. dated August 14, 2009, and all as more particularly described in the Joint Circular;

2. to consider and, if deemed advisable, to pass a resolution approving the adoption of the New Option Plan (as defined in the Joint Circular), as more particularly described in the Joint Circular; and

3. to transact such further and other business as may properly come before the Vasogen Meeting or any adjournment or adjournments thereof.

The specific details of the matters proposed to be put before the Vasogen Meeting are set forth in the Joint Circular that accompanies and forms part of this Notice.

DATED at Toronto, Ontario, September 16, 2009.

BY ORDER OF THE BOARD OF DIRECTORS

Christopher J. Waddick

President and Chief Executive Officer

NOTES:

1. A Joint Management Information Circular, Form of Proxy and Letter of Transmittal accompany this Notice of Meeting. Registered shareholders who are unable to be present at the Vasogen Meeting are kindly requested to specify on the accompanying Form of Proxy the manner in which the shares represented thereby are to be voted, and to sign, date, and return same in accordance with the instructions set out in the Form of Proxy and the Joint Management Information Circular.

2. The directors have fixed a record date of September 4, 2009 for the Vasogen Meeting. Accordingly, shareholders registered on the books of Vasogen at the close of business on September 4, 2009 are entitled to notice of the Vasogen Meeting and are entitled to vote thereat.

3. If you are a beneficial shareholder and receive these materials through your broker, custodian, nominee or other intermediary, please complete and return the materials in accordance with the instructions provided to you by your broker or intermediary.

NOTICE OF SPECIAL MEETING OF INTELLIPHARMACEUTICS LTD. SHAREHOLDERS

NOTICE IS HEREBY GIVEN THAT a special meeting (the “IPC US Meeting”) of shareholders of IntelliPharmaCeutics Ltd. (“IPC US”) will be held at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington St. West, Toronto, Ontario, Canada, on October 19, 2009, at 11:30 a.m. (Eastern Time) for the following purposes:

1. to consider the merger of IPC US with 20090831 Delaware Inc. (“IPC Newco US”), a wholly-owned subsidiary of 7237081 Canada Inc. pursuant to Section 251 of the Delaware General Corporation Law pursuant to which, among other things,

(a) IPC Newco US will be merged with and into IPC US, the separate existence of IPC Newco US shall cease and IPC US shall continue as the surviving corporation under the name “IntelliPharmaCeutics Ltd.”, and

(b) the surviving corporation shall become a wholly-owned direct subsidiary of 7237081 Canada Inc., or its successor, IntelliPharmaCeutics International Inc., the corporation to result from the amalgamation of 7237081 Canada Inc. and 7231971 Canada Inc.;

subject to such amendments and adjustments to the terms of the merger as contemplated under the merger agreement, all as more particularly described in the accompanying joint management information circular (the “Joint Circular”); and

2. to transact such further and other business as may properly come before the IPC US Meeting or any adjournment or adjournments thereof.

The specific details of the matters proposed to be put before the IPC US Meeting are set forth in the Joint Circular that accompanies and forms part of this Notice.

DATED at Toronto, Ontario, September 16, 2009.

BY ORDER OF THE BOARD OF DIRECTORS

Dr. Isa Odidi

Chairman and Chief Executive Officer

NOTES:

1. A Joint Management Information Circular, Form of Proxy and Letter of Transmittal accompany this Notice of Meeting. Registered shareholders who are unable to be present at the IPC US Meeting are kindly requested to specify on the accompanying Form of Proxy the manner in which the shares represented thereby are to be voted, and to sign, date, and return same in accordance with the instructions set out in the Form of Proxy and the Joint Management Information Circular.

2. The directors have fixed a record date of September 21, 2009 for the IPC US meeting. Accordingly, shareholders registered on the books of IPC US at the close of business on September 21, 2009 are entitled to notice of the IPC US Meeting and are entitled to vote thereat.

3. If you are a beneficial shareholder and receive these materials through your broker or another intermediary, please complete and return the materials in accordance with the instructions provided to you by your broker, custodian, nominee or other intermediary.

Vasogen Inc.

JOINT MANAGEMENT INFORMATION CIRCULAR

This joint management information circular (the “Joint Circular”) is being furnished to holders of common shares of Vasogen Inc. (“Vasogen”), a Canadian corporation, in connection with the solicitation of proxies by management of Vasogen for use at the special meeting of Vasogen shareholders (the “Vasogen Meeting”) to be held at 10:00 a.m. (Eastern Time) on October 19, 2009 at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington Street West, Toronto, Ontario, Canada, and any adjournment or postponement thereof.

This Joint Circular is also being furnished to holders of common stock of IntelliPharmaCeutics Ltd. (“IPC US”), a Delaware corporation, in connection with the solicitation of proxies by management of IPC US for use at the special meeting of the IPC US Shareholders (the “IPC US Meeting”) to be held at 11:30 a.m. (Eastern Time) on October 19, 2009 at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington St. West, Toronto, Ontario, Canada, and any adjournment or postponement thereof.

Information in this Joint Circular is given as of September 11, 2009, except as otherwise indicated herein. Unless otherwise indicated, dollar amounts are expressed in Canadian dollars.

These security holder materials are being sent to both registered and non-registered owners of the securities. If you are a non-registered owner, and either Vasogen or IPC US (or their respective agents) has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf.

Please see the section entitled “Risk Factors” for certain considerations relevant to the approval of the Cervus Arrangement, the IPC Arrangement and Merger (as defined below) and the transactions contemplated in connection therewith and an investment in the securities referred to in this Joint Circular.

No person is authorized to give any information or to make any representation not contained in this Joint Circular, and, if given or made, such information or representation should not be relied upon as having been authorized. This Joint Circular does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation of an offer or proxy solicitation. Neither delivery of this Joint Circular nor any distribution of the securities referred to in this Joint Circular shall, under any circumstances, create an implication that there has been no change in the information set forth herein since the date of this Joint Circular.

The common shares of 7231971 Canada Inc. (“New Vasogen”) to be issued pursuant to the Cervus Arrangement and the common shares of IntelliPharmaCeutics International Inc. (“New IPC”) to be issued in connection with the IPC Arrangement and Merger have not been approved or disapproved by the U.S. Securities and Exchange Commission (the “SEC”) or any securities regulatory authority of any state of the United States or province or territory of Canada, nor has the SEC or any securities regulatory authority of any state of the United States or province or territory of Canada passed on the merits or fairness of the proposed Cervus Arrangement or IPC Arrangement and Merger or the adequacy or accuracy of this Joint Circular or approved or disapproved of the securities offered by and on behalf of New Vasogen or New IPC. Any representation to the contrary is a criminal offence.

INFORMATION PROVIDED BY VASOGEN AND IPC COMPANIES

The information concerning IPC US and IntelliPharmaCeutics Corp. (“IPC Opco” and with IPC US, the “IPC Companies”), IPC Newco and IPC Newco US contained in this Joint Circular, including the appendices attached hereto, has been provided by the IPC Companies. The Vasogen Board has relied upon this information without having made any independent inquiry as to the accuracy thereof. Vasogen assumes no responsibility for the accuracy or completeness of such information, nor for any omission on the part of the IPC Companies to disclose facts or events which may affect the accuracy of any such information.

The information concerning Vasogen and its subsidiaries contained in this Joint Circular, including the appendices attached hereto and the information incorporated by reference herein, has been provided by Vasogen. The IPC US Board has relied upon this information without having made any independent inquiry as to the accuracy thereof. The IPC Companies assume no responsibility for the accuracy or completeness of such information, nor for any omission on the part of Vasogen to disclose facts or events which may affect the accuracy of any such information.

TABLE OF CONTENTS

INFORMATION PROVIDED BY VASOGEN AND IPC COMPANIES		1

GLOSSARY OF TERMS		1

NOTICE TO UNITED STATES SHAREHOLDERS OF VASOGEN AND IPC US		9

Exchange Rates		9

DOCUMENTS INCORPORATED BY REFERENCE		10

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		11

SUMMARY		12

The Meetings		12
The Arrangement and Merger		13

VOTING INFORMATION AND GENERAL PROXY MATTERS FOR VASOGEN SHAREHOLDERS		24

Solicitation of Proxies		24
Appointment and Revocation of Proxies		24
Signature of Proxy		24
Exercise of Discretion of Proxy		24
Advice to Non-Registered Vasogen Shareholders		24
Voting Securities and Principal Holders of Voting Securities		25
Interests of Certain Persons in the Arrangement and Merger		25
Date, Time and Place of the Vasogen Meeting		26
Matters to Be Considered		26
Quorum and Votes Required		26
Dissent Rights of Vasogen Shareholders		26

VOTING INFORMATION AND GENERAL PROXY MATTERS FOR IPC US SHAREHOLDERS		28

Solicitation of Proxies		28
Appointment and Revocation of Proxies		28
Signature of Proxy		28
Exercise of Discretion of Proxy		28
Advice to Non-Registered IPC US Shareholders		29
Voting Securities and Principal Holders of Voting Securities		29
Approval Agreements		30
Interests of Certain Persons in the IPC Arrangement and Merger		30
Date, Time and Place of the IPC US Meeting		30
Matters to Be Considered		30
Quorum and Votes Required		30
Appraisal Rights of IPC US Shareholders		30

THE ARRANGEMENT AND MERGER		33

Overview of the Arrangement and Merger		33
The Merger		35
Post Arrangement and Merger		35
Implementation of Only the Cervus Arrangement		36
Implementation of Only the IPC Arrangement		36
Fractional Shares		37
Benefits of the Arrangement and Merger for Shareholders of Vasogen and IPC US		37
Background Regarding Vasogen in respect of the Arrangement and Merger		37
Opinion of the Financial Advisor to Vasogen		40
Recommendation of the Vasogen Special Committee		40
Recommendation of the Vasogen Board		41
Recommendation of the IPC US Board		42
The Cervus Arrangement Agreement		42
The IPC Arrangement Agreement		49
Merger Agreement		54
Interests of Certain Persons in the Arrangement and Merger		55
Shareholder and Other Regulatory Approvals for the Arrangement		56
Resales of New IPC Shares		57

PROCEDURES FOR EXCHANGE BY IPC US SHAREHOLDERS		58

PROCEDURES FOR EXCHANGE BY VASOGEN SHAREHOLDERS		59

APPROVAL OF THE NEW OPTION PLAN		61

CERTAIN INFORMATION CONCERNING THE PARTIES		63

Information Concerning Vasogen		63
Information Concerning IPC US and IPC Opco		66
Organizational Chart		66
Information Concerning IPC Newco and IPC Newco US		82
Information Concerning Cervus		82

INFORMATION CONCERNING NEW IPC FOLLOWING THE ARRANGEMENT AND MERGER		82

Overview		82
Organizational Chart		83
Governance		83
Cease Trade Orders, Bankruptcies, Penalties or Sanctions		85
Conflicts of Interest		85
Capital Structure of New IPC		85
Dividend Policy		86
Outstanding Securities of New IPC Immediately Following Completion of the Arrangement and Merger		86
Executive Compensation		86
Principal Shareholders of New IPC		87
Selected Pro Forma Financial Information		87
Pro Forma Consolidated Capitalization		88
Audit Committee		88
Corporate Governance		89
Auditors		91
Transfer Agent and Registrar		91
Material Contracts		91

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR SECURITYHOLDERS		91

General		91
Holders		92

Dissent Rights		94
Optionees		95

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR SECURITYHOLDERS		96

General		96
U.S. Federal Income Tax Consequences of the Merger to U.S. Holders of IPC US Shares		97
Ownership of the New IPC Shares		98
Additional Rules that May Apply to U.S. Holders		99
U.S. Federal Income Tax Consequences of the Arrangement to U.S. Holders of Vasogen Shares		102
Information Reporting; Backup Withholding Tax		105

RISK FACTORS		105

Risks Related to the Arrangement		105
Risks Related to Vasogen’s Business		106
Risks Related to New Vasogen		106
Risks Related to IPC US’s Business		107
Additional Risks Related to the Business of New IPC		113

OTHER INFORMATION		115

Indebtedness of Directors, Officers and Employees		115
Particulars of other Matters to be Acted Upon		115
Other Material Facts		115
Interest of Informed Persons in Material Transactions		115
Auditors, Transfer Agent and Registrar		116
Additional Information		116

APPROVAL OF VASOGEN		117

APPROVAL OF IPC US		118

AUDITORS’ CONSENT		119

AUDITORS’ CONSENT		120

AUDITORS’ CONSENT		121

AUDITORS’ CONSENT		122

AUDITORS’ CONSENT		123

CONSENT OF JMP SECURITIES LLC		124

APPENDIX “A” PLAN OF ARRANGEMENT		A-1

APPENDIX “B” CERVUS ARRANGEMENT RESOLUTION		B-1

APPENDIX “C” IPC ARRANGEMENT RESOLUTION		c-1

APPENDIX “D” NEW OPTION PLAN RESOLUTION		D-1

APPENDIX “E” IPC US MERGER RESOLUTION		E-1

APPENDIX “F” FAIRNESS OPINION		F-1

APPENDIX “G” INTERIM ORDER		G-1

APPENDIX “H” NOTICE OF APPLICATION		H-1

APPENDIX “I” IPC US AUDITED FINANCIAL STATEMENTS AS AT AND FOR THE YEARS ENDED DECEMBER 31, 2006, DECEMBER 31, 2007 AND DECEMBER 31, 2008		I-1

APPENDIX “J” IPC US UNAUDITED INTERIM FINANCIAL STATEMENTS AS AT AND FOR THE SIX MONTHS ENDED JUNE 30, 2009		J-1

APPENDIX “K” PRO FORMA FINANCIAL STATEMENTS		K-1

APPENDIX “L” NEW VASOGEN AUDITED BALANCE SHEET AS AT AUGUST 27, 2009		L-1

APPENDIX “M” VASOGEN SUBCO AUDITED BALANCE SHEET AS AT AUGUST 27, 2009		M-1

APPENDIX “N” SECTION 190 OF THE CANADA BUSINESS CORPORATIONS ACT		N-1

APPENDIX “O” SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW		O-1

APPENDIX “P” NEW OPTION PLAN		P-1

APPENDIX “Q” IPC US MANAGEMENT’S DISCUSSION AND ANALYSIS		Q-1

GLOSSARY OF TERMS

The following glossary of terms used in this Joint Circular, including the Summary, but not including the Appendices, is provided for ease of reference. Unless otherwise defined or the context otherwise requires, capitalized terms used in this Joint Circular shall have the following meanings. Words importing the singular number only include the plural and vice versa and words importing any gender include all genders.

“ACB” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — General”.

“Acquisition Proposal (Cervus)” means, with respect to Cervus or Vasogen, any oral or written proposal or offer made to such Party or its unitholders or shareholders, as the case may be, from any third party with whom such Party deals at arm’s length (as such term is defined for the purposes of the Tax Act) which constitutes, or may reasonably be expected to lead to (in either case whether in one transaction or a series of transactions): (i) an acquisition from such Party or its unitholders or shareholders, as the case may be, or issuance of, any equity or debt securities of such Party (other than on exercise of currently outstanding Cervus Rights or Vasogen Rights, as applicable) or its Subsidiaries; (ii) any acquisition of the assets of such Party or its Subsidiaries (other than in the case of Vasogen, the assets to be transferred under the Divestiture Agreement); (iii) an acquisition, merger, amalgamation, reorganization, arrangement or similar transaction involving such Party or its Subsidiaries; or (iv) any take-over bid, issuer bid, exchange offer, recapitalization, liquidation, dissolution or reorganization; except for any such transaction which does not preclude, delay or have an adverse effect on the Arrangement and for greater certainty the transactions currently contemplated in the IPC Agreements that are currently reflected in the Arrangement, in the order set out in the Arrangement, do not preclude, delay or have an adverse effect on, the Arrangement.

“Acquisition Proposal (IPC)” means any written proposal or written offer made by a third party with whom Vasogen deals at arm’s length (as such term is defined for the purposes of the Tax Act) with respect to: (a) any merger, amalgamation, arrangement, business combination, liquidation, dissolution, winding up, recapitalization, distribution, share exchange, reorganization, take-over bid, tender offer or other similar transaction involving the Vasogen Companies; (b) any sale or acquisition, in any manner, directly or indirectly, of any assets of a Vasogen Company representing greater than 20% of the assets of the Vasogen Companies, taken as a whole, or generating more than 20% of the revenue of the Vasogen Companies, taken as a whole (or any lease, long-term supply agreement or other arrangement having similar economic effect to a purchase of assets of the Vasogen Companies representing greater than 20% of the assets or generating more than 20% of the revenue of the Vasogen Companies, taken as a whole); (c) any sale, acquisition or issuance, in any manner, directly or indirectly, of beneficial or registered ownership of 20% or more of the equity securities (or rights or interests therein or thereto) of Vasogen; or (d) any public announcement or other public disclosure of an intention to do any of (a), (b) or (c) or any similar transaction by any person, excluding the Arrangement or any transaction to which any IPC Company or any of its affiliates or subsidiaries is a party, and for greater certainty shall include any increase or other amendment to an Acquisition Proposal.

“affiliate” means, with respect to any specified person, any other person directly or indirectly controlling, controlled by or under common control with such specified person. For this purpose, “control” (including, with correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“allowable capital loss” has the meaning ascribed thereto in the Tax Act.

“Amalgamation” has the meaning ascribed thereto in the Summary under the heading “The Arrangement and Merger — Overview of the Arrangement and Merger — IPC Arrangement Steps”.

“Appraisal Rights” means the appraisal rights in respect of the Merger pursuant to Section 262 of the DGCL.

“Arrangement” means the arrangement under Section 192 of the CBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the Cervus Arrangement Agreement, the IPC Arrangement Agreement and in accordance with the Plan of Arrangement or made at the direction of the Court in the Final Order (which, for greater certainty, will consist of the Cervus Arrangement and the IPC Arrangement unless the transactions contemplated in one of the Cervus Arrangement or the IPC Arrangement are not completed, in which case the Arrangement will only consist of (i) the Cervus Arrangement if the transactions contemplated in the IPC Arrangement Agreement are not completed or (ii) the IPC Arrangement if the transactions contemplated in the Cervus Arrangement Agreement are not completed).

“associate” has the meaning ascribed thereto in the Securities Act (Ontario).

“Business Day” means a day on which banks are open for business in Toronto, Ontario and Wilmington, Delaware, but does not include a Saturday, Sunday and any other day which is a legal holiday in either such city.

“CBCA” means the Canada Business Corporations Act and the regulations made thereunder, as now in effect and as may be promulgated or amended from time to time.

“Cervus” means Cervus LP, a limited partnership existing under the laws of the Province of Alberta.

“Cervus Agreements” has the meaning ascribed thereto in the Plan of Arrangement.

“Cervus Arrangement” means those aspects of the Plan of Arrangement involving Vasogen, Cervus and Cervus GP as contemplated in the Cervus Arrangement Agreement to be approved pursuant to the Cervus Arrangement Resolution.

“Cervus Arrangement Agreement” means the arrangement agreement made as of August 14, 2009 between Vasogen, Cervus and Cervus GP, which is incorporated by reference into this Circular, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“Cervus Arrangement Resolution” means the special resolution of the Vasogen Shareholders approving, among other things, those aspects of the Plan of Arrangement involving Vasogen, Cervus and Cervus GP as contemplated in the Cervus Arrangement Agreement to be considered at the Vasogen Meeting, to be substantially in the form and content of Appendix “B” hereto, and any amendments or variations thereto made in accordance with the provisions of the Cervus Arrangement Agreement, made at the direction of the Court in the Interim Order, at the Vasogen Meeting or otherwise.

“Cervus Equipment Corporation New Common Shares” means the new class of common shares in the capital of Vasogen to be created pursuant to the Plan of Arrangement.

“Cervus Deferred Units” has the meaning set out in the Plan of Arrangement.

“Cervus GP” means Cervus GP Ltd., a corporation incorporated under the laws of the Province of Alberta and the general partner of Cervus.

“Cervus GP Dissent Rights” means the rights of dissent in favour of the holders of Cervus Shares in respect of the Arrangement.

“Cervus GP Required Approvals” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Cervus In-the-Money Option” means a Cervus Option with an exercise price per Cervus Unit below the Cervus Weighted Average Trading Price.

“Cervus Loan Amount” means the aggregate amount payable pursuant to the Cervus Promissory Note, which amount shall be equal to C$7,500,000.

“Cervus LP Agreement” means the limited partnership agreement for Cervus originally dated March 14, 2003, and subsequently amended and restated on each of June 7, 2004, July 7, 2007 and March 27, 2008.

“Cervus Optionholders” means the holders of Cervus Options.

“Cervus Out-of-the-Money Option” means a Cervus Option with an exercise price per Cervus Unit equal to or above the Cervus Weighted Average Trading Price.

“Cervus Promissory Note” means the promissory note of Vasogen, in an aggregate principal amount equal to the Cervus Loan Amount, to be issued in favour of Cervus pursuant to the Plan of Arrangement in consideration of the loan to Vasogen by Cervus of an amount equal to the Cervus Loan Amount.

“Cervus Required Approvals” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Cervus Rights” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Cervus Shares” means common shares in the capital of Cervus GP.

“Cervus Units” means limited partnership units in Cervus.

“Cervus Weighted Average Trading Price” shall be determined by dividing (a) the aggregate dollar trading value of all Cervus Units sold on the TSX Venture Exchange over the ten consecutive trading days ending on the third trading day next preceding the Effective Date by (b) the total number of Cervus Units sold on such stock exchange during such period.

“Change of Recommendation (IPC)” means any resolution or any agreement by the Vasogen Board to: (a) withdraw, or propose publicly to withdraw, the approval, recommendation or declaration of advisability by the Vasogen Board of the IPC Arrangement Agreement and/or the Arrangement; (b) amend, change, modify or qualify in a manner materially adverse to the IPC Companies, or propose publicly to amend, change, modify or qualify in a manner materially adverse to the IPC Companies, the approval, recommendation or declaration of advisability by the Vasogen Board of the IPC Arrangement Agreement and/or the Arrangement; or (c) recommend, or propose publicly to recommend, the approval or adoption of any Acquisition Proposal (IPC).

“CIBC Mellon” means CIBC Mellon Trust Company.

“Circular” or “Joint Circular” means this joint management information circular of Vasogen and IPC US, including the notices of meeting and all schedules, appendices and exhibits hereto.

“Claims” has the meaning ascribed thereto in the Indemnity Agreement.

“Code” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations For Securityholders — General”.

“Completion” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Court” means the Commercial List of the Ontario Superior Court of Justice.

“CRA” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — General”.

“Deadline” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Demand Notice” has the meaning ascribed thereto under the heading “Voting Information and General Proxy Matters for Vasogen Shareholders — Dissent Rights of Vasogen Shareholders”.

“Depositary” means CIBC Mellon, in its capacity as depositary for each of Vasogen and IPC US in connection with the Arrangement.

“DGCL” means the Delaware General Corporation Law, as now in effect and as may be promulgated or amended from time to time.

“Director” means the Director appointed pursuant to Section 260 of the CBCA.

“Dissent Payment” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Dissent Rights — General”.

“Dissent Rights” means the rights of dissent in favour of the Vasogen Shareholders in respect of the Arrangement.

“Dissenting Cervus GP Shareholder” means a holder of Cervus GP Shares who has duly exercised its Cervus GP Dissent Rights in respect of the Arrangement and has not withdrawn or been deemed to have withdrawn such exercise of Cervus GP Dissent Rights, but only in respect of the Cervus Shares in respect of which Cervus GP Dissent Rights are validly exercised by such holder.

“Dissenting Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Dissent Rights — General”.

“Dissenting Vasogen Shareholder” means a holder of Vasogen Shares who has duly exercised its Dissent Rights in respect of the Arrangement and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of the Vasogen Shares in respect of which Dissent Rights are validly exercised by such holder.

“Divested Assets” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Divestiture Agreement” means the divestiture agreement to be entered into between Vasogen and Vasogen Subco, and to be entered into by Cervus and New Vasogen, which provides for the assignment of the assets and assumption of the liabilities from Vasogen to Vasogen Subco (other than as specified in the Cervus Arrangement Agreement) as part of the Plan of Arrangement, in the form set out in Exhibit E to the Cervus Arrangement Agreement.

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system of the SEC.

“Effective Date” means the date upon which the Arrangement becomes effective as established by the date of issue shown on the certificate of arrangement issued by the Director pursuant to Section 192(7) of the CBCA giving effect to the Arrangement.

“Effective Time” has the meaning ascribed thereto in the Plan of Arrangement.

“Elected Amount” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Holders — IPC Share Exchange — Section 85 Election”.

“Eligible Institution” means a Canadian Schedule 1 chartered bank, a member of the Securities Transfer Agents Medallion Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of these programs are usually members of a recognized stock exchanges in Canada and the United States, members of the Investment Dealers Association of Canada, members of the Financial Industry Regulatory Authority or banks in the United States.

“Environmental Laws” has the meaning ascribed thereto in the Indemnity Agreement.

“Fairness Opinion” means the opinion letter of JMP dated August 13, 2009 addressed to the Vasogen Board confirming JMP’s opinion that the Exchange Ratio (as defined therein) in respect of the IPC Arrangement and Merger is fair, from a financial point of view, to Vasogen, a copy of which is attached to this Joint Circular as Appendix “F”.

“FDA” means the United States Food and Drug Administration.

“Final Order” means the final order of the Court approving the Arrangement, as such order may be amended by the Court at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn, as affirmed or as amended on appeal.

“Governmental Entity” means any (a) multinational, federal, national, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, ministry or agency, domestic or foreign, (b) any subdivision, agent, commission, board, or authority of any of the foregoing, (c) any quasi-governmental or private body exercising any regulatory, self regulatory, expropriation or taxing authority under or for the account of any of the foregoing, (d) any stock exchange; or (e) any domestic or foreign legislative, executive, judicial or administrative body or person purporting to have jurisdiction in the relevant circumstances.

“Grid Note” has the meaning ascribed thereto under the heading “The IPC Arrangement Agreement — The IPC Arrangement”.

“Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — General”.

“Indemnity Agreement” means the indemnity agreement to be entered into between Vasogen and New Vasogen which provides for the indemnification by each Party in favour of the other in respect of certain matters arising under the Cervus Arrangement Agreement in the form set out in Exhibit B to the Cervus Arrangement Agreement.

“insider” has the meaning ascribed thereto in the Securities Act (Ontario).

“Interim Order” means the interim order of the Court attached to this Joint Circular as Appendix “G”.

“IPC Agreements” has the meaning ascribed thereto in the Plan of Arrangement.

“IPC Arrangement” means those aspects of the Plan of Arrangement involving Vasogen, IPC US and IPC Opco as contemplated in the IPC Arrangement Agreement to be approved pursuant to the IPC Arrangement Resolution.

“IPC Arrangement Agreement” means the arrangement agreement made as of August 14, 2009 between Vasogen, IPC Opco and IPC US, which is incorporated by reference into this Circular, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“IPC Arrangement and Merger” means, together the IPC Arrangement and the Merger.

“IPC Arrangement Resolution” means the special resolution of the Vasogen Shareholders approving, among other things, those aspects of the Plan of Arrangement involving Vasogen, IPC US and IPC Opco as contemplated in the IPC Arrangement Agreement to be considered at the Vasogen Meeting, to be substantially in the form and content of Appendix “C” hereto, and any amendments or variations thereto made in accordance with the provisions of the IPC Arrangement Agreement, made at the direction of the Court in the Interim Order, at the Vasogen Meeting or otherwise.

“IPC Bridge Loan” has the meaning ascribed thereto under the heading “The IPC Arrangement Agreement — The IPC Arrangement”.

“IPC Companies” means, collectively, IPC Opco and IPC US and “IPC Company” means either one of them.

“IPC Exchange Ratio” has the meaning ascribed thereto under the heading “The Arrangement and Merger — Overview of the Arrangement and Merger —IPC Arrangement Steps”.

“IPC Letter of Transmittal” means the letter of transmittal enclosed with this Circular or otherwise made available to the IPC US Shareholders, for the use by such IPC US Shareholders in connection with the Arrangement.

“IPC Newco” means 7237081 Canada Inc., an affiliate of IPC Opco.

“IPC Newco Shares” has the meaning ascribed thereto in the IPC Arrangement Agreement.

“IPC Newco US” means 20090831 Delaware Inc., an affiliate of IPC US.

“IPC Opco Common Shares” means the common shares in the capital of IPC Opco.

“IPC Opco Convertible Voting Shares” means the convertible voting shares in the capital of IPC Opco.

“IPC Opco Exchangeable Shares” means the exchangeable shares in the capital of IPC Opco.

“IPC Opco Shares” means, collectively, the IPC Opco Common Shares, the IPC Opco Convertible Voting Shares and the IPC Opco Exchangeable Shares.

“IPC Share Exchange” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — IPC Share Exchange”.

“IPC US Board” means the board of directors of IPC US.

“IPC US Common Shares” means the shares in the common stock of IPC US.

“IPC US Meeting” means the meeting of IPC US Shareholders, including any adjournment or postponement thereof, to be called to consider the IPC US Merger Resolution.

“IPC US Merger Resolution” means the resolution of the IPC US Shareholders approving the Merger Agreement and the Merger to be considered at the IPC US Meeting, to be substantially in the form and content of Appendix “E” hereto, and any amendments or variations thereto made in accordance with the provisions of the IPC Arrangement Agreement.

“IPC US Option” means an incentive option or non-statutory option to purchase common shares of IPC US granted pursuant to the IPC US Stock Option Plan and/or the terms of a stock option agreement, including for greater certainty the 5,000,000 performance based options issued to Drs. Isa and Amina Odidi and the compensation option issuable in connection with the IPC Arrangement. See “Certain Information Concerning the Parties — Information Concerning IPC US and IPC Opco — Stock Options”.

“IPC US Preferred Shares” means the shares in the preferred stock of IPC US.

“IPC US Shareholders” means the holders of IPC US Shares.

“IPC US Shares” means the IPC US Preferred Shares, including the IPC US Special Voting Shares, and the IPC US Common Shares.

“IPC US Special Voting Shares” means the special voting shares in the capital of IPC US, which constitute part of the IPC US Preferred Shares.

“IPC US Stock Option Plan” means the stock option plan of IPC US, as amended.

“Jersey Transfer” means Jersey Transfer & Registrar Company, the registrar and transfer agent for the IPC US Shares.

“JMP” means JMP Securities LLC.

“Mark-to-Market Election” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Additional Rules that May Apply to U.S. Holders— Passive Foreign Investment Company”.

“Matching Period” has the meaning ascribed thereto under the heading “The Arrangement and Merger — The IPC Arrangement Agreement — Covenants of Vasogen Regarding the Acquisition Proposals (IPC) and IPC Companies Right to Match”.

“Material Adverse Change” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Material Adverse Effect” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Merger” means the merger of IPC Newco US with and into IPC US pursuant to the IPC US Merger Agreement.

“Merger Agreement” means the agreement and plan of merger between IPC US, IPC Newco US, IPC Newco and New Vasogen dated September 15, 2009, the form of which Merger Agreement was attached to the IPC Arrangement Agreement as Schedule D thereto, as the same may be amended, supplemented and modified from time to time in accordance with its terms.

“Merger Effective Time” has the meaning ascribed thereto under the heading “Voting Information and General Proxy Matters for IPC US Shareholders — Appraisal Rights of IPC US Shareholders”.

“NASDAQ” means the NASDAQ Capital Market.

“Net Cash” has the meaning ascribed to such term in the IPC Arrangement Agreement.

“New IPC” means IntelliPharmaCeutics International Inc., a corporation to be amalgamated under the laws of Canada and resulting from the amalgamation of New Vasogen and IPC Newco pursuant to the Arrangement.

“New IPC Option” has the meaning ascribed thereto in the IPC Arrangement Agreement.

“New IPC Share” has the meaning ascribed thereto in the IPC Arrangement Agreement.

“New IPC Warrants” has the meaning ascribed thereto in the IPC Arrangement Agreement.

“New Option Plan” means the stock option plan to be adopted by New IPC (or New Vasogen if only the Cervus Arrangement is completed) substantially in the form and having substantially the content of Appendix “P” to this Joint Circular, and any amendments or variations thereto made in accordance with the provisions of the IPC Arrangement Agreement, if applicable.

“New Option Plan Resolution” means the resolution of the Vasogen Shareholders approving, among other things, the New Option Plan to be considered at the Vasogen Meeting to be substantially in the form and content of Appendix “D” hereto, and any amendments or variations thereto made at the direction of the Court in the Interim Order, at the Vasogen Meeting or otherwise.

“New Vasogen” means 7231971 Canada Inc., a subsidiary of Vasogen.

“New Vasogen Options” means the options to purchase common shares of New Vasogen to be issued to former holders of Vasogen Options under the Arrangement.

“New Vasogen Shares” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“New Vasogen Warrants” means the common share purchase warrants to purchase New Vasogen Shares to be issued by New Vasogen.

“Non-Resident Dissenter” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Dissent Rights — Dissenting Holders Not Resident in Canada”.

“Non-Resident Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Holders — Holders Not Resident in Canada”.

“Non-Resident Optionee” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Optionees”.

“Notice Date” has the meaning ascribed thereto under the heading “The Arrangement and Merger — The IPC Arrangement Agreement — Covenants of Vasogen Regarding the Acquisition Proposals (IPC) and IPC Companies Right to Match”.

“Notice of Objection” has the meaning ascribed thereto under the heading “Voting Information and General Proxy Matters for Vasogen Shareholders — Dissent Rights of Vasogen Shareholders”.

“Notice of Resolution” has the meaning ascribed thereto under the heading “Voting Information and General Proxy Matters for Vasogen Shareholders — Dissent Rights of Vasogen Shareholders”.

“Offer to Purchase” has the meaning ascribed thereto under the heading “Voting Information and General Proxy Matters for Vasogen Shareholders — Dissent Rights of Vasogen Shareholders”.

“Optionee” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — General”.

“OTCBB” means the Over-the-Counter Bulletin Board electronic quotation system, a decentralized market regulated by the Financial Industry Regulatory Authority that displays quotes, last-sale prices, and volume information in over-the-counter equity securities.

“Other Party” has the meaning ascribed thereto under the heading “The Cervus Arrangement Agreement — Covenants Regarding Non-Solicitation”.

“Party” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“person” includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund, limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status.

“PFIC” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Ownership of the New IPC Shares — Distributions on New IPC Shares — General Taxation of Distributions”.

“Plan of Arrangement” means the plan of arrangement, substantially in the form and having substantially the content of Appendix “A” to this Joint Circular and any amendments or variations thereto made in accordance with the Cervus Arrangement Agreement and the IPC Arrangement Agreement or made at the direction of the Court in the Final Order (which for greater certainty, may include amendments to exclude (i) the IPC Arrangement in accordance with section 6.1(b) of the Cervus Arrangement Agreement if the IPC Arrangement will not be completed as contemplated therein or (ii) the Cervus Arrangement in accordance with section 2.3 of the IPC Arrangement Agreement if the Cervus Arrangement will not be completed as contemplated therein).

“QEF Election” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Additional Rules that May Apply to U.S. Holders— Passive Foreign Investment Company”.

“QFC” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Ownership of the New IPC Shares — Distributions on New IPC Shares — Reduced Tax Rates for Certain Dividends”.

“Receiving Party” has the meaning ascribed thereto under the heading “The Arrangement and Merger — The Cervus Arrangement Agreement — Covenants Regarding Non-Solicitation”.

“Regulation S” means Regulation S under the U.S. Securities Act.

“Regulatory Approvals (IPC)” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities as set forth in the IPC Arrangement Agreement.

“Reorganization” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Exchange of Shares for the New IPC Shares”.

“Resident Dissenter” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Dissent Rights — Dissenting Holders Resident in Canada”.

“Resident Holder” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Holders — Holders Resident in Canada”.

“Resident Optionee” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Optionees — Optionees Resident in Canada”.

“Responding Party” has the meaning ascribed thereto under the heading “The Arrangement and Merger — The Cervus Arrangement Agreement — Covenants Regarding Non-Solicitation”.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act (Ontario) and the rules, regulations and published policies made thereunder, as now in effect and as they may be promulgated or amended from time to time.

“Securities Laws” means the Securities Act, all other applicable Canadian provincial securities laws, rules and regulations and published policies thereunder and all applicable securities laws, rules and regulations and published policies thereunder in the United States.

“SEDAR” means the System for Electronic Document Analysis and Retrieval of the Canadian Securities Administrators.

“Shareholder Note” has the meaning ascribed to such term under the heading “The Arrangement and Merger — The IPC Arrangement Agreement — Conditions to Closing”.

“subsidiary” means, with respect to a specified person, any person of which at least 50% of the voting power ordinarily entitled to elect a majority of the board of directors thereof (whether or not shares of any other class or classes shall or might be entitled to vote upon the happening of any event or contingency) are at the time owned directly or indirectly by such specified person and shall include any person over which such specified person exercises direction or control or which is in a like relation to a subsidiary.

“Superior Proposal (IPC)” means a bona fide Acquisition Proposal (IPC) to acquire not less than 90% of Vasogen’s issued and outstanding shares (or all or substantially all of the assets of the Vasogen Companies) that the Vasogen Board determines in good faith, after consultation with its financial and outside legal advisors, is a transaction (a) that is reasonably capable of being completed without undue delay, taking into account all financial, legal, regulatory and other aspects of such Acquisition Proposal (IPC) and the person making such Acquisition Proposal (IPC), (b) that is on terms and conditions more favourable, from a financial point of view, to the holders of Vasogen’s issued and outstanding shares than the terms and conditions of the transaction contemplated by this Agreement (after giving effect to any changes to the financial terms of this Agreement proposed by the IPC Companies in response to such Acquisition Proposal (IPC)), (c) that is not subject to any due diligence condition, and (d) in respect of which any required financing to complete such Acquisition Proposal (IPC) has been demonstrated to the satisfaction of the Vasogen Board to be likely to be obtained.

“Tax Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time.

“Tax Election Package” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders —Holders — IPC Share Exchange — Section 85 Election”.

“Tax Pool Claims” has the meaning ascribed thereto in the Indemnity Agreement.

“Tax Pools” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Tax Return of Vasogen” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“taxable capital gain” has the meaning ascribed thereto in the Tax Act.

“Taxes of Vasogen” has the meaning ascribed thereto in the Indemnity Agreement.

“Termination Fee” has the meaning ascribed thereto under the heading “The Arrangement and Merger — The Cervus Arrangement Agreement — Expenses and Termination Fees”.

“Transferred Liabilities” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Treasury” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — Ownership of the New IPC Shares — Distributions on New IPC Shares — Reduced Tax Rates for Certain Dividends”.

“TSX” means the Toronto Stock Exchange.

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“U.S. Holder” has the meaning ascribed thereto under the heading “Certain United States Federal Income Tax Considerations for Securityholders — General”.

“U.S. person” has the meaning ascribed to it in Rule 902(k) of the U.S. Securities Act.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

“United States” and “U.S.” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.

“Vasogen 2005 Warrants” has the meaning ascribed thereto in the Plan of Arrangement.

“Vasogen 2006-7 Warrants” has the meaning ascribed thereto in the Plan of Arrangement.

“Vasogen Board” means the board of directors of Vasogen.

“Vasogen Companies” means, collectively, Vasogen and the Vasogen Subsidiaries, and “Vasogen Company” means any one of them.

“Vasogen Director Stock Option Plan” means the director stock option plan of Vasogen, as amended.

“Vasogen Disclosure Letter” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Vasogen DSUP” means the deferred share unit plan of Vasogen, as amended.

“Vasogen DSUs” means the directors’ deferred share units, whether or not vested, issued pursuant to the Vasogen DSUP that are outstanding immediately prior to the Effective Date.

“Vasogen Employee Stock Option Plan” means the employee stock option plan of Vasogen and its predecessor, each as amended.

“Vasogen Exchange Ratio” has the meaning ascribed thereto in the Summary under the heading “The Arrangement and Merger — Overview of the Arrangement and Merger — IPC Arrangement Steps”.

“Vasogen Ireland” means Vasogen Ireland Limited, a corporation incorporated under the laws of Ireland.

“Vasogen Letter of Transmittal” means the letter of transmittal enclosed with this Circular or otherwise made available to the Vasogen Shareholders, for the use by such Vasogen Shareholders in connection with the Arrangement.

“Vasogen Meeting” means the special meeting of Vasogen Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Cervus Arrangement Resolution and the IPC Arrangement Resolution and such other business as is contemplated in this Circular and as may be properly brought before Vasogen Shareholders at such special meeting.

“Vasogen Option” means an option to purchase common shares of Vasogen granted under the Vasogen Employee Stock Option Plan and the Vasogen Director Stock Option Plan.

“Vasogen Redeemable Shares” means the redeemable shares in the capital of Vasogen created pursuant to the Plan of Arrangement.

“Vasogen Rights” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Vasogen Share Exchange” has the meaning ascribed thereto under the heading “Certain Canadian Federal Income Tax Considerations for Securityholders — Holders — Vasogen Share Exchange”.

“Vasogen Shareholders” means the holders of Vasogen Shares.

“Vasogen Shares” means common shares in the capital of Vasogen.

“Vasogen Subco” means 7232004 Canada Inc., a subsidiary of Vasogen.

“Vasogen Subco Shares” has the meaning ascribed thereto in the Cervus Arrangement Agreement.

“Vasogen Subsidiaries” means, collectively, Vasogen Ireland, Vasogen US, New Vasogen and Vasogen Subco.

“Vasogen US” means Vasogen Corp., a corporation incorporated under the laws of the State of Delaware.

“Vasogen Warrants” means, collectively, the Vasogen 2005 Warrants and the Vasogen 2006-7 Warrants.

NOTICE TO UNITED STATES SHAREHOLDERS OF VASOGEN AND IPC US

This solicitation of proxies by Vasogen and IPC US is not subject to the requirements of Section 14(a) of the U.S. Exchange Act. This Joint Circular has been prepared in accordance with disclosure requirements applicable in Canada. United States shareholders of Vasogen and IPC US should be aware that such requirements are different from those of the United States applicable to registration statements under the U.S. Securities Act and proxy statements under the U.S. Exchange Act.

The securities of New Vasogen to be issued pursuant to the Cervus Arrangement and the securities of New IPC to be issued pursuant to the IPC Arrangement and Merger are, in each case, securities of a Canadian corporation. This Joint Circular is subject to disclosure requirements of a foreign country that are different from those of the United States. The historical financial information for Vasogen incorporated by reference in this Joint Circular is presented in Canadian dollars and has been prepared in accordance with Canadian generally accepted accounting principles, which differ from United States generally accepted accounting principles in certain material respects as disclosed in Vasogen’s financial statements incorporated by reference herein. The historical financial information for IPC US included in this Joint Circular as Appendices “I” and “J” is presented in U.S. dollars and has been prepared in accordance with United States generally accepted accounting principles, which differ from Canadian generally accepted accounting principles in certain material respects and may not be comparable to the financial statements of Canadian corporations.

The New IPC Shares to be issued under the Arrangement and the related transactions have not been registered under the U.S. Securities Act and are being issued in reliance upon the exemption from registration requirements set forth in Section 3(a)(10) thereof. The New IPC Shares may or may not be listed for trading on any United States stock exchange or the OTCBB. The New IPC Shares received under the Arrangement by persons who, immediately prior to the Arrangement, were “affiliates” (generally, controlling persons or members of a control group) of Vasogen, IPC Opco or IPC US, or who are “affiliates” of New IPC, are subject to restrictions on resale of their New IPC Shares under the U.S. Securities Act. See “Resales of New IPC Shares — United States Securities Laws”.

Vasogen shareholders resident in the United States should be aware that the issuance of shares of New Vasogen upon exchange of the Vasogen shares pursuant to the Cervus Arrangement and the issuance of the shares of New IPC upon exchange of the shares of New Vasogen pursuant to the IPC Arrangement and Merger as described herein may have tax consequences both in the United States and in Canada. Vasogen shareholders are urged to consult their own tax advisors regarding the specific tax consequences to them of the Cervus Arrangement and the IPC Arrangement and Merger, including the applicability and effect of United States federal, state, local and foreign income and other tax laws in their particular circumstances.

IPC US Shareholders should be aware that the issuance of shares of New IPC upon conversion or exchange of the IPC US shares pursuant to the IPC Arrangement and Merger as described herein may have tax consequences both in the United States and in Canada. IPC US Shareholders are urged to consult their own tax advisors regarding the specific tax consequences to them of the Arrangement and the Merger, including the applicability and effect of United States federal, state, local and foreign income and other tax laws in their particular circumstances. See “Certain Canadian Federal Income Tax Considerations for Securityholders” and also see “Certain United States Federal Income Tax Considerations for Securityholders” for certain information concerning tax consequences of the Arrangement for shareholders who are United States taxpayers.

It may be difficult for you to enforce your rights and any claim you may have arising under United States securities laws, since Vasogen, New IPC, IPC Opco and other related corporations are located in Canada and some or all of their respective officers and directors may be residents of Canada or a foreign country. You may not be able to sue a Canadian corporation or its officers or directors in a foreign court for violations of the United States securities laws. It may be difficult to compel a Canadian corporation and its affiliates to subject themselves to the judgment of a United States court.

THE NEW IPC SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR SECURITIES REGULATORY AUTHORITIES OF ANY STATE OF THE UNITED STATES, NOR HAS THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR SECURITIES REGULATORY AUTHORITIES OF ANY STATE OF THE UNITED STATES PASSED ON THE ADEQUACY OR ACCURACY OF THIS JOINT CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Exchange Rates

In this document, unless otherwise specified, all references to “dollars”, “$” or “C$” are to Canadian dollars and all references to “U.S. dollars” or to “U.S.$” are to United States dollars.

On August 14, 2009, the last trading day before the announcement of the Arrangement, the rate of exchange was C$1.0998 equals U.S.$1.00, based on the noon rate of exchange as quoted by the Bank of Canada.

The closing low, high and noon spot rates for the U.S. dollar in terms of Canadian dollars at the end of each of the three years ended December 31, 2008 and between January 1 and September 16 of 2009, as reported by the Bank of Canada were as follows:

Canadian Dollar Per U.S. Dollar	January 1, 2009 to September 16, 2009 ($)	Year Ended December 31, 2008 ($)	Year Ended December 31, 2007 ($)	Year Ended December 31, 2006 ($)
Closing Low for the Period	1.0663	0.9719	0.9170	1.099
Closing High for the Period	1.3000	1.2969	1.1853	1.1726
Noon Spot Rate on last day of period	1.0663	1.2246	0.9881	1.1653

DOCUMENTS INCORPORATED BY REFERENCE

The following publicly filed documents of Vasogen are incorporated by reference in, and form part of, this Joint Circular:

1. Vasogen’s annual information form dated February 26, 2009;

2. Vasogen’s audited financial statements as at and for the years ended November 30, 2008 and 2007, together with the auditors’ report thereon and management’s discussion and analysis filed in connection with those audited financial statements;

3. Vasogen’s unaudited interim financial statements as at and for the six months ended May 31, 2009 and 2008, together with management’s discussion and analysis filed in connection with those unaudited interim financial statements;

4. Vasogen’s management information circular dated April 27, 2009 in respect of the annual and special meeting of Vasogen’s shareholders; and

5. Vasogen’s material change report dated August 24, 2009 and the conformed copies of the Cervus Arrangement Agreement and the IPC Arrangement Agreement filed concurrently with such material change report.

Any document of the type referred to in the preceding paragraph, including any material change reports (excluding confidential reports), any unaudited interim financial statements for interim periods following May 31, 2009 (together with any management’s discussion and analysis filed in connection therewith) and any management information circulars (including any amendments or supplements to this Joint Circular), and any business acquisition report, in each case filed by Vasogen with any securities regulatory authority in any province or territory of Canada after the date of this Joint Circular and prior to the Effective Date, will be deemed to be incorporated by reference into this Joint Circular. Copies of these documents and all the other public filings of Vasogen may be obtained at www.sedar.com or upon request and without charge from the Chief Financial Officer of Vasogen at 4 Robert Speck Parkway, 15th Floor, Mississauga, Ontario, Canada L4Z 1S1, facsimile (905) 847-6270.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Joint Circular to the extent that a statement contained herein, or in any other subsequently filed document, which also is or is deemed to be incorporated by reference herein, modifies or supersedes that statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Joint Circular.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Joint Circular includes and incorporates statements that are prospective in nature that constitute “forward-looking information” within the meaning of applicable Canadian and United States securities laws. All statements, other than statements of historical fact, included in this document that address activities, events or developments that Vasogen or the IPC Companies expect or anticipate will or may occur in the future are forward-looking statements. When used in this document, words such as “will”, “plans”, “intends”, “outlook”, “expects”, “anticipates”, “project”, “continues” “estimates”, “believes”, “should” and similar expressions are intended to identify statements containing forward-looking information.

Forward-looking information is based on current expectations and assumptions and is influenced by Vasogen’s and the IPC Companies’ historical experience, perception of trends and current business conditions, expected future developments and other factors which Vasogen and the IPC Companies consider appropriate. Forward-looking information involves known and unknown risks and uncertainties and other factors which may cause or contribute to actual results of Vasogen and the IPC Companies that are materially different from any future results, performance or achievements expressed or implied by such forward-looking information, including, but not limited to, risks and uncertainties related to the proposed Cervus Arrangement and the proposed IPC Arrangement and Merger, as well as those risk factors listed in Vasogen’s public filings with Canadian securities regulators filed on SEDAR and on EDGAR. For a further description of these and other factors that could cause actual results to differ materially from the forward-looking information included in or incorporated by reference into this Joint Circular, see the risk factors discussed under “Risk Factors” in this Joint Circular as well as those risks and uncertainties discussed in Vasogen’s annual information form dated February 26, 2009, Vasogen management’s discussion and analysis for the year ended November 30, 2008 and for the interim period ended May 31, 2009 and IPC US management’s discussion and analysis for the years ended December 31, 2007 and December 31, 2008 and for the interim period ended June 30, 2009. These factors should not be considered as exhaustive. The reader is cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. Forward-looking information contained in this Joint Circular is based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions regarding: (i) approval of the Cervus Arrangement Resolution and the IPC Arrangement Resolution at the Vasogen Meeting, approval of the IPC US Merger Resolution at the IPC US Meeting and approval of the Arrangement by the Court which will consider the fairness of the terms and conditions of the transaction; (ii) completion of the Arrangement and Merger substantially on the terms set out in the Arrangement Agreement and Merger Agreement, including satisfaction or waiver by the parties of the conditions contained therein; (iii) realization of the anticipated benefits of the Arrangement and Merger as disclosed in this Joint Circular; and, (iv) execution by New IPC of IPC Opco’s business plan as disclosed in this Joint Circular, including the timely development and commercialization of its pipeline products and the receipt of, and the costs of obtaining, all necessary regulatory consents in that regard.

Readers are cautioned that neither Vasogen nor the IPC Companies can assure that the plan, intention or expectations upon which the forward-looking information in this Joint Circular is based will occur. The actual results achieved will vary from the information provided herein and that such variations may be material. Consequently, there is no representation by Vasogen or the IPC Companies that actual results achieved will be the same in whole or in part as those set out in or implied by the forward-looking information. Furthermore, statements containing forward-looking information that are included in this Joint Circular or incorporated by reference, as applicable, in this Joint Circular are made as of the date on which such statements are made, and each of Vasogen and the IPC Companies undertakes no obligation, except as required by applicable securities legislation, to update publicly or to revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information included and incorporated by reference herein is expressly qualified in its entirety by this cautionary statement.

SUMMARY

The following is a summary of certain information contained in this Joint Circular and may not contain all of the information that is important to Vasogen Shareholders and IPC US Shareholders. The summary is not intended to be complete and is qualified in its entirety by the more detailed information and financial data contained and incorporated by reference in this Joint Circular. Vasogen Shareholders and IPC US Shareholders should carefully read the entire document and the other documents incorporated by reference herein for a more complete understanding of the Arrangement and Merger. Capitalized words and terms in this summary have the same meanings as set forth in the Glossary.

The Meetings

Date, Time and Place of the Meetings

Vasogen

The Vasogen Meeting will be held at 10:00 a.m. (Eastern Time) on October 19, 2009 at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington Street West, Toronto, Ontario, Canada, subject to any postponement or adjournment thereof.

IPC US

The IPC US Meeting will be held at 11:30 a.m. (Eastern Time) on October 19, 2009 at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, 66 Wellington St. West, Toronto, Ontario, Canada, subject to any postponement or adjournment thereof.

Purpose of the Meetings

Vasogen

The purpose of the Vasogen Meeting is to consider and, if deemed advisable, to pass the Cervus Arrangement Resolution, the IPC Arrangement Resolution, the New Option Plan Resolution and transact such other business as may properly come before the Vasogen Meeting or any postponement or adjournment thereof.

IPC US

The purpose of the IPC US Meeting is to consider and, if deemed advisable, to pass the IPC US Merger Resolution and transact such other business as may properly come before the IPC US Meeting or any postponement or adjournment thereof.

Shareholder Votes Required

Vasogen

Approval of the Cervus Arrangement Resolution and the IPC Arrangement Resolution each requires the affirmative vote of at least 662/3% of the total votes cast by Vasogen Shareholders present (in person or by proxy) and entitled to vote at the Vasogen Meeting. Approval of the New Option Plan Resolution requires the affirmative vote of a majority of the total votes cast by Vasogen Shareholders present (in person or by proxy), excluding the votes of insiders entitled to receive a benefit under the New Option Plan, and entitled to vote at the Vasogen Meeting. See “Voting Information and General Proxy Matters for Vasogen Shareholders — Quorum and Votes Required”.

IPC US

Approval of the IPC US Merger Resolution requires the affirmative vote of holders of a majority of each class of IPC US Shares entitled to vote at the IPC US Meeting, voting as separate classes.

Certain IPC US Shareholders have entered into agreements pursuant to which they have agreed to vote any IPC US Shares he or she holds in favour of the IPC US Merger Resolution. These IPC US Shareholders own, in the aggregate, approximately 60% of the issued and outstanding IPC US Common Shares and 100% of the issued and outstanding IPC US Special Voting Shares and accordingly, represent sufficient votes to assure the approval of the IPC US Merger Resolution at the IPC US Meeting. See “Voting Information and General Proxy Matters for IPC US Shareholders — Quorum and Votes Required” and “Voting Information and General Proxy Matters for IPC US Shareholders — Approval Agreements”.

Who Can Vote at the Meetings

Vasogen

Only Vasogen Shareholders of record at the close of business on September 4, 2009 are entitled to notice of and to vote at the Vasogen Meeting and any adjournment or postponement thereof. At the close of business on September 3, 2009, there were 22,623,195 issued and outstanding Vasogen Shares. Each Vasogen Share entitles the holder thereof to one vote on each matter presented at the Vasogen Meeting. See “Voting Information and General Proxy Matters for Vasogen Shareholders”.

IPC US

Only IPC US Shareholders of record at the close of business on September 21, 2009 are entitled to receive notice of and to vote at the IPC US Meeting and any adjournment or postponement thereof. At the close of business on the date hereof, 6,023,944 IPC US Common Shares and 10,850,000 IPC US Special Voting Shares were issued and outstanding. Each IPC US Common Share and each IPC US Special Voting Share entitles the holder thereof to one vote on each matter presented at the IPC US Meeting. See “Voting Information and General Proxy Matters for IPC US Shareholders”.

Dissent Rights of Vasogen Shareholders

Under Section 190 of the CBCA, registered holders of Vasogen Shares have the right to dissent in respect of the Cervus Arrangement and the IPC Arrangement Resolution and, if the Plan of Arrangement becomes effective, to be paid the fair value of their Vasogen Shares in accordance with Section 190 of the CBCA. This right of dissent is described in this Joint Circular under the heading “Voting Information and General Proxy Matters for Vasogen Shareholders — Dissent Rights of Vasogen Shareholders”. Failure by a Vasogen Shareholder who wishes to dissent to strictly comply with the dissent procedures under the CBCA may result in the loss or unavailability of any right of dissent. Beneficial owners of Vasogen Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent should be aware that they are not entitled to exercise rights of dissent directly. A beneficial owner of Vasogen Shares that wishes to exercise the right to dissent should immediately contact the broker, custodian, nominee or other intermediary with whom he or she deals in respect of these Vasogen Shares.

Appraisal Rights of IPC US Shareholders

Under Section 262 of the DGCL, registered holders of IPC US Shares have an appraisal right, if the Merger becomes effective, to be paid the fair value of their IPC US Shares in accordance with Section 262 of the DGCL. This appraisal right is described in this Joint Circular under the heading “Voting Information and General Proxy Matters for IPC US Shareholders — Appraisal Rights of IPC US Shareholders”. Failure by an IPC US shareholder to strictly comply with the appraisal right procedures under the DGCL may result in the loss or unavailability of any appraisal right. Beneficial owners of IPC US Shares registered in the name of a broker, custodian, nominee or other intermediary should be aware that they are not entitled to exercise appraisal rights directly. A beneficial owner of IPC US Shares that wishes to exercise the appraisal right should immediately contact the broker, custodian, nominee or other intermediary with whom he or she deals in respect of these IPC US Shares.

Interests of Certain Persons in the Arrangement and Merger

Vasogen Directors and Officers

Certain directors and senior officers of Vasogen have interests in the Arrangement that are different than the interests of Vasogen Shareholders generally. These interests relate primarily to the appointment of a Vasogen director to the board of New IPC following completion of the Arrangement, the potential appointment of one or more Vasogen officers as officers, employees of and/or consultants to New IPC, the triggering of run-off directors’ and officers’ liability insurance purchased by Vasogen for the benefit of the current and former directors and officers of Vasogen and the fact that the Arrangement and the Merger may entitle certain officers of and a former consultant to Vasogen to certain compensation that may be received upon completion of the Arrangement in accordance with the terms of their consulting agreements.

For details in respect of the above-referenced interests, see “The Arrangement and Merger — Vasogen Directors and Officers — Interests of Certain Persons in the Arrangement and Merger”.

IPC US Directors and Officers

Certain directors and senior officers of IPC US have interests in the Arrangement and the Merger that are different than the interests of IPC US Shareholders generally. These interests relate primarily to the appointment of certain IPC US directors and officers as directors and officers of New IPC following completion of the Arrangement and the Merger and to the issuance of certain directors and officers of options exercisable for shares of New IPC and, upon the completion of the Cervus Arrangement, to the possible repayment of a portion of the principal amount of up to $1,000,000 in respect of certain loans made by certain officers and directors to the IPC Companies.

For details in respect of the above-referenced interests, see “The IPC US Directors and Officers — Arrangement and Merger — Interests of Certain Persons in the Arrangement and Merger”.

The Arrangement and Merger

Overview of the Arrangement and Merger

If the Cervus Arrangement Resolution, the IPC Arrangement Resolution and the IPC US Merger Resolution are passed, and all other conditions to the closing of the Arrangement and the Merger are satisfied or waived, the Arrangement will be implemented by way of a Court-approved plan of arrangement under the CBCA. Pursuant to the Plan of Arrangement, at the Effective Time, the following transactions, among others, will occur:

(a) at the Effective Time, the Vasogen Shares held by Dissenting Vasogen Shareholders will be transferred to Vasogen and such Dissenting Vasogen Shareholders shall cease to be the holders of Vasogen Shares and to have any rights as holders of Vasogen Shares other than the right to be paid fair value for such Vasogen Shares by New Vasogen;

Cervus Arrangement Steps

(b) one minute following the Effective Time, the Cervus Shares held by Dissenting Cervus GP Shareholders will be transferred to Cervus GP and such Dissenting Cervus GP Shareholders shall cease to be the holders of such Cervus Shares and to have any rights as holders of Cervus Shares other than the right to be paid fair value for such Cervus Shares by Cervus GP;

(c) two minutes following the Effective Time, the Cervus LP Agreement shall be amended to the extent necessary to facilitate the Arrangement and the implementation of the steps and transactions described in the Plan of Arrangement;

(d) three minutes following the Effective Time, Vasogen shall transfer, assign and convey the Divested Assets to Vasogen Subco and, in consideration thereof, Vasogen Subco shall assume the Transferred Liabilities as well as issue to Vasogen 100 Vasogen Subco Shares pursuant to the Divestiture Agreement;

(e) four minutes following the Effective Time, the initial New Vasogen Share issued to Vasogen shall be transferred to New Vasogen without consideration and, upon such transfer, such New Vasogen Share shall be immediately cancelled;

(f) five minutes following the Effective Time, each Vasogen Share (excluding those held by Dissenting Vasogen Shareholders) shall be transferred to New Vasogen in exchange for the issuance of one New Vasogen Share;

(g) six minutes following the Effective Time,

(i) New Vasogen will adopt the New Vasogen Option Plan;

(ii) each outstanding Vasogen Option will be exchanged for New Vasogen Options on the basis of one New Vasogen Option for each Vasogen Option held and the exercise price per New Vasogen Share will be determined as specified in the Plan of Arrangement;

(iii) each Vasogen 2005 Warrant will be transferred to Vasogen and cancelled in exchange for the payment by New Vasogen to each holder of such Vasogen 2005 Warrants of U.S.$0.021 multiplied by the number of Vasogen Shares to which such Vasogen 2005 Warrants relate;

(iv) each of the Vasogen 2006-7 Warrants will become New Vasogen Warrants on the basis of one New Vasogen Warrant for each Vasogen 2006-7 Warrant held; and

(v) each of the Vasogen DSUs will be exercised for such number of New Vasogen Shares on the basis as if they had been exercised for Vasogen Shares that the holder would have been entitled to as is determined under the Vasogen DSUP;

(h) seven minutes following the Effective Time, Cervus shall loan to Vasogen the Cervus Loan Amount and Vasogen will issue and deliver to Cervus the Cervus Loan Promissory Note;

(i) eight minutes following the Effective Time, Vasogen will subscribe for such number of Vasogen Subco Shares as there are Vasogen Shares outstanding as at such time, in consideration for the Cervus Loan Amount;

(j) nine minutes following the Effective Time, the articles of Vasogen will be amended, among other things, to (i) change the name of Vasogen to “Cervus Equipment Corporation”; (ii) amend the Vasogen Shares to become the “Vasogen Redeemable Shares”; (iii) create an unlimited number of the “Cervus Equipment Corporation New Common Shares”, a new class of common shares of Vasogen; (iv) create an unlimited number of “Preferred Shares”, a new class of preferred shares of Vasogen issuable in series; (v) designate that the rights, privileges, conditions and restrictions attaching to such share classes;

(k) ten minutes following the Effective Time, the Cervus Units shall be transferred to Vasogen in exchange for Cervus Equipment Corporation New Common Shares issued on the basis of three Cervus Equipment Corporation New Common Shares for each two Cervus Units transferred;

(l) eleven minutes after the Effective Time, the Cervus Shares (excluding those held by Dissenting Cervus GP Shareholders) shall be transferred to Vasogen in exchange for $1.00 per Cervus GP Share so transferred;

(m) twelve minutes after the Effective Time, each Cervus Out-of-the-Money Option shall be transferred to Cervus and cancelled in exchange for the payment by Cervus to each Cervus Optionholder of $0.001 multiplied by the number of Cervus Units to which the Cervus Optionholder’s Cervus Out-of-the-Money Options relate;

(n) thirteen minutes after the Effective Time, each Cervus In-the-Money Option shall be transferred to Cervus and cancelled in exchange for an option to acquire Cervus Equipment Corporation New Common Shares, the terms of which shall effectively entitle the holder upon exercise to receive, for the same aggregate consideration and at the same time in relation to the Cervus In-the-Money Option, the aggregate number Cervus Equipment Corporation New Common Shares, such holder would have otherwise been entitled to receive, if on the Effective Date, the holder had been the registered holder of the number of Cervus Units to which such holder was entitled to subscribe for and purchase pursuant to the Cervus In-the-Money Option;

(o) fourteen minutes after the Effective Time, each three Cervus Deferred Units shall be exchanged for two Cervus Corporation Deferred Share Rights;

(p) fifteen minutes after the Effective Time, the incumbent directors of Vasogen will, and will be deemed to, have resigned and be replaced, as directors by the directors of Cervus GP;

(q) sixteen minutes following the Effective Time, Vasogen will redeem the Vasogen Redeemable Shares and the redemption price of the Vasogen Redeemable Shares will be satisfied by Vasogen distributing all of the Vasogen Subco Shares at a rate of one Vasogen Subco Share for each Vasogen Redeemable Shares;

(r) seventeen minutes following the Effective Time, Vasogen Subco shall be wound-up and shall transfer to New Vasogen all of its property, liabilities and assets;

(s) eighteen minutes following the Effective Time, Vasogen Subco will be dissolved;

(t) the auditors of Vasogen will be KPMG LLP;

IPC Arrangement Steps

(u) nineteen minutes following the Effective Time:

(i) all of the IPC US Special Voting Shares shall be transferred to IPC Newco in exchange for one IPC Newco Share; and

(ii) all of the IPC Opco Convertible Voting Shares shall be transferred to IPC Newco in exchange for IPC Newco Shares having a fair market value equal to the value of the exchanged IPC Opco Convertible Voting Shares on the basis of one IPC Newco Share for each IPC Opco Convertible Voting Share so transferred;

(v) twenty minutes following the Effective Time the IPC US Common Shares held by Canadian resident shareholders shall be transferred to IPC Newco in exchange for IPC Newco Shares having a fair market value equal to the value of the exchanged IPC US Common Shares on the basis of one IPC Newco Share for each IPC US Common Share so transferred;

(w) twenty-one minutes after the Effective Time IPC Newco and New Vasogen shall be amalgamated (the “Amalgamation”) and, shall continue as New IPC with the name of “IntelliPharmaCeutics International Inc.” and on the Amalgamation, among other things:

(A) each IPC Newco Share shall become a number of New IPC Shares within the range of 0.419296 and 0.83859 (assuming completion of the Cervus Arrangement) with the specific number in such range to be determined by the IPC US Board and agreed to by Vasogen at or prior to the date of the Vasogen Meeting (the “IPC Exchange Ratio”);

(B) each New Vasogen Share shall become a number of New IPC Shares within the range of 0.05 and 0.10 with the specific number in such range to be determined by the Vasogen Board and agreed to by IPC US at or prior to the date of the Vasogen Meeting (the “Vasogen Exchange Ratio”);

(D) each outstanding New Vasogen Option will be exchanged for such number of New IPC Options for each New Vasogen Option held as is determined on the basis of the Vasogen Exchange Ratio and the exercise price per New IPC Share issuable upon exercise of each New IPC Option will be equal to the quotient obtained by dividing the exercise price per New Vasogen Share of such New Vasogen Option by such Vasogen Exchange Ratio, rounded up to the nearest whole cent;

(E) each of the New Vasogen Warrants will become such number of New IPC Warrants for each New Vasogen Warrant as is determined on the basis of the Vasogen Exchange Ratio;

(x)	twenty-two minutes following the Effective Time and subject to the completion of the Merger and pursuant to the terms of the Merger Agreement, New IPC will issue New IPC Shares to the former IPC US Shareholders in respect of the

remaining IPC US Shares outstanding prior to giving effect to the Merger with New IPC Shares issued for IPC US Common Shares on the basis of the IPC Exchange Ratio;

(y) also twenty-two minutes following the Effective Time, subject to the completion of the Merger and pursuant to the terms of the Merger Agreement outstanding IPC US Options will be exchanged for New IPC Options on the following basis:

(i) the number of New IPC Shares subject to each New IPC Option shall be determined by applying the IPC Exchange Ratio to the number of IPC US Common Shares subject to each IPC US Option; and

(ii) the exercise price per New IPC Share issuable upon exercise of each New IPC Option shall be equal to the quotient obtained by dividing the exercise price per IPC US Common Share of such IPC US Option by IPC Exchange Ratio, rounded up to the nearest whole cent; and

(z) the initial auditors of New IPC will be Deloitte and Touche LLP.

Full particulars of the Arrangement are contained in the Plan of Arrangement attached as Appendix “A” to this Joint Circular.

The Merger

If the IPC US Merger Resolution is passed and all other conditions to the closing of the Arrangement and the Merger are satisfied or waived, the Merger will be effected coincident with the Arrangement in accordance with the terms of the Merger Agreement. Pursuant to the Merger, IPC Newco US will be merged with and into IPC US, and IPC US shall continue as the surviving corporation in the Merger under the name “IntelliPharmaCeutics Ltd.”. Other than in respect of its name, the certificate of incorporation and the by-laws of the surviving corporation will be identical to the certificate of incorporation and by-laws of IPC Newco US. All of the property, rights, privileges, powers and franchises of IPC US and IPC Newco US shall vest in the surviving corporation and all debts, liabilities and duties of IPC US and IPC Newco US shall become the debts, liabilities and duties of the surviving corporation. Following completion of the Merger and Arrangement, the surviving corporation will be wholly-owned by New IPC.

At the Merger Effective Time, by virtue of the Merger and the Arrangement, and without any further action of the part of any party, the following shall occur:

(i) any IPC US Common Shares held as treasury stock or owned by IPC US immediately prior to the Merger Effective Time shall be automatically cancelled and shall cease to exist and no consideration shall be delivered or paid in exchange therefor;

(ii) each IPC US Special Voting Share issued and outstanding immediately prior to the Merger Effective Time shall be automatically cancelled and shall cease to exist and no consideration shall be delivered or paid in exchange therefor; and

(iii) each IPC US Common Share issued and outstanding immediately prior to the Merger Effective Time (excluding shares cancelled pursuant to (i) and (ii) above, IPC US Common Shares held by New IPC and IPC US Common Shares in respect of which Appraisal Rights have been sought) shall be automatically converted solely into the right to receive a number of New IPC Shares in accordance with the Plan of Arrangement.

Post Arrangement and Merger

Immediately following completion of the Arrangement and Merger, IPC Opco, Vasogen Ireland, Vasogen US and the corporation surviving the Merger will be wholly-owned subsidiaries of New IPC. Assuming (i) there are no shareholders of IPC US or Vasogen who exercise their appraisal or dissent rights, (ii) no IPC US Shares or Vasogen Shares are issued during the period between the date of this Joint Circular and the Effective Date (other than an estimated 541,575 New Vasogen Shares to be issued upon exercise of Vasogen DSUs and certain IPC US Common Shares to be issued to a broker by IPC US in connection with the IPC Arrangement), (iii) completion of the Cervus Arrangement, and (iv) a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 0.559061, then there will be approximately 11,030,843 New IPC Shares outstanding of which approximately 9,486,525 New IPC Shares (approximately 86%) will be held by the former holders of IPC US Shares and approximately 1,544,318 New IPC Shares (approximately 14%) will be held by the former Vasogen Shareholders. The number of New IPC Shares outstanding upon completion of the Arrangement and Merger to be held by the former holders of IPC US Shares and former Vasogen Shareholders may vary depending on the IPC Exchange Ratio and the Vasogen Exchange Ratio to be determined within the range specified in this Joint Circular.

The business of New IPC will consist primarily of the business of IPC Opco, together with the cash resources of Vasogen. New IPC will retain ownership of Vasogen’s intellectual property, however, the development focus is expected to be principally on IPC’s current product pipeline.

In the event that only the IPC Arrangement is completed and assuming a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 1.046615, there will be approximately 19,303,975 New IPC Shares issued and outstanding of which approximately 1,544,318 (approximately 8%) New IPC Shares will be held by former Vasogen Shareholders and approximately 17,759,657 (approximately 92%) New IPC Shares will be held by former holders of IPC US Shares.

It is a condition to the closing of the IPC Arrangement that upon completion of the IPC Arrangement the New IPC Shares be (i) listed for trading on the TSX or the TSX Venture Exchange, and (ii) listed for trading on NASDAQ or, if such NASDAQ listing cannot be maintained, application will have been made to have the New IPC Shares quoted for trading on the OTCBB. As at the date of this Joint Circular applications have been made to list the New IPC Shares on the TSX and to list the New IPC Shares on NASDAQ. There can be no assurance that approvals will be obtained in respect of such listing and quotation and there can be no assurance that if such approvals are not obtained, that the parties will not waive such condition in whole or in part. As of the date hereof, New IPC does not have conditional listing approval for any stock exchange or market. See “Risk Factors” and “The Arrangement and Merger — IPC Arrangement Agreement — Conditions of Closing”.

Implementation of Only the Cervus Arrangement

If the Cervus Arrangement Resolution is passed but the IPC Arrangement Resolution and/or the IPC US Merger Resolution are not passed or other conditions to the IPC Arrangement are not satisfied or waived, and all other conditions to the closing of the Cervus Arrangement are satisfied or waived, then the Plan of Arrangement will be amended in accordance with section 6.1(b) of the Cervus Arrangement Agreement to exclude the “IPC Arrangement Steps” and the remainder of the Plan of Arrangement will be modified as applicable to give effect to the removal of such steps, provided however, that (i) the exchange ratio of New Vasogen Shares for Vasogen Shares in step (f) described above (see “The Arrangement and Merger — Overview of the Arrangement and Merger”) will be amended to give effect to a share consolidation such that each Vasogen Share will be exchanged for a number of New Vasogen Shares within the range of 0.166667 to 1.00, with the specific number to be determined by the Board at or prior to the Vasogen Board meeting, and (ii) the corresponding exchange ratios in step (g) in respect of Vasogen Options, Vasogen 2006-7 Warrants and Vasogen DSUs will be modified in the same manner. The Cervus Arrangement will then be implemented by way of such a Court-approved Plan of Arrangement under the CBCA. Pursuant to the modified Plan of Arrangement, at the Effective Time, the “Cervus Arrangement Steps”, among others, will occur in the order specified above.

Pursuant to a letter dated September 18, 2009, the TSX conditionally approved the listing of the New Vasogen Shares (in the event only the Cervus Arrangement is completed) under the symbol “VAS”, including the New Vasogen Shares that would be listed upon exercise of New Vasogen Options and New Vasogen Warrants subject to the satisfaction of the customary requirements of the TSX as soon as possible on or prior to the Effective Date. See “Risk Factors”.

Further, if only the Cervus Arrangement is completed, the New Vasogen Option Plan will be adopted in the form of the New Option Plan with applicable changes to give effect to the change of corporation and other matters. See “Approval of the New Option Plan”.

Implementation of Only the IPC Arrangement

If the IPC Arrangement Resolution and the IPC US Merger Resolution are passed but the Cervus Arrangement Resolution or other conditions to the Cervus Arrangement are not satisfied or waived, and all other conditions to the closing of the IPC Arrangement are satisfied or waived, then the Plan of Arrangement will be amended in accordance with section 2.3 of the IPC Arrangement Agreement to exclude the “Cervus Arrangement Steps” and the remainder of the Plan of Arrangement will be modified as applicable to give effect to the removal of such steps, provided however, that (i) references to “New Vasogen” will be modified such that they refer to “Vasogen”, and (ii) references in step (w) above (see “The Arrangement and Merger — Overview of the Arrangement and Merger”) to the Vasogen Exchange Ratio will be within the range of 0.05 and 0.10, and to the IPC Exchange Ratio will be modified such that it is within the range of 0.784961 and 1.569923 and, with the specific number in such range to be determined by the Vasogen Board or the IPC US Board, as applicable, at or prior to the Vasogen Meeting and the corresponding exchange ratios in step (w)(D) and (E) above in respect of New Vasogen Options, New Vasogen 2006-7 Warrants and New Vasogen DSUs will be modified in the same manner. The IPC Arrangement will then be implemented by way of a Court-approved Plan of Arrangement under the CBCA. Pursuant to the modified Plan of Arrangement, at the Effective Time, the “IPC Arrangement Steps”, among others, will occur in the order specified above.

Parties

Vasogen

Vasogen is a biotechnology company that historically focused on the research and commercial development of therapies designed to target the destructive inflammatory process associated with the development and progression of cardiovascular and neurodegenerative disorders. One of its products, CelacadeTM, is designed to activate the immune response to apoptosis - an important physiological process that regulates inflammation. Historically, Vasogen also focused on developing its VP series of drugs for the treatment of certain neuro-inflammatory disorders.

Vasogen’s Shares are currently listed on the TSX under the symbol “VAS” and are currently listed for trading on the NASDAQ under the symbol “VSGN”.

Vasogen’s principal executive offices are located at 4 Robert Speck Parkway, 15th Floor, Mississauga, Ontario, Canada L4Z 1S1.

IPC US and IPC Opco

IPC US, through IPC Opco, develops both new and generic controlled-release pharmaceutical products and licenses these developed products for commercialization. At present, no such licensed product has been commercialized. From 1999 through 2002, IntelliPharmaCeutics Inc., a

predecessor company, engaged in the research, development, licensing, and marketing of both new and generic controlled-release pharmaceutical products. In 2002, IPC Opco purchased IntelliPharmaCeutics Inc.’s assets, including its technology rights.

Currently, IPC Opco has 15 products in its pipeline at varying stages of development and regulatory review. Of these 15 products, three are being pursued in conjunction with a development partner and 12 are being pursued by IPC Opco for its sole benefit. In May 2007, IPC Opco filed an ANDA with the FDA for a drug developed in collaboration with a partner and intended for the US market. In August 2007, that application was accepted by the FDA as being complete and in condition for further review; however, there can be no assurance that the FDA will approve the product for commercial launch in the United States.

The IPC Companies’ principal executive offices are located at 30 Worcester Road, Toronto, Ontario, Canada M9W 5X2.

Cervus

Cervus is in the business of acquiring and operating authorized agricultural and industrial equipment dealerships by facilitating dealer succession. Since its inception Cervus has grown to include 19 John Deere, JCB Construction and Bobcat dealer stores in 16 locations across Alberta, Saskatchewan and western Manitoba.

The Cervus Units are listed on the TSX Venture Exchange under the symbol “CVL.UN”.

Cervus’ principal executive offices are located at 205-120 Country Hills Landing NW, Calgary, Alberta, Canada T3K 5P3.

Benefits of the Arrangement and Merger

The Vasogen Board and the IPC US Board each believe that the Arrangement and Merger will offer a number of benefits to the shareholders of both Vasogen and IPC US, including the following:

· assuming completion of the Cervus Arrangement, the resulting corporation will have an additional $7,500,000 in gross proceeds of non-dilutive financing;

· the business of New IPC will primarily be the current business of IPC Opco, which will be strengthened with the addition of approximately $10,000,000 in Net Cash (as defined in the IPC Arrangement Agreement) to utilize for the operations of IPC Opco;

· as a result of the Arrangement and Merger, the share structure of the IPC Companies will be simplified, since all the equity and voting shares of IPC US and IPC Opco will be owned, directly and indirectly, by New IPC and all other issued shares of the IPC Companies will cease to exist;

· assuming completion of the Cervus Arrangement current Vasogen Shareholders will hold an approximate 14% equity interest in a company that develops controlled-release drug products which has filed one of application with the FDA and has other products in the process of clinical trials (if only the IPC Arrangement is completed, the Vasogen Shareholders will hold an approximate 8% equity interest);

· IPC US Options and Vasogen Options will be exchanged for New IPC Options on an economically-equivalent basis; and

· completion of the IPC Arrangement and Merger is conditional upon the New IPC Shares being (i) listed on the TSX or the TSX Venture Exchange and (ii) listed for trading on NASDAQ or, if such NASDAQ listing cannot be maintained, application will have been made to have the New IPC Shares quoted on the OTCBB. As at the date of this Joint Circular an application has been made to have such shares listed on the TSX and on NASDAQ. There can be no assurance that the New IPC Shares will be approved for listing on the TSX or TSX Venture Exchange or approved for listing on the NASDAQ or quotation on the OTCBB and there can be no assurance that if such approvals are not obtained that the parties will not waive such condition in whole or in part. See “Risk Factors” and “The Arrangement and Merger — IPC Arrangement Agreement”.

Recommendation of the Vasogen Special Committee

Having undertaken a thorough review of, and carefully considered, the Cervus Arrangement and the IPC Arrangement and Merger including consulting with independent financial and legal advisors, the Vasogen Special Committee unanimously determined that each of the Cervus Arrangement and the IPC Arrangement is fair to the Vasogen Shareholders and is in the best interests of Vasogen and recommended that the Vasogen Board approve both the Cervus Arrangement and the IPC Arrangement and recommend that Vasogen Shareholders vote in favour of the both the Cervus Arrangement and the IPC Arrangement. In the course of its evaluation of both the Cervus Arrangement and the IPC Arrangement, the Vasogen Special Committee consulted with Vasogen’s senior management, legal counsel and financial advisors, reviewed additional information and considered a number of factors described herein:

· following the Arrangement and Merger, the Vasogen Shareholders will hold approximately 14% of the New IPC Shares, and New IPC, which will primarily carry on the business of IPC Opco, will be strengthened with the addition of approximately $10,000,000 in Net Cash (as defined in the IPC Arrangement Agreement);

· the Fairness Opinion of JMP to the effect that, as of the date of the opinion, and based on and subject to the assumptions and limitations set forth therein, the IPC Exchange Ratio contemplated in the IPC Arrangement is fair, from a financial point of view, to Vasogen. See “The Arrangement and Merger — Opinion of the Financial Advisor to Vasogen “;

· the value of the proposals made by IPC and Cervus relative to proposals made by other potential investors during the period Vasogen carried on its strategic review process;

· the extent of Vasogen’s ability to access the capital that it would require to continue to fund the ongoing development of its products on acceptable terms;

· historical information concerning Vasogen’s business, including Vasogen’s financial performance and condition, operations, technologies and intellectual property;

· the view of management as to Vasogen’s anticipated financial condition, results of operations and business both with and without giving effect to the Arrangement and Merger;

· in the event the IPC Arrangement is not completed but the Cervus Arrangement is completed, Vasogen’s business will have an additional $7,500,000 in gross proceeds of non-dilutive financing;

· in the event the Cervus Arrangement is not completed but the IPC Arrangement is completed, the Vasogen Shareholders will hold approximately 8% of the New IPC Shares, and New IPC, which will primarily carry on the business of IPC Opco, will be strengthened with the addition of approximately $4,000,000 in Net Cash (as defined in the IPC Arrangement Agreement); and

· holders of Vasogen Options, Vasogen Warrants and Vasogen DSUs will receive securities in New IPC (or if only the Cervus Arrangement is completed, securities in New Vasogen) on an economically-equivalent basis or will otherwise be treated fairly pursuant to the terms of the Arrangement.

Recommendation of the Vasogen Board

The Vasogen Board, having consulted its financial and legal advisors and having considered, among other things, the determination of the Vasogen Special Committee, the benefits of the Arrangement and the Merger and the Fairness Opinion, unanimously determined that each of the Cervus Arrangement, the IPC Arrangement and the Merger are in the best interests of Vasogen.

Each of Vasogen’s directors and officers has advised Vasogen that he will vote any Vasogen Shares that he holds in favour of both the Cervus Arrangement Resolution and the IPC Arrangement Resolution. The directors and officers of Vasogen own, in the aggregate, approximately 0.35% of the issued and outstanding Vasogen Shares and after giving effect to the Cervus Arrangement and the deemed exercise of DSUs and before giving effect to the IPC Arrangement, the officers and directors of Vasogen will own 2.58% of the issued and outstanding New Vasogen Shares. See “Interests of Certain Persons in the Arrangement and Merger”.

The Vasogen Board unanimously recommends that the Vasogen Shareholders vote “FOR” the Cervus Arrangement Resolution and the IPC Arrangement Resolution. For further details in respect of the Vasogen Board recommendation, see “The Arrangement and Merger — Recommendation of the Vasogen Board”.

Recommendation of the IPC US Board

The IPC US Board, having consulted its legal advisors and having considered, among other things, the benefits of the IPC Arrangement and the Merger, unanimously determined that the IPC Arrangement and the Merger are in the best interests of IPC US.

Certain IPC US Shareholders have entered into agreements pursuant to which each has agreed to vote any IPC US Shares he or she holds in favour of the IPC US Merger Resolution. These IPC US Shareholders own, in the aggregate, approximately 60% of the issued and outstanding IPC US Common Shares and 100% of the issued and outstanding IPC US Special Voting Shares and accordingly, represent sufficient votes to assure the approval of the IPC US Merger Resolution at the IPC US Meeting. See “Voting Information and General Proxy Matters for IPC US Shareholders — Approval Agreements”.

The IPC US Board unanimously recommends that the IPC US Shareholders vote “FOR” the IPC US Merger Resolution. For further details in respect of the IPC US Board recommendation, see “The Arrangement and Merger — Recommendation of the IPC US Board”.

Reasons for the Recommendation of the IPC Board

The determinations and recommendations of the IPC US Board are based upon a number of factors including, among others:

· Anticipated Benefits to IPC US Shareholders. The IPC US Board believes that the Arrangement and Merger will offer a number of benefits to the IPC US Shareholders, including those identified above under “The Arrangement and Merger — Benefits of the Arrangement and Merger for Shareholders of Vasogen and IPC US”.

· Arrangement Agreement and Merger Agreement. The terms and conditions of the IPC Arrangement Agreement and Merger Agreement, including Vasogen’s representations, warranties and covenants, and the conditions to its obligations,

are, in the judgment of IPC US and its advisors, reasonable and were the product of extensive negotiations between the IPC Companies and their advisors and Vasogen and its advisors.

· Approval of IPC US Shareholders and Separate Class Votes. The IPC US Board considers that the required shareholder approval protects the rights of IPC US Shareholders as the Merger is subject to approval by holders of a majority of IPC US Common Shares and IPC US Special Voting Shares, voting as a separate class.

· Approval Agreements. Holders of approximately 60% of the IPC US Common Shares and 100% of the IPC US Special Voting Shares have signed agreements with Vasogen and the IPC Companies pursuant to which such shareholders have agreed to vote in favour of the IPC US Merger Resolution.

In considering the Arrangement and Merger, the IPC US Board recognized that there are risks associated with the Arrangement and Merger, including that some of the potential benefits described above may not be realized and that there may be costs associated with realizing these benefits. Please see the risks set forth under “Risk Factors” and those incorporated by reference herein.

The above discussion of the information and factors considered by the IPC US Board is not intended to be exhaustive but is believed by the IPC US Board to include the material factors it considered in its assessment of the Arrangement and Merger. In view of the wide variety of factors considered by the IPC US Board in connection with its assessment of the Arrangement and Merger, and the complexity of such matters, the IPC US Board did not consider it practical, nor did it attempt, to quantify, rank or otherwise assign relative weights to the foregoing factors that it considered in reaching its decision. In addition, in considering the factors described above, individual members of the IPC US Board may have given different weights to various factors and may have applied different analysis to each of the material factors considered by the IPC US Board. The IPC US Board recommended the Arrangement and Merger based upon the totality of the information presented to and considered by it.

Opinion of the Financial Advisor to Vasogen

On August 13, 2009, JMP, the financial advisor to Vasogen, delivered its opinion (the “Fairness Opinion”) to the Vasogen Board (at first orally and then subsequently confirmed in writing). The Fairness Opinion states that, in the opinion of JMP, as of August 13, 2009 and based upon and subject to the scope of the review, analysis undertaken, and the various assumptions, limitations and qualifications set forth therein, the IPC Exchange Ratio (as described therein) as contemplated in the IPC Arrangement is fair, from a financial point of view, to Vasogen.

The full text of the Fairness Opinion is attached as Appendix “F” and forms part of this Joint Circular. The Fairness Opinion should be read in its entirety. The Fairness Opinion does not constitute a recommendation to the Vasogen Board or any Vasogen Shareholder or any other person as to how to vote on the IPC Arrangement Resolution or the Cervus Arrangement Resolution or how to act with respect to any matters relating to the Arrangement or otherwise.

For further details regarding the Fairness Opinion, in addition to reviewing the full text of the opinion attached as Appendix “F”, see “The Arrangement and Merger — Opinion of the Financial Advisor to Vasogen”.

Required Approvals and Other Conditions to Completion

Approval of both the Vasogen Shareholders of both the Cervus Arrangement Resolution and the IPC Arrangement Resolution and the IPC US Shareholders of the IPC US Merger Resolution, in addition to other conditions specified in the Cervus Arrangement Agreement and the IPC Arrangement Agreement are required to consummate the Arrangement and Merger. See “Voting Information and General Proxy Matters for Vasogen Shareholders — Quorum and Votes Required” and “Voting Information and General Proxy Matters for IPC Shareholders — Quorum and Votes Required”.

The implementation of the Arrangement is subject to approval by the Court. Prior to mailing this Joint Circular, Vasogen obtained the Interim Order, a copy of which is attached as Appendix “G” hereto. Vasogen intends to apply for the Final Order once (i) the Cervus Arrangement Resolution and/or (ii) the IPC Arrangement Resolution have been approved by the Vasogen Shareholders and the IPC US Merger Resolution has been approved by the IPC US Shareholders and (iii) the holders of the Cervus Units and the Cervus GP Shares have each approved resolutions to be presented at the Cervus Meetings. At the hearing for the Final Order, the Court will consider, among other things, the fairness of the Plan of Arrangement and the approval of Vasogen Shareholders, IPC US Shareholders, holders of Cervus and holders of Cervus GP Shares.

It is a condition to the closing of the IPC Arrangement that upon completion of the IPC Arrangement the New IPC Shares be (i) listed for trading on the TSX or the TSX Venture Exchange, and (ii) listed for trading on NASDAQ or, if such NASDAQ listing cannot be maintained, application will have been made to have the New IPC Shares quoted for trading on the OTCBB. As at the date of this Joint Circular applications have been made to list the New IPC Shares on the TSX and to list the New IPC Shares on NASDAQ. There can be no assurance that approvals will be obtained in respect of such listing and quotation and there can be no assurance that if such approvals are not obtained, that the parties will not waive such condition in whole or in part . As of the date hereof, New IPC does not have conditional listing approval for any stock exchange or market. See “Risk Factors” and “The Arrangement and Merger — The IPC Arrangement Agreement — Conditions of Closing”.

Vasogen Options and New Vasogen Warrants subject to the satisfaction of the customary requirements of the TSX as soon as possible on or prior to the Effective Date. See “Risk Factors”.

Vasogen received a letter, dated August 11, 2009, from the Listing Qualifications Department of the NASDAQ indicating that Vasogen had not regained compliance with Listing Rule 5550(a)(2). Vasogen has subsequently submitted a request for a hearing before a NASDAQ Listing Qualifications Panel (the “Panel”) to review the determination of the Listing Qualifications Department concerning continued listing of Vasogen Shares on the NASDAQ. Vasogen expects that any discussions with the NASDAQ regarding its plans for regaining compliance will be impacted by the proposed transactions described in this Joint Circular. There can be no assurance that the Panel will grant Vasogen’s request for continued listing of Vasogen Shares on the NASDAQ, whether the proposed transactions are consummated or not. Even if the Panel grants such a request for continued listing of Vasogen Shares on the NASDAQ, there can be no assurance that the New IPC Shares will be approved to be listed on NASDAQ.

If the Panel rules against Vasogen and Vasogen Shares cease to be listed for trading on the NASDAQ, Vasogen will seek to have Vasogen Shares or the New Vasogen Shares to be quoted on the OTCBB, or seek to have New IPC Shares quoted (in case the proposed transactions are consummated), on the OTCBB. There can be no assurance, however, that Vasogen Shares, or the New Vasogen Shares (in case only the Cervus Arrangement is consummated), or the New IPC Shares (in the event the IPC Arrangement and Merger are completed) whichever applicable, will be approved to be quoted on the OTCBB.

The obligation of Vasogen to complete the Cervus Arrangement is also subject to the satisfaction or waiver, where permissible, of a number of other conditions set forth in the Cervus Arrangement Agreement. See “The Cervus Arrangement— The Cervus Arrangement Agreement — Conditions to Closing”.

The obligations of Vasogen and IPC US to complete the IPC Arrangement and Merger are also subject to the satisfaction or waiver, where permissible, of a number of other conditions set forth in the IPC Arrangement Agreement. See “The Arrangement and Merger — The IPC Arrangement Agreement — Conditions Precedent to the Cervus Arrangement”.

Procedures for Exchange by Vasogen Shareholders

In the event the IPC Arrangement and the Merger are completed, New IPC will deposit with the Depositary certificates representing the number of New IPC Shares required to be issued to the Vasogen Shareholders in connection with such transaction. Following the applicable time on the Effective Date, upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding Vasogen Shares, together with the Vasogen Letter of Transmittal enclosed with this Joint Circular and which has been completed and signed in the manner required thereby in respect of such certificate and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate will be entitled to receive in exchange therefor, and the Depositary will deliver to such holder, a certificate representing that number of New IPC Shares that such holder has the right to receive pursuant to the Plan of Arrangement and the surrendered certificate will be cancelled.

In the event only the Cervus Arrangement is completed, New Vasogen will deposit with the Depositary certificates representing the number of New Vasogen Shares required to be issued to the Vasogen Shareholders in connection with the Arrangement. Following the applicable time on the Effective Date, upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding Vasogen Shares, together with the Vasogen Letter of Transmittal enclosed with this Joint Circular and which has been completed and signed in the manner required thereby in respect of such certificate and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate will be entitled to receive in exchange therefor, and the Depositary will deliver to such holder, a certificate representing that number of New Vasogen Shares that such holder has the right to receive pursuant to the Plan of Arrangement and the surrendered certificate will be cancelled.

If neither the IPC Arrangement nor the Cervus Arrangement is effected, all certificates representing Vasogen Shares transmitted with a related Vasogen Letter of Transmittal will be returned to Vasogen Shareholders. See “Procedures for Exchange by Vasogen Shareholders”.

Procedures for Exchange by IPC US Shareholders

New IPC will deposit with the Depositary certificates representing the number of New IPC shares required to be issued to the IPC US Shareholders in connection with the Arrangement. As soon as practicable following the later of the Effective Date and the date of deposit, upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding IPC US Shares, together with the IPC Letter of Transmittal enclosed with this Joint Circular and which has been completed and signed in the manner required thereby in respect of such certificate and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate will be entitled to receive in exchange therefor, and the Depositary will deliver to such holder, a certificate representing that number of New IPC Shares that such holder has the right to receive pursuant to the Plan of Arrangement and the surrendered certificate will be cancelled. If the Arrangement is not effected, all certificates representing IPC US Shares transmitted with a related IPC Letter of Transmittal will be returned to IPC US Shareholders. See “Procedures for Exchange by IPC US Shareholders”.

Material Income Tax Considerations for Securityholders

Securityholders should carefully read the information set out in the sections of this Joint Circular entitled “Certain Canadian Federal Income Tax Considerations for Securityholders” and “Certain United States Federal Income Tax Considerations for Securityholders”. No advance

tax rulings have been sought or obtained with respect to any of the transactions described in this Joint Circular. Securityholders should consult their own tax advisors with respect to the consequences that are applicable to their own particular circumstances.

Risk Factors

There are certain risks that should be considered by Vasogen Shareholders in evaluating whether to vote in favour of the Arrangement Resolution and by the IPC US Shareholders in evaluating whether to vote in favour of the IPC US Merger Resolution. Some of these risks relate directly to the Arrangement and Merger while others relate to the business of Vasogen, the IPC Companies and New IPC. See “Risk Factors”.

The Cervus Arrangement Agreement

The Cervus Arrangement Agreement may be terminated prior to the Effective Time in certain circumstances. Upon the termination of the Cervus Arrangement Agreement, in certain instances, Vasogen or Cervus may be required to pay to the other a termination fee of $250,000 plus up to an additional $250,000 in expense reimbursements.

The Cervus Arrangement Agreement also includes other covenants and certain representations and warranties of Vasogen, Cervus and Cervus GP. For additional information as to the above and the other terms and conditions of the Cervus Arrangement Agreement, see “The Arrangement and Merger — The Cervus Arrangement Agreement”.

The IPC Arrangement Agreement

The IPC Arrangement Agreement may be terminated prior to the Effective Time in certain circumstances. Upon the termination of the IPC Arrangement Agreement, in certain instances, Vasogen may be required to pay to the IPC Companies a termination fee of $500,000.

The IPC Arrangement Agreement also includes other covenants and certain representations and warranties of Vasogen, IPC US and IPC Opco. For additional information as to the above and the other terms and conditions of the IPC Arrangement Agreement, see “The Arrangement and Merger — The IPC Arrangement Agreement”.

Selected Financial Information Concerning IPC US

The following selected consolidated financial information concerning IPC US has been derived from and should be read in conjunction with the audited consolidated financial statements prepared in accordance with U.S. GAAP of IPC US for the years ended December 31, 2008, 2007 and 2006 attached to this Joint Circular as Appendix “I” and the unaudited consolidated financial statements of IPC US for the six months ended June 30, 2009 attached to this Joint Circular as Appendix “J” and the respective corresponding management’s discussion and analysis attached to this Joint Circular as Appendix “Q”.

	As at and for the six months ended June 30, 2009		As at and for the year ended December 31, 2008		As at and for the year ended December 31, 2007		As at and for the year ended December 31, 2006
	(in thousands of U.S.$) (unaudited)		(in thousands of U.S.$) (audited)		(in thousands of U.S.$) (audited)		(in thousands of U.S.$) (audited)
Net loss	(798	)	(3,765	)	(1,291	)	(1,320	)
Total assets	2,600		3,026		6,878		3,027
Total liabilities	4,149		3,609		4,557		2,567
Shareholder equity	(1,549	)	(583	)	2,322		460
Loss per share – basic and diluted	(0.05	)	(0.22	)	(0.08	)	(0.08	)
Dividends	nil		nil		nil		nil

Selected Pro Forma Financial Information

The following selected unaudited pro forma consolidated financial information for New IPC is based on the assumptions described in the respective notes to the unaudited pro forma consolidated balance sheet as at June 30, 2009 and the unaudited pro forma consolidated statements of operations and comprehensive loss for the six months ended June 30, 2009 and for the year ended December 31, 2008, attached to this Joint Circular as Appendix “F”. The pro forma consolidated Statement of Operations has been prepared based on the assumption that, among other things, the Effective Date of the Arrangement and Merger was January 1, 2008. The pro forma consolidated balance sheet has been prepared based on the assumption that, among other things, the Effective Date of the Arrangement and Merger was June 30, 2009. The unaudited pro forma consolidated financial statements are not necessarily indicative of New IPC’s consolidated financial position and results from operations if the events reflected therein were in effect on January 1, 2008 nor do they purport to project New IPC’s consolidated financial position or results from operations for any future period.

The unaudited pro forma consolidated financial statements are based on certain assumptions and adjustments, including the non-recurring expenditures related to the Arrangement. The selected unaudited pro forma consolidated financial information given below should be read in conjunction with the description of the Arrangement contained in this Joint Circular, the unaudited pro forma consolidated financial statements contained in Appendix “K” to this Joint Circular, the audited consolidated financial statements of Vasogen incorporated by reference in this Joint Circular and the audited consolidated financial statements of IPC US attached to this Joint Circular as Appendix “I”.

	As at June 30, 2009 and for the year ended December 31, 2008, respectively, after giving effect to the Arrangement
	(in thousands of U.S.$) (unaudited)
Pro Forma Balance Sheet Data (as at June 30, 2009)

Cash	12,240
Total assets	15,982
Current liabilities	6,447
Total liabilities	8,331
Shareholders’ equity	7,651
Total liabilities and shareholders’ equity	15,982

Pro Forma Statement of Operations Data (for the year ended December 31, 2008)

Net loss from continuing operations	(15,512	)
Comprehensive loss	(15,094	)

VOTING INFORMATION AND GENERAL PROXY MATTERS FOR VASOGEN SHAREHOLDERS

Solicitation of Proxies

This Joint Circular is furnished in connection with the solicitation of proxies by and on behalf of the management of Vasogen for use at the Vasogen Meeting and any adjournment(s) or postponement(s) thereof. No person has been authorized to give any information or to make any representation in connection with the Arrangement or any other matters to be considered at the Vasogen Meeting other than those contained in this Joint Circular and, if given or made, any such information or representation must not be relied on as having been authorized. Vasogen has engaged The Proxy Advisory Group, LLC, to assist in the solicitation of proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements that are not expected to exceed U.S.$10,000 in the aggregate. All costs associated with the solicitation of proxies by or on behalf of management of Vasogen will be borne by Vasogen.

Appointment and Revocation of Proxies

Accompanying this Joint Circular is a form of proxy for use at the Vasogen Meeting. If you are unable to attend the Vasogen Meeting in person, please exercise your right to vote by completing the enclosed form of proxy and returning it to CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario, Canada M1S 0A1, Attention: Proxy Department. A form of proxy must be received by CIBC Mellon at or prior to 5:00 p.m. (Eastern Time) on October 15, 2009, or, if the Vasogen Meeting is adjourned or postponed, before 5:00 p.m. (Eastern Time) on the last Business Day preceding the adjourned or postponed Vasogen Meeting, or any further adjournment or postponement thereof. Failure to so deposit a form of proxy shall result in its invalidation. Late proxies may be accepted or rejected by the chairman of the Vasogen Meeting at his discretion, however, the chairman is under no obligation to accept or reject any particular late proxy.

The persons named in the enclosed form of proxy are directors and/or officers of Vasogen. A Vasogen Shareholder wishing to appoint a person (who need not be a Vasogen Shareholder) to represent such Vasogen Shareholder at the Vasogen Meeting other than the persons designated in the accompanying form of proxy may do so either by inserting such person’s name in the blank space provided in the appropriate form of proxy or by completing another form of proxy and in either case sending or delivering the properly completed and signed form of proxy to CIBC Mellon prior to 5:00 p.m. (Eastern Time) on October 15, 2009, or, if the Vasogen Meeting is adjourned or postponed, before 5:00 p.m. (Eastern Time) on the last Business Day preceding the adjourned or postponed Vasogen Meeting, or any further adjournment or postponement thereof in accordance with the delivery procedures noted above.

A Vasogen Shareholder who has given a form of proxy may revoke it prior to a vote being cast pursuant to its authority by an instrument in writing executed by such Vasogen Shareholder or by his or her attorney duly authorized in writing or, if the Vasogen Shareholder is a corporation, by an officer or attorney thereof duly authorized and deposited either at the registered office of Vasogen (as set forth in this Joint Circular) or at the above-mentioned office of CIBC Mellon on or before the last Business Day preceding the day of the Vasogen Meeting, or any adjournment(s) or postponement(s) thereof, or with the chairman of the Vasogen Meeting on the day of the Vasogen Meeting, or any adjournment(s) or postponement(s) thereof.

The Vasogen Board has fixed the record date for the Vasogen Meeting as the close of business on September 4, 2009. Vasogen Shareholders of record as at the record date are entitled to receive notice of, to attend and to vote at the Vasogen Meeting, or any adjournment(s) or postponement(s) thereof.

Signature of Proxy

The form of proxy must be executed by the Vasogen Shareholder or his or her attorney authorized in writing, or if the Vasogen Shareholder is a corporation, the form of proxy should be signed in its corporate name under its corporate seal by an authorized officer whose title should be indicated. A proxy signed by a person acting as attorney or in some other representative capacity should reflect such person’s capacity following his signature and should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with Vasogen).

Exercise of Discretion of Proxy

On any ballot that may be called for at the Vasogen Meeting, the persons named in the accompanying form of proxy will vote (or withhold from voting) the Vasogen Shares in respect of which they are appointed in accordance with the direction of the Vasogen Shareholder appointing them and, if the Vasogen Shareholder specifies a choice with respect to any matter to be acted upon which the holders of such shares are entitled to vote, the Vasogen Shares will be voted accordingly. In the absence of such direction, such Vasogen Shares will be voted FOR the approval of each of the Cervus Arrangement Resolution, the IPC Arrangement Resolution and the New Option Plan Resolution. The accompanying form of proxy confers discretionary authority upon the persons named therein with respect to amendments to or variations of the matters identified in the notice of meeting and with respect to other matters that may properly be brought before the Vasogen Meeting. As at the date of this Joint Circular, management of Vasogen knows of no such amendments, variations or other matters to be brought before the Vasogen Meeting.

Advice to Non-Registered Vasogen Shareholders

Only registered Vasogen Shareholders or the persons they appoint as their proxies are permitted to vote at the Vasogen Meeting. Most Vasogen Shareholders are non-registered Vasogen Shareholders because the Vasogen Shares they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust corporation through which they purchased the shares. Vasogen Shares

beneficially owned by a non-registered Vasogen Shareholder are registered either: (i) in the name of a broker, custodian, nominee or other intermediary that the non-registered Vasogen Shareholder deals with in respect of the Vasogen Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as CDS Clearing and Depository Services Inc.) of which the broker, custodian, nominee or other intermediary is a participant. In accordance with applicable securities law requirements, Vasogen will have distributed copies of the notice of meeting, this Joint Circular and the form of proxy (collectively, the “Vasogen Meeting Materials”) to the clearing agencies and intermediaries for distribution to non-registered Vasogen Shareholders.

Intermediaries are required to forward the Vasogen Meeting Materials to non-registered Vasogen Shareholders unless a non-registered Vasogen Shareholder has waived the right to receive them. Intermediaries often use service companies to forward the Vasogen Meeting Materials to non-registered Vasogen Shareholders. Generally, non-registered Vasogen Shareholders who have not waived the right to receive Vasogen Meeting Materials will either: be given a voting instruction form which is not signed by the broker, custodian, nominee or other intermediary and which, when properly completed and signed by the non-registered Vasogen Shareholder and returned to the broker, custodian, nominee or other intermediary or its service company, will constitute voting instructions (often called a “voting instruction form”) which the broker, custodian, nominee or other intermediary must follow. Non-registered Vasogen Shareholders should follow carefully the instructions provided in the voting instruction form by using one of the described methods provided to vote their Vasogen Shares; or be given a form of proxy which has already been signed by the broker, custodian, nominee or other intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the non-registered Vasogen Shareholder but which is otherwise not completed by the broker, custodian, nominee or other intermediary. Because the broker, custodian, nominee or other intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the non-registered Vasogen Shareholder when submitting the proxy. In this case, the non-registered Vasogen Shareholder who wishes to submit a proxy should properly complete the form of proxy and deposit it with CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario, Canada M1S 0A1, facsimile number (416) 368-2502.

In either case, the purpose of these procedures is to permit non-registered Vasogen Shareholders to direct the voting of the Vasogen Shares they beneficially own. Should a non-registered Vasogen Shareholder who receives one of the above forms wish to vote at the Vasogen Meeting in person (or have another person attend and vote on behalf of the Non- registered Vasogen Shareholder), the non-registered Vasogen Shareholder should, in the case of a form of proxy, strike out the persons named in the form of proxy and insert the non-registered Vasogen Shareholder or such other person’s name in the blank space provided, or in the case of a voting instruction form, follow the instructions provided by his or her broker, custodian, nominee or other intermediary or its service company, as the case may be. In either case, a non-registered Vasogen Shareholder should carefully follow the instructions of his or her broker, custodian, nominee or other intermediary or its service company, as the case may be, including those regarding when and where the proxy or voting instruction form is to be delivered.

A non-registered Vasogen Shareholder who wishes to revoke a waiver of the right to receive Vasogen Meeting Materials and to vote his or her Vasogen Shares, change his or her vote or revoke a voting instruction form must, in sufficient time in advance of the Vasogen Meeting, provide written notice to his or her broker, custodian, nominee or other intermediary or its service company, as the case may be, and follow the instructions provided by such broker, custodian, nominee or other intermediary or service company.

Voting Securities and Principal Holders of Voting Securities

As at the date hereof, 22,623,195 Vasogen Shares were issued and outstanding. Each Vasogen Share entitles the holder thereof to one vote on all matters to be acted upon at the Vasogen Meeting. The record date for the determination of Vasogen Shareholders entitled to receive notice of and to vote at the Vasogen Meeting has been fixed at September 4, 2009. In accordance with the provisions of the CBCA, Vasogen will prepare a list of holders of Vasogen Shares as of such record date. Each holder of Vasogen Shares named in the list will be entitled to vote the shares shown opposite his or her name on the list at the Vasogen Meeting. All such holders of Vasogen Shares of record are entitled either to attend and vote thereat in person the respective Vasogen Shares held by them or, provided a completed and executed proxy shall have been delivered to the registered office of Vasogen or CIBC Mellon within the time specified in the attached notice of meeting, to attend and vote thereat by proxy the respective Vasogen Shares held by them.

To the knowledge of the directors and executive officers of Vasogen, based on the most recent publicly available information, as of the date hereof, no person beneficially owns, directly or indirectly, or controls or directs voting securities of Vasogen carrying more than 10% of the voting rights attached to the voting securities of Vasogen.

Interests of Certain Persons in the Arrangement and Merger

Directors and officers of Vasogen as a group beneficially owned, directly or indirectly, or exercised control or direction over approximately 79,342 Vasogen Shares, representing approximately 0.35% of the issued and outstanding Vasogen Shares. In addition, after giving effect to

the Arrangement and the deemed exercise of DSUs thereunder for New Vasogen Shares the directors and officers of Vasogen will own, in the aggregate 2.58% of the issued and outstanding New Vasogen Shares (before giving effect to the IPC Arrangement). Each of these directors and officers has advised Vasogen that he currently intends to vote all of the Vasogen Shares beneficially owned, whether directly or indirectly, by him in favour of each of the Cervus Arrangement Resolution, the IPC Arrangement Resolution, and the New Option Plan Resolution.

Date, Time and Place of the Vasogen Meeting

Matters to Be Considered

At the Vasogen Meeting, Vasogen Shareholders will be asked to consider and, if deemed advisable, to approve the matters identified in the Cervus Arrangement Resolution, the IPC Arrangement Resolution and the New Option Plan Resolution. See Appendices “A”, “B” and “C” to this Joint Circular for the full text of these resolutions.

Quorum and Votes Required

The presence of two persons entitled to vote at the Vasogen Meeting, either as shareholders or proxyholders, will constitute a quorum for the Vasogen Meeting.

Approval of the Cervus Arrangement Resolution and the IPC Arrangement Resolution requires the affirmative vote of at least 662/3% of the total votes cast by Vasogen Shareholders present (in person or by proxy) and entitled to vote at the Vasogen Meeting. Approval of the New Option Resolution requires the affirmative vote of a majority of the total votes cast by Vasogen Shareholders present (in person or by proxy), excluding the votes of insiders entitled to receive a benefit under the New Option Plan, and entitled to vote at the Vasogen Meeting.

The Vasogen Board has determined that the Arrangement is in the best interests of Vasogen and unanimously recommends that Vasogen Shareholders vote “FOR” the approval of each of the Cervus Arrangement Resolution, the IPC Arrangement Resolution and the New Option Plan Resolution.

PROXIES RECEIVED PURSUANT TO THIS SOLICITATION WILL BE VOTED “FOR” THE CERVUS ARRANGEMENT RESOLUTION, THE IPC ARRANGEMENT RESOLUTION AND THE NEW IPC OPTION PLAN RESOLUTION, UNLESS THE VASOGEN SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS OR HER VASOGEN SHARES ARE TO BE VOTED AGAINST SAID RESOLUTION, AS APPLICABLE.

Dissent Rights of Vasogen Shareholders

The following description of the Dissent Rights of Vasogen Shareholders who wish to dissent is not a comprehensive statement of the procedures to be followed by a Dissenting Vasogen Shareholder who seeks payment of the fair value of its Vasogen Shares and is qualified in its entirety by the reference to the full text of the Interim Order and Section 190 of the CBCA which are attached to this Joint Circular as Appendices “G” and “N”, respectively. A Dissenting Vasogen Shareholder who intends to exercise the Dissent Rights should carefully consider and comply with the provisions of Section 190 of the CBCA, as modified by the Interim Order. Failure to comply strictly with the provisions of the CBCA, as modified by the Interim Order, and to adhere to the procedures established therein may result in the loss of all rights thereunder.

The Court hearing the application for the Final Order has the discretion to alter the Dissent Rights described herein based on the evidence presented at such hearing.

Pursuant to the Interim Order, each Vasogen Shareholder may exercise Dissent Rights under Section 190 of the CBCA as modified by the Interim Order or the Final Order in respect of the Arrangement. Vasogen Shareholders who duly exercise such Dissent Rights and who:

· are ultimately determined to be entitled to be paid fair value for the Vasogen Shares in respect of which they have exercised Dissent Rights will be deemed to have irrevocably transferred such Vasogen Shares to Vasogen pursuant to the Plan of Arrangement in consideration of such fair value; or

· are ultimately not entitled, for any reason, to be paid fair value for the Vasogen Shares in respect of which they have purported to have exercised Dissent Rights will be deemed to have participated in the Arrangement on the same basis as a Vasogen Shareholder that has not exercised Dissent Rights, as at and from the time specified in the Plan of Arrangement for the consideration set forth therein,

but in no case will New IPC or any other person be required to recognize such Dissenting Vasogen Shareholders as Vasogen Shareholders after the cancellation of the Dissenting Shares, which cancellation is to occur at the Effective Time, and each Dissenting Vasogen Shareholder will cease to be entitled to the rights of a Vasogen Shareholder in respect of the Dissenting Shares in relation to which such Dissenting Vasogen Shareholder has exercised Dissent Rights and the central securities register will be amended to reflect that such former holder is no longer the holder of such Vasogen Shares as and from the Effective Time.

Persons who are beneficial shareholders who wish to dissent with respect to their Vasogen Shares should be aware that only registered shareholders are entitled to dissent with respect to them. A registered shareholder such as an intermediary who holds Vasogen Shares as nominee for beneficial shareholders, some of whom wish to dissent, must exercise Dissent Rights on behalf of such beneficial shareholders with respect to the Vasogen Shares held for such beneficial shareholders. In such case, the Notice of Objection (as defined below) should set forth the number of Vasogen Shares it covers.

A Vasogen Shareholder who wishes to dissent must send a written objection notice (the “Notice of Objection”) objecting to the Arrangement to Vasogen at its address for such purpose, Vasogen Inc., c/o McCarthy Tétrault LLP, 66 Wellington Street West, Suite 5300, Toronto Dominion Bank Tower, Toronto, Ontario, Canada M5K 1E6 by 5:00 p.m. (Eastern Time) on October 15, 2009, or otherwise at least 48 hours (excluding Saturdays, Sundays and statutory holidays in the City of Toronto) prior to the time of the Vasogen meeting or any adjournment or postponement thereof, Attention: Geoff Hall. The Notice of Objection must set out the number of Vasogen Shares held by the Dissenting Vasogen Shareholder.

The delivery of a Notice of Objection does not deprive such Dissenting Vasogen Shareholder of its right to vote at the Vasogen Meeting, however, a vote in favour of the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution may result in a loss of its Dissent Right. A vote against the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution, whether in person or by proxy, does not constitute a Notice of Objection, but a Vasogen Shareholder need not vote its Vasogen Shares against the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution in order to object. Similarly, the revocation of a proxy conferring authority on the proxy holder to vote in favour of the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution does not constitute a Notice of Objection in respect of the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution, but any such proxy granted by a Vasogen Shareholder who intends to dissent should be validly revoked in order to prevent the proxy holder from voting such Vasogen Shares in favour of the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution. A vote in favour of the Cervus Arrangement Resolution and/or the IPC Arrangement Resolution, whether in person or by proxy, may constitute a loss of a Vasogen Shareholder’s right to dissent. However, a Vasogen Shareholder may vote as a proxy holder for another Vasogen Shareholder whose proxy required an affirmative vote, without affecting the right of the proxy holder to exercise Dissent Rights.

If the Cervus Arrangement Resolution and the IPC Arrangement Resolution is passed at the Vasogen Meeting or at an adjournment thereof, Vasogen is required to deliver to each Dissenting Vasogen Shareholder, within 10 days after the approval of the Cervus Arrangement Resolution and the IPC Arrangement Resolution, a notice stating that the Cervus Arrangement Resolution and the IPC Arrangement Resolution has been adopted (the “Notice of Resolution”). A Notice of Resolution is not required to be sent to any Dissenting Vasogen Shareholder who voted in favour of the Cervus Arrangement Resolution and the IPC Arrangement Resolution or who has withdrawn their Notice of Objection. A Dissenting Vasogen Shareholder then has 20 days after receipt of the Notice of Resolution or, if the Dissenting Vasogen Shareholder does not receive a Notice of Resolution, within 20 days after learning that the Cervus Arrangement Resolution and the IPC Arrangement Resolution has been adopted, to send to New IPC a written notice (a “Demand Notice”) containing the Dissenting Vasogen Shareholder’s name and address, the number of Vasogen Shares in respect of when it dissents and a demand for payment of the fair value of such Vasogen Shares. A Dissenting Vasogen Shareholder must within 30 days after sending the Demand Notice, send the certificates representing the Vasogen Shares in respect of which it is dissenting to New IPC or is transfer agent or else the Dissenting Vasogen Shareholder will lose its right to make a claim for the fair value of such Vasogen Shares. If a Dissent Right is being exercised by someone other than the beneficial owner of Vasogen Shares, this Demand Notice must be signed by such beneficial owner.

On sending the Demand Notice, a Dissenting Vasogen Shareholder ceases to have any rights as a Vasogen Shareholder except the right to be paid the fair value of its Dissenting Shares, except where the Dissenting Vasogen Shareholder withdraws its Demand Notice before New IPC sends its Offer to Purchase (as defined below) or Vasogen decides not to proceed with the Arrangement, in which case, such shareholder’s rights are reinstated as of the date it sent the Demand Notice.

New IPC shall, not later than seven days after the later of the date on which the Arrangement becomes effective or the date New IPC receives a Demand Notice, send to each Dissenting Vasogen Shareholder a written offer (the “Offer to Purchase”) to pay for the Dissenting Shares in an amount considered by the directors of New IPC to be the fair value thereof, accompanied by a statement and showing how the fair value was determined. Every Offer to Purchase shall be on the same terms. Dissenting Vasogen Shareholders who accept the Offer to Purchase will, unless such payments prohibited by the CBCA, be paid within 10 days of acceptance, but any Offer to Purchase lapses if New IPC does not receive an acceptance thereof within 30 days after the date on which the Offer to Purchase was made.

If New IPC fails to make the Offer to Purchase, or a Dissenting Vasogen Shareholder fails to accept the Offer to Purchase, New IPC may, within 50 days after the Effective Date or within such further period as the Court may allow, apply to Court to fix a fair value for the Dissenting Shares of any Dissenting Vasogen Shareholder. Upon any such application by New IPC, New IPC shall notify each affected Dissenting Vasogen Shareholder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel. If New IPC fails to make such an application, a Dissenting Vasogen Shareholder has the right to so apply within a further period of 20 days or within such further period as the Court may allow. All Dissenting Vasogen Shareholders whose Dissenting Shares have not been purchased by New IPC will be joined as parties to the application and will be bound by the decision of the Court. The Court may determine whether any other person is a Dissenting Vasogen Shareholder who should be joined as a party and the Court will fix a fair value for the Dissenting Shares of all Dissenting Vasogen Shareholders.

If a Dissenting Vasogen Shareholder fails to strictly comply with the requirements of the Dissent Rights set out in the Interim Order, it will lose its Dissent Rights, New IPC will return to the Dissenting Vasogen Shareholder the certificates representing the Dissenting Shares that were delivered to New IPC, if any, and if the Arrangement is completed, that Dissenting Vasogen Shareholder will be deemed to have participated in the Arrangement on the same terms as a Vasogen Shareholder.

If a Dissenting Vasogen Shareholder strictly complies with the foregoing requirements of the Dissent Rights, but the Arrangement is not completed, Vasogen will return to the Dissenting Vasogen Shareholder the certificates delivered to Vasogen by the Dissenting Vasogen Shareholder, if any.

Vasogen Shareholders should consult their legal advisors with respect to the legal rights available to them in relation to the Arrangement and the Dissent Rights.

All notices of dissent to the Arrangement pursuant to Section 190 of the CBCA should be sent to Vasogen Inc., c/o McCarthy Tétrault LLP at 66 Wellington Street West, Suite 5300, Toronto Dominion Bank Tower, Toronto, Ontario, Canada M5K 1E6, Attention: Geoff Hall.

VOTING INFORMATION AND GENERAL PROXY MATTERS FOR IPC US SHAREHOLDERS

Solicitation of Proxies

This Joint Circular is furnished in connection with the solicitation of proxies by and on behalf of the management of IPC US for use at the IPC US Meeting and any adjournment(s) or postponement(s) thereof. No person has been authorized to give any information or to make any representation in connection with the Arrangement or any other matters to be considered at the IPC US Meeting other than those contained in this Joint Circular and, if given or made, any such information or representation must not be relied on as having been authorized. All costs associated with the solicitation of proxies by or on behalf of management of IPC US will be borne by IPC US.

Appointment and Revocation of Proxies

Accompanying this Joint Circular is a form of proxy for use at the IPC US Meeting. If you are unable to attend the IPC US Meeting in person, please exercise your right to vote by completing the enclosed form of proxy and returning it to John Allport, Vice-President Legal Affairs and Licencing of IntelliPharmaCeutics Ltd. at 30 Worcester Road, Toronto, Ontario, fax: (416) 798-3007. A form of proxy must be received by IPC US at or prior to the IPC US Meeting or, if the IPC US Meeting is adjourned or postponed, not later than the time of the adjourned or postponed IPC US Meeting, or any further adjournment or postponement thereof. Failure to so deposit a form of proxy shall result in its invalidation. Late proxies may be accepted or rejected by the chairman of the IPC US Meeting at his discretion, however the chairman is under no obligation to accept or reject any particular late proxy.

The persons named in the enclosed form of proxy are directors or officers of IPC US. An IPC US shareholder wishing to appoint a person (who need not be an IPC US shareholder) to represent such IPC US shareholder at the IPC US Meeting other than the persons designated in the accompanying form of proxy may do so either by inserting such person’s name in the blank space provided in the appropriate form of proxy or by completing another form of proxy and in either case sending or delivering the properly completed and signed form of proxy to IPC US prior to the IPC US Meeting or, if the IPC US Meeting is adjourned or postponed, not later than the time of the adjourned or postponed IPC US Meeting, or any further adjournment or postponement thereof, in accordance with the delivery procedures noted above.

An IPC US shareholder who has given a form of proxy may revoke it as to any matter on which a vote has not already been cast at the IPC US Meeting pursuant to its authority by an instrument in writing executed by such IPC US shareholder or by his or her attorney duly authorized in writing or, if the IPC US shareholder is a corporation, by an officer or attorney thereof duly authorized and deposited either at the above-mentioned office of IPC US on or before the last Business Day preceding the day of the IPC US Meeting, or any adjournment(s) or postponement(s) thereof, or with the chairman of the IPC US Meeting on the day of the IPC US Meeting, or any adjournment(s) or postponement(s) thereof.

Signature of Proxy

The form of proxy must be executed by the IPC US shareholder or his or her attorney authorized in writing, or if the IPC US shareholder is a corporation, the form of proxy should be signed in its corporate name under its corporate seal by an authorized officer whose title should be indicated. A proxy signed by a person acting as attorney or in some other representative capacity should reflect such person’s capacity following his signature and should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with IPC US).

Exercise of Discretion of Proxy

On any ballot that may be called for at the IPC US Meeting, the persons named in the accompanying form of proxy will vote (or withhold from voting) the IPC US Shares in respect of which they are appointed in accordance with the direction of the IPC US shareholder appointing them and, if the IPC US shareholder specifies a choice with respect to any matter to be acted upon which the holders of such shares are entitled to vote, the IPC US Shares will be voted accordingly. In the absence of such direction, such IPC US Shares will be voted FOR the approval of the IPC US Merger Resolution. The accompanying form of proxy confers discretionary authority upon the persons named therein with respect to amendments to or variations of the matters identified in the notice of meeting and with respect to other matters that may properly be brought before the IPC US Meeting. As at the date of this Joint Circular, management of IPC US knows of no such amendments, variations or other matters to be brought before the IPC US Meeting.

Advice to Non-Registered IPC US Shareholders

Only registered IPC US Shareholders (i.e. stockholders of record) or the persons they appoint as their proxies are permitted to vote at the IPC US Meeting. Some of the IPC US Shareholders are non-registered IPC US Shareholders because the shares they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust corporation through which they purchased the shares. IPC US Shares beneficially owned by a non-registered IPC US shareholder are registered either: (i) in the name of an intermediary that the non-registered IPC US shareholder deals with in respect of the IPC US Shares (intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a clearing agency (such as CDS Clearing and Depository Services Inc.) of which the intermediary is a participant. In accordance with applicable securities law requirements, IPC US will have distributed copies of the notice of meeting and this Joint Circular, among other things (collectively, the “IPC US Meeting Materials”) to the clearing agencies and intermediaries for distribution to non-registered IPC US Shareholders.

Intermediaries are required to forward the IPC US Meeting Materials to non-registered IPC US Shareholders unless a non-registered IPC US shareholder has waived the right to receive them. Intermediaries often use service companies to forward the IPC US Meeting Materials to non-registered IPC US Shareholders. Generally, non-registered IPC US Shareholders who have not waived the right to receive IPC US Meeting Materials will be given a voting instruction form which is not signed by the intermediary and which, when properly completed and signed by the non-registered Shareholder and returned to the intermediary or its service company, will constitute voting instructions (often called a “voting instruction form”) which the intermediary must follow. Non-registered IPC US Shareholders should follow carefully the instructions provided in the voting instruction form by using one of the described methods provided to vote their IPC US Shares.

The purpose of this procedure is to permit non-registered IPC US Shareholders to direct the voting of the IPC US Shares they beneficially own. Should a non-registered IPC US shareholder who receives the above form wish to vote at the IPC US Meeting in person (or have another person attend and vote on behalf of the non-registered IPC US shareholder), the non-registered IPC US shareholder should follow the instructions provided by his or her broker, custodian, nominee or other intermediary or its service company. A non-registered IPC US shareholder should carefully follow the instructions of his or her broker, custodian, nominee or other intermediary or its service company, as the case may be, including those regarding when and where the voting instruction form is to be delivered.

If you are a beneficial owner of shares (i.e. a non registered owner) who wishes to vote in person at the IPC US Meeting you must obtain a legal proxy from your broker, banker, or other intermediary and present it to the inspector of election with your ballot to be able to vote at the IPC US Meeting.

A non-registered IPC US shareholder who wishes to revoke a waiver of the right to receive IPC US Meeting Materials and to vote his or her IPC US Shares, change his or her vote or revoke a voting instruction form must, in sufficient time in advance of the IPC US Meeting, provide written notice to his or her broker, custodian, nominee or other intermediary or its service company, as the case may be, and follow the instructions provided by such intermediary or service company.

Voting Securities and Principal Holders of Voting Securities

As at the date hereof, 6,023,944 IPC US Common Shares and 10,850,000 IPC US Special Voting Shares were issued and outstanding. Each IPC US Common Share and each IPC US Special Voting Share entitles the registered holder thereof to one vote on all matters to be acted upon at the IPC US Meeting. The record date for the determination of IPC US Shareholders entitled to receive notice of the IPC US Meeting has been fixed at September 21, 2009. In accordance with the provisions of the DGCL, IPC US will prepare a list of registered holders of IPC US Shares as of such record date. Each registered holder of IPC US Shares named in the list will be entitled to vote the shares shown opposite his or her name on the list at the IPC US Meeting. All such registered holders of IPC US Shares of record are entitled either to attend and vote thereat in person the respective IPC US Shares held by them or, provided a completed and executed proxy shall have been delivered to the registered office of IPC US or Jersey Transfer within the time specified in the attached notice of meeting, to attend and vote thereat by proxy the respective IPC US Shares held by them.

To the knowledge of the directors and executive officers of IPC US, as of the date hereof the only persons that beneficially own, directly or indirectly, or control or direct voting securities of IPC US carrying more than 10% of the voting rights attached to the voting securities of IPC US are as follows:

Name		Number of IPC US Special Voting Shares		Percentage of Issued and Outstanding IPC US Special Voting Shares
IntelliPharmaCeutics Inc.(1)		10,850,000		100	%

(1) A privately-held company owned and controlled by Drs. Isa and Amina Odidi and their family trust, to be renamed “Odidi Holdings Inc.” in connection with the IPC Arrangement.

Approval Agreements

Certain IPC US Shareholders have entered into agreements pursuant to which each of them has agreed to vote any IPC US Shares he or she holds in favour of the IPC US Merger Resolution. These IPC US Shareholders own, in the aggregate, approximately 60% of the issued and outstanding IPC US Common Shares and 100% of the issued and outstanding Special Voting Shares and accordingly, represent sufficient votes to assure the approval of the IPC US Merger Resolution at the IPC US Meeting.

Interests of Certain Persons in the IPC Arrangement and Merger

Certain directors and senior officers of IPC US have interests in the IPC Arrangement and Merger that are different from the interests of IPC US Shareholders generally. These interests relate primarily to the appointment of certain IPC US directors and officers as directors and officers of New IPC following completion of the Arrangement and Merger and the exchange of certain IPC US Options for options to acquire shares of New IPC and the possible repayment by New IPC of certain loans made by such persons to the IPC Companies. For details in respect of these interests, see “The Arrangement and Merger — Interests of Certain Persons in the Arrangement — IPC US Directors and Officers”.

Date, Time and Place of the IPC US Meeting

Matters to Be Considered

At the IPC US Meeting, IPC US Shareholders will be asked to consider and, if deemed advisable, to pass a resolution approving the Merger, pursuant to which Vasogen US will be merged with and into IPC US, the separate existence of Vasogen US will cease and IPC US will continue as the surviving corporation in the Merger under the name “IntelliPharmaCeutics Ltd.”. See Appendix “E” to this Joint Circular for the full text of the IPC US Merger Resolution.

Quorum and Votes Required

The presence of persons entitled to vote at the IPC US Meeting, either as shareholder or proxyholder, and holding or representing more than one-third of the outstanding shares of IPC US having voting power will constitute a quorum for the IPC US Meeting.

Approval of the IPC US Merger Resolution requires the affirmative vote of holders of a majority of the IPC US Common Shares and the IPC US Special Voting Shares entitled to vote at the IPC US Meeting, voting as separate classes. The IPC US Board has determined that the Arrangement and Merger are in the best interests of IPC US and unanimously recommends that IPC US Shareholders vote “FOR” the approval of the IPC US Merger Resolution.

PROXIES RECEIVED PURSUANT TO THIS SOLICITATION WILL BE VOTED “FOR” THE IPC US MERGER RESOLUTION, UNLESS THE IPC US SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS OR HER IPC US SHARES ARE TO BE VOTED AGAINST SAID RESOLUTION.

Appraisal Rights of IPC US Shareholders

In connection with the Merger, holders of record of IPC US Shares who comply with the procedures summarized below will be entitled to appraisal rights for their IPC US Shares if the Merger is completed. Under Section 262 of the DGCL (“Section 262”), as a result of completion of the Merger, holders of IPC US Shares with respect to which appraisal rights are properly demanded and perfected and not withdrawn or lost are entitled, in lieu of receiving shares of New IPC, to be paid the “fair value” of their shares at the effective time of the Merger (the “Merger Effective Time”) (exclusive of any element of value arising from the accomplishment or expectation of the Merger) judicially determined and paid to them in cash. IPC US is required to send a notice to each IPC US shareholder of the availability of appraisal rights not less than twenty days prior to the special meeting. This Joint Proxy Circular constitutes such notice to IPC US Shareholders.

The following is a brief summary of Section 262 that sets forth the procedures for demanding statutory appraisal rights. This summary is qualified in its entirety by reference to Section 262, a copy of the text of which is attached to this Joint Circular as Appendix “O”. The following summary does not constitute any legal or other advice nor does it constitute a recommendation that IPC US Shareholders exercise their appraisal rights, if any, under Section 262.

IPC US Shareholders of record who desire to exercise their appraisal rights must satisfy all of the following conditions.

An IPC US shareholder who desires to exercise appraisal rights must (i) not vote in favour of adoption of the Merger Agreement and (ii) deliver in the manner set forth below a written demand for appraisal of its IPC US Shares to IPC US before the vote on the IPC US Merger Resolution at the IPC US Meeting. While a vote against the Merger or an abstain will satisfy the condition specified in subparagraph (i) it will not satisfy the condition specified in subparagraph (ii). Any IPC US shareholder who votes in favour of adoption of the merger agreement will forfeit their right to seek appraisal of their IPC US Shares. The return of a signed proxy card that does not specify abstinence or a vote against the IPC US Merger resolution shall constitute a vote in favour and result in the loss of appraisal rights.

A demand for appraisal must be executed by or for the IPC US shareholder, fully and correctly, as the IPC US shareholder’s name appears on the certificates representing the shares. If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by the fiduciary. If shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by all joint owners. An authorized agent, including an agent of two or more joint owners, may execute the demand for appraisal for an IPC US shareholder or record; however, the agent must identify the record owner and expressly disclose that, in exercising the demand, the agent is acting as agent for the record owner. In addition, the IPC US shareholder must continuously hold the IPC US Shares of record from the date of making the demand through the Merger Effective Time.

A person, such as a broker, who holds shares as a nominee for others may exercise appraisal rights with respect to the shares held for all or less than all beneficial owners of shares as to which the holder is the record owner. In that case, the written demand must set forth the number of shares covered by the demand. Where the number of shares is not expressly stated, the demand will be presumed to cover all shares outstanding in the name of the record owner.

Beneficial owners who are not record owners and who intend to exercise appraisal rights should instruct the record owner to comply strictly with the statutory requirements with respect to the exercise of appraisal rights before the vote on the IPC US Merger Resolution at the IPC US Meeting. A beneficial owner of shares held in street name who desires to assert appraisal rights with respect to those shares must take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record owner of the shares. Shares held through banks, brokerage firms and other financial institutions are frequently deposited with and held of record in the name of a nominee of a central security depositary, such as Cede & Co., the Depositary Trust Company’s nominee. Any IPC US shareholder desiring to assert appraisal rights with respect to such shares who held such shares through a brokerage firm, bank or other financial institution is responsible for ensuring that the demand for appraisal is made by the record holder. The IPC US shareholder should instruct such firm, bank or institution that the demand for appraisal must be made by the record holder of the shares, which might be the nominee of a central security depositary if the shares have been so deposited.

As required by Section 262, a demand for appraisal must be in writing and must reasonably inform the IPC US of the identity of the IPC US shareholder of record (which might be a nominee as described above) and of such holder’s intention to seek appraisal of such shares.

IPC US Shareholders of record who elect to demand appraisal of their shares must mail or deliver their written demand to: IntelliPharmaCeutics Ltd., 30 Worcester Road, Toronto, Ontario, Canada M9W 5X2, Attention: Corporate Secretary. The written demand for appraisal should specify the IPC US shareholder’s name and mailing address, the number of shares owned, and that the IPC US shareholder is demanding appraisal of his or her shares. The written demand must be received by IPC US prior to the taking of the vote on the IPC US Merger Resolution at the IPC US Meeting. Neither voting (in person or by proxy) against, abstaining from voting on the IPC US Merger Resolution at the IPC US Meeting will alone suffice to constitute a written demand for appraisal within the meaning of Section 262.

In addition, the IPC US shareholder must not vote the IPC US Shares in favour of the IPC US Merger Resolution. A proxy that is signed and does not contain voting instructions will, unless revoked, be voted in favour of the IPC US Merger Resolution, will constitute a waiver of that IPC US shareholder’s right of appraisal and will nullify any previously written demand for appraisal. Therefore, an IPC US shareholder who submits a proxy and who wishes to exercise appraisal rights must indicate that such IPC US shareholder’s shares are to be voted against the IPC US Merger Resolution or to abstain from voting on that resolution.

Within 10 days after the Merger Effective Time, IPC US, as the surviving corporation in the Merger, must notify each holder of IPC US Shares who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favour of the IPC US Merger Resolution, that the Merger has become effective.

Within 120 days after the Merger Effective Time, but not thereafter, either IPC US, as the surviving corporation in the Merger, or any IPC US shareholder who has timely and properly demanded appraisal of such IPC US shareholder’s shares and who has complied with the required conditions of Section 262 and is otherwise entitled to appraisal rights may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the IPC US Shares of all IPC US Shareholders who have properly demanded appraisal. IPC US, as the surviving corporation, has no obligation, and no present intention, to file such a petition and holders of IPC US Shares should not assume that IPC US will file a petition. Accordingly, it will be the obligation of the holders of IPC US Shares to initiate all necessary action to perfect their appraisal rights in respect of their IPC US Shares within the time prescribed in Section 262. The failure of an IPC US shareholder to file a petition within the specified period could nullify the IPC US shareholder’s previously written demand for appraisal since if a petition for appraisal is not timely filed, then the right to an appraisal will cease. A person who is the beneficial owner of IPC US Shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file such a petition.

Within 120 days after the Merger Effective Time, any IPC US shareholder who has complied with the provisions of Section 262 of the DGCL to that point in time may receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares not voted in favour of the IPC US Merger Resolution and with respect to which IPC US has received demands for appraisal, and the aggregate number of holders of those IPC US Shares. The surviving company must mail this statement to the IPC US shareholder within the later of 10 days of receipt of the request or 10 days after expiration of the period for delivery of demands for appraisal.

If a petition for an appraisal is timely filed by a holder of IPC US Shares, a copy thereof is served upon IPC US, as the surviving corporation, after a hearing on such petition, the Delaware Court of Chancery will determine which IPC US Shareholders are entitled to appraisal rights and may require the IPC US Shareholders demanding appraisal who hold certificated shares to submit their stock certificates to the court for notation of the pendency of the appraisal proceedings, and any IPC US shareholder who fails to comply with such direction may be dismissed from such proceedings. The Delaware Court of Chancery thereafter will appraise the IPC US Shares owned by those IPC US Shareholders,

determining the fair value of the IPC US Shares exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest to be paid, if any, upon the amount determined to be the fair value.

In determining fair value, the Delaware Court of Chancery is to take into account all relevant factors. In Weinberger v. UOP, Inc., et al., the Delaware Supreme Court discussed the considerations that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “fair price obviously requires consideration of all relevant factors involving the value of a company”. The Delaware Supreme Court stated that in making this determination of fair value the court must consider “market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which were known or which could be ascertained as of the date of merger and which throw any light on future prospects of the merged corporation . . .”. The Delaware Supreme Court construed Section 262 to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered”. The Delaware Supreme Court noted, however, that Section 262 provides that fair value is to be determined “exclusive of any element of value arising from the accomplishment or expectation of the merger”. In Cede & Co v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value”, but which rather applies only to the speculative elements of value arising from such accomplishment or expectation.

IPC US Shareholders considering seeking appraisal should bear in mind that the fair value of the IPC US Shares determined under Section 262 could be more than, the same as, or less than the value of the shares of New IPC which they are entitled to receive pursuant to the Merger if they do not seek appraisal of the IPC US Shares. In addition, Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenter’s exclusive remedy. The Delaware Court of Chancery will also determine the amount of interest, if any, to be paid upon the amounts to be received by persons whose IPC US Shares have been appraised.

The cost of the appraisal proceeding may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable in the circumstances. Upon application of an IPC US shareholder seeking appraisal rights, the Delaware Court of Chancery may order that all or a portion of the expenses incurred by such IPC US shareholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all shares entitled to appraisal. In the absence of such a determination of assessment, each party bears its own expenses.

From and after the Merger Effective Time, no IPC US shareholder who has demanded appraisal rights shall be entitled to vote any IPC US Shares subject thereto for any purpose or to receive payment of dividends or other distributions thereon (except dividends or other distributions payable to the IPC US Shareholders of record at a date prior to the Merger Effective Time).

At any time within 60 days after the date of completion of the Merger, any former IPC US shareholder of IPC US who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such IPC US shareholder’s demand for appraisal and to accept the New IPC Shares as provided in the Merger Agreement. After this period, the IPC US shareholder may withdraw such IPC US shareholder’s demand for appraisal and receive the New IPC Shares as provided in the Merger Agreement only with the written consent of the surviving corporation in the Merger. If no petition for appraisal is filed with the Delaware Court of Chancery within 120 days after the Merger Effective Time, IPC US Shareholders’ rights to appraisal shall cease and all IPC US Shareholders shall be entitled only to receive the New IPC Shares as provided in the Merger Agreement. In as much as the parties to the Merger Agreement have no obligation to file such a petition, and have no present intention to do so, any IPC US shareholder who desires that such petition be filed is advised to file it on a timely basis. No appraisal proceeding in the Delaware Court of Chancery may be dismissed as to any IPC US shareholder without the approval of the Delaware Court of Chancery, which may be conditioned upon such terms as the Delaware Court of Chancery deems just.

The above is only a summary and is expressly subject to the provisions of Section 262 of the DGCL, the full text of which is reproduced in its entirety in Appendix “O” to this Joint Circular. IPC US is not required to notify, and IPC US will not notify, IPC US Shareholders of the time periods within which action must be taken in order for an IPC US shareholder to perfect the IPC US shareholder’s appraisal rights. It is recommended that any IPC US shareholder wishing to exercise appraisal rights should seek legal advice, as failure to comply strictly with the provisions of the DGCL may result in the loss or unavailability of the appraisal rights.

THE ARRANGEMENT AND MERGER

Overview of the Arrangement and Merger

The following description of the Arrangement is qualified in its entirety by reference to the full text of the Plan of Arrangement the current form of which is attached hereto as Appendix “A” to this Joint Circular and which may be further amended and adjusted in accordance with the Cervus Arrangement Agreement and the IPC Arrangement Agreement each of which are incorporated by reference in this Joint Circular. Each of these documents should be read carefully in their entirety.

If the Cervus Arrangement Resolution, the IPC Arrangement Resolution and the IPC US Merger Resolution are passed, and all other conditions to the closing of the Arrangement and Merger are satisfied or waived, the Arrangement will be implemented by way of a Court-approved plan of arrangement under the CBCA. Pursuant to the Plan of Arrangement, at the Effective Time, the following transactions, among others, will occur:

Cervus Arrangement Steps

(b) one minute following the Effective Time, the Cervus GP Shares held by Dissenting Cervus GP Shareholders will be transferred to Cervus GP and such Dissenting Cervus GP Shareholders shall cease to be the holders of such Cervus GP Shares and to have any rights as holders of Cervus GP Shares other than the right to be paid fair value for such Cervus GP Shares by Cervus GP;

(g) six minutes following the Effective Time,

(i) New Vasogen will adopt the New Vasogen Option Plan;

(iv) each of the Vasogen 2006-7 Warrants will become New Vasogen Warrants on the basis of one New Vasogen Warrant for each Vasogen 2006-7 Warrant held; and

(v) each of the Vasogen DSUs will be exercised for such number of New Vasogen Shares on the basis of as if they had been exercised for Vasogen Shares that the holder would have been entitled to as is determined under the Vasogen DSUP;

(h) seven minutes following the Effective Time, Cervus shall loan to Vasogen the Cervus Loan Amount and Vasogen will issue and deliver to Cervus the Cervus Loan Promissory Note;

new class of common shares of Vasogen; (iv) create an unlimited number of “Preferred Shares”, a new class of preferred shares of Vasogen issuable in series; (v) designate that the rights, privileges, conditions and restrictions attaching to such share classes;

(l) eleven minutes after the Effective Time, the Cervus GP Shares (excluding those held by Dissenting Cervus GP Shareholders) shall be transferred to Vasogen in exchange for $1.00 per Cervus GP Share so transferred;

(o) fourteen minutes after the Effective Time, each three Cervus Deferred Units shall be exchanged for two Cervus Corporation Deferred Share Rights;

(p) fifteen minutes after the Effective Time, the incumbent directors of Vasogen will, and will be deemed to, have resigned and be replaced, as directors by the directors of Cervus GP;

(r) seventeen minutes following the Effective Time, Vasogen Subco shall be wound-up and shall transfer to New Vasogen all of its property, liabilities and assets;

(s) eighteen minutes following the Effective Time, Vasogen Subco will be dissolved;

(t) the auditors of Vasogen will be KPMG LLP;

IPC Arrangement Steps

(u) nineteen minutes following the Effective Time:

(i) all of the IPC US Special Voting Shares shall be transferred to IPC Newco in exchange for one IPC Newco Share; and

(E) each of the New Vasogen Warrants will become such number of New IPC Warrants for each New Vasogen Warrant as is determined on the basis of the Vasogen Exchange Ratio;

(x) twenty-two minutes following the Effective Time and subject to the completion of the Merger and pursuant to the terms of the Merger Agreement, New IPC will issue New IPC Shares to the former IPC US Shareholders in respect of the remaining IPC US Shares outstanding prior to giving effect to the Merger with New IPC Shares issued for IPC US Common Shares on the basis of the IPC Exchange Ratio;

(i) the number of New IPC Shares subject to each New IPC Option shall be determined by applying the IPC Exchange Ratio to the number of IPC US Common Shares subject to each IPC US Option; and

(z) the initial auditors of New IPC will be Deloitte and Touche LLP.

Full particulars of the Arrangement are contained in the Plan of Arrangement attached as Appendix “A” to this Joint Circular.

The Merger

At the Merger Effective Time, by virtue of the Merger and the Arrangement, and without any further action of the part of any party, the following shall occur:

Post Arrangement and Merger

Effective Date (other than an estimated 541,575 New Vasogen Shares to be issued upon exercise of Vasogen DSUs and certain IPC US Common Shares to be issued to a broker by IPC US in connection with the IPC Arrangement), (iii) completion of the Cervus Arrangement, and (iv) a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 0.559061, then there will be approximately 11,030,843 New IPC Shares outstanding of which approximately 9,486,525 New IPC Shares (approximately 86%) will be held by the former holders of IPC US Shares and approximately 1,544,318 New IPC Shares (approximately 14%) will be held by the former Vasogen Shareholders. The number of New IPC Shares outstanding upon completion of the Arrangement and Merger to be held by the former holders of IPC US Shares and former Vasogen Shareholders may vary depending on the IPC Exchange Ratio and the Vasogen Exchange Ratio to be determined within the range specified in this Joint Circular.

Implementation of Only the Cervus Arrangement

If the Cervus Arrangement Resolution is passed but the IPC Arrangement Resolution and/or the IPC US Merger Resolution are not passed or other conditions to the IPC Arrangement are not satisfied or waived, and all other conditions to the closing of the Cervus Arrangement are satisfied or waived, then the Plan of Arrangement will be amended in accordance with section 6.1(b) of the Cervus Arrangement Agreement to exclude the “IPC Arrangement Steps” and the remainder of the Plan of Arrangement will be modified as applicable to give effect to the removal of such steps, provided however, that (i) the exchange ratio of New Vasogen Shares for Vasogen Shares in step (f) described above (see “The Arrangement and Merger — Overview of the Arrangement and Merger”) will be amended to give effect to a share consolidation such that each Vasogen Share will be exchanged for a number of New Vasogen Shares within the range of 0.166667 to 1.00, with the specific number to be determined by the Board at or prior to the Vasogen Board meeting, and (ii) the corresponding exchange ratios in step (g) in respect of Vasogen Options, Vasogen 2006-7 Warrants and Vasogen DSUs will be modified in the same manner. The Cervus Arrangement will then be implemented by way of such a Court-approved Plan of Arrangement under the CBCA. Pursuant to the modified Plan of Arrangement, at the Effective Time, the “Cervus Arrangement Steps”, among others, will occur in the order specified above.

Implementation of Only the IPC Arrangement

If the IPC Arrangement Resolution and the IPC US Merger Resolution are passed but the Cervus Arrangement Resolution or other conditions to the Cervus Arrangement are not satisfied or waived, and all other conditions to the closing of the IPC Arrangement are satisfied or waived, then the Plan of Arrangement will be amended in accordance with section 2.3 of the IPC Arrangement Agreement to exclude the “Cervus Arrangement Steps” and the remainder of the Plan of Arrangement will be modified as applicable to give effect to the removal of such steps, provided however, that (i) references to “New Vasogen” will be modified such that they refer to “Vasogen”, and (ii) references in step (w) above (see “The Arrangement and Merger — Overview of the Arrangement and Merger”) to the Vasogen Exchange Ratio will be within the range of 0.05 and 0.10, and to the IPC Exchange Ratio will be modified such that it is within the range of 0.784961 and 1.569923, with the specific number in such range to be determined by the Vasogen Board or the IPC US Board, as applicable, at or prior to the Vasogen Meeting and the corresponding exchange ratios in step (w)(D) and (E) above in respect of New Vasogen Options, New Vasogen 2006-7 Warrants and New Vasogen DSUs will be modified in the same manner. The IPC Arrangement will then be implemented by way of a Court-approved plan of arrangement under the CBCA. Pursuant to the modified Plan of Arrangement, at the Effective Time, the “IPC Arrangement Steps”, among others, will occur in the order specified above.

Fractional Shares

Pursuant to the Plan of Arrangement and the Merger, no fractional shares will be issued as a result of the Arrangement or the Merger. In the event that a holder would otherwise be entitled to a fractional share upon completion of the Arrangement or the Merger, as the case may be, such fraction shall be rounded to the nearest whole number, with fractions of 0.50 rounded down.

Benefits of the Arrangement and Merger for Shareholders of Vasogen and IPC US

The Vasogen Board and the IPC US Board each believe that the Arrangement and Merger will offer a number of benefits to the shareholders of both Vasogen and IPC US, including the following:

· assuming completion of the Cervus Arrangement, the resulting corporation will obtain an additional $7,500,000 in gross proceeds of non-dilutive financing;

· IPC US Options and Vasogen Options will be exchanged for New IPC Options on an economically-equivalent basis; and

· it is a condition to the closing of the IPC Arrangement that upon completion of the IPC Arrangement the New IPC Shares be (i) listed for trading on the TSX or the TSX Venture Exchange and (ii) listed for trading on NASDAQ or, if such NASDAQ listing cannot be maintained, application will have been made to have the New IPC Shares quoted for trading on the OTCBB. As at the date of this Joint Circular applications have been made to list the New IPC Shares on the TSX and to list the New IPC Shares on NASDAQ. There can be no assurance that approvals will be obtained in respect of such listing and quotation and there can be no assurance that if such approvals are not obtained, that the parties will not waive such condition in whole or in part. As of the date hereof, New IPC does not have conditional listing approval for any stock exchange or market. See “Risk Factors” and “The Arrangement and Merger — IPC Arrangement Agreement — Conditions of Closing”.

Background Regarding Vasogen in respect of the Arrangement and Merger

On April 14, 2008 Vasogen announced that it had implemented a strategic restructuring plan to significantly reduce its cash burn rate and focus its efforts on opportunities that the Vasogen Board and management believed were most likely to provide long-term shareholder value. This plan re-focused Vasogen’s resources on the development of its VP series of drugs while Vasogen sought alternatives to fund further development of the Celacade™ System, Vasogen’s technology for the treatment of chronic heart failure. On the same date Vasogen also announced that it had retained JMP to assist it in exploring other potential strategic alternatives with the goal of enhancing shareholder value.

During May 2008, JMP distributed a non-confidential information package to those parties who might have been interested in a potential transaction with Vasogen and began to reach out to a target list of companies. In total JMP, at the instruction of Vasogen, reached out to approximately 100 companies with respect to Vasogen. Where there was interest, a further non-confidential package was provided and, when appropriate, a confidentiality agreement was entered into. During the period from June through August 2008, Vasogen conducted meetings with numerous companies that expressed interest in a potential strategic transaction with Vasogen.

On July 2, the Vasogen Board held a meeting during which it received an update on the status of the strategic review process. There was discussion about the various companies that had been contacted and those that expressed interest in further discussions (including an affiliate of the IPC Companies). At that meeting the Vasogen Board also reviewed the status of Vasogen’s VP series of drugs, development plans and required cash resources to continue to pursue the development of the VP series programs. Taking all factors into consideration, the Vasogen Board decided that it would be in the best interest of Vasogen to reduce expenditures related to the development of the VP series of drugs pending the completion of the ongoing strategic review. On July 3, Vasogen announced that it had implemented additional restructuring plans to further reduce its cash burn rate.

On July 31, 2008 the Vasogen Special Committee (then consisting of Dr. Eldon Smith, Tom Clarke, and David Elsley) met and began to short list the proposals that had been received to date. JMP’s perspective was also independently sought on the proposals received. The Vasogen Special Committee used various criteria to assess the proposals including:

· the valuation placed on Vasogen and the potential target and the rationale for such valuations;

· the combined company’s anticipated cash runway;

· capital raised to date by the potential target;

· current shareholders of the potential target;

· financial analysis of the potential target;

· prospective milestones and news flow of the potential target;

· institutional investor attractiveness;

· potential future dilution to Vasogen Shareholders;

· the projected valuation of the resulting combined company;

· development risk;

· third party validation of technology;

· pipeline of products in development;

· existing investor support;

· recent milestones achieved by the potential target;

· strength of the potential target’s science/technology, clinical results where applicable, and management team;

· stage of development of the potential target;

· value, if any, placed on Vasogen’s intellectual property;

· ability of the potential target to consummate a transaction; and

· required public company infrastructure.

Based on these and other criteria and input from JMP, the Vasogen Special Committee ranked the proposals, developed a short list of companies and requested that Vasogen management follow up with these companies to gather further information.

Following a series of meetings, the Vasogen Special Committee narrowed the short list down to four potential target companies and scheduled face-to-face meetings for the week of August 25, 2008. The Vasogen Special Committee met with three of these companies, including an affiliate of the IPC Companies. The fourth company on the list withdrew itself from the process referencing the conditions of the equity markets. At the conclusion of the week of August 25, the Vasogen Special Committee was unanimous in their view that the IPC Companies was the preferred option. To avoid potential conflict of interest, Vasogen management had not participated in the selection process leading to the identification of the IPC Companies as the preferred option. The Vasogen Special Committee advised the Vasogen Board of its recommendation with respect to the IPC Companies and the reasons for their recommendation. These reasons included:

· the IPC Companies proposal provided the highest valuation to Vasogen securityholders;

· based on information made available in respect of the IPC Companies, it anticipated a comparatively short timeline to profitability and cash flow break even;

· there was potential to develop significant shareholder value in the near term if the IPC Companies met even half of their anticipated financial milestones;

· development risk was mitigated through a product portfolio which comprised 15 products in various stages of development, a number of which were partnered through funded arrangements;

· IPC Opco’s first ANDA filing had been made with the FDA and market launch in the United States of the product subject of the ANDA was anticipated in 2010;

· the IPC Companies had demonstrated proven expertise from a technical and product development standpoint;

· the two major shareholders, Drs. Isa and Amina Odidi (holding over 60% of IPC US’s voting shares) were committed to be heavily vested in developing shareholder value; and

· the IPC Companies demonstrated an ability to effectively control their cash burn rate in advancing their programs to date.

On September 9, 2008 the Board met and considered a number of issues with respect to a potential letter of intent with an affiliate of the IPC Companies including the duration of the exclusivity period, the expected timing of the due diligence and definitive agreement processes, the potential options should Vasogen not reach a definitive agreement with the IPC Companies. The Board resolved to pursue a non-binding letter of intent with an affiliate of the IPC Companies while continuing to assess other options including the potential to realize value from Vasogen’s accumulated tax attributes. During the subsequent negotiation of a non-binding letter of intent with an affiliate of the IPC Companies, the Vasogen Special Committee continued to communicate with other companies on the short list.

On October 15, 2008, the Vasogen Special Committee met to review a revised draft non-binding letter of intent from an affiliate of the IPC Companies, a revised proposal from another company on the short list and certain other strategic alternatives. Representatives from JMP joined the call to provide their perspective on the non-binding letter of intent from an affiliate of the IPC Companies and the other alternatives being considered by the Vasogen Special Committee. Vasogen’s tax advisors also joined the call to provide their perspective on certain other strategic alternatives involving Vasogen’s accumulated tax attributes. The Vasogen Special Committee agreed to recommend to the Vasogen Board the execution of the non-binding letter of intent with an affiliate of the IPC Companies which was subsequently approved by the Vasogen Board. A non-binding letter of intent was signed on October 17, 2008 with an affiliate of the IPC Companies and the companies proceeded to conduct due diligence and negotiate definitive agreements.

On November 25, 2008 the Vasogen Board met and was provided an update on the strategic initiatives, including an update on the discussions and the proposed transaction timeline with the IPC Companies. The Vasogen Board also discussed alternatives to a transaction with the IPC Companies, including the potential to realize value from Vasogen’s accumulated tax attributes and a potential liquidation scenario. The timing and risks of all alternatives were discussed. The Board agreed that Vasogen should continue discussions with the IPC Companies and at the same time make inquires of its advisors as to the feasibility to realize value from Vasogen tax attributes.

A further meeting of the Vasogen Board was held on December 2, 2008 at which external counsel, JMP and Vasogen’s tax advisors attended. The Vasogen Board was provided an update on the strategic initiatives. After lengthy discussion the Vasogen Board (with the President and Chief Executive Officer declaring his potential conflict of interest and abstaining from the vote) authorized management to continue to work towards finalizing an agreement with the IPC Companies, while concurrently gathering further information that would be necessary should a strategy to realize value from Vasogen’s tax attributes be pursued. Vasogen engaged PricewaterhouseCoopers LLP (“PWC”) to assist with respect to the tax attributes and related necessary analysis.

On December 31, 2008, Tom Clarke resigned from the Vasogen Special Committee and the Vasogen Board. He was replaced on the Vasogen Special Committee by Terrence Gregg.

During December 2008 and January 2009 the Vasogen Special Committee and the Vasogen Board were provided with further updates on the strategic initiatives and met a number of times to address the status of the negotiations with the IPC Companies and the analysis being conducted by PWC.

On January 21, 2009 the Vasogen Special Committee met to review and consider a proposed engagement with PricewaterhouseCoopers Corporate Finance Inc. (“PWCCF”) to pursue opportunities to realize value from Vasogen’s accumulated tax attributes. The status of outstanding issues with the IPC Companies along with the associated timeline risks was also reviewed. On January 30, 2009, at the recommendation of the Vasogen Special Committee, the Vasogen Board authorized (with the President and Chief Executive Officer declaring his potential conflict of interest and abstaining from voting) Vasogen to enter into an engagement with PWCCF and at the same time continue negotiations with the IPC Companies. Vasogen entered into an engagement letter with PWCCF on February 9, 2009.

In February, March and April 2009 the Vasogen Special Committee and the Vasogen Board met periodically, were provided with updates on strategic initiatives and provided direction to management in this regard. During this time Vasogen entered non-disclosure agreements with five parties regarding potential to realize value from Vasogen’s tax attributes. Discussions continued periodically with the IPC Companies during this period.

On April 29, 2009 a Vasogen Board meeting was held to review the status of the strategic review process. At the conclusion of this meeting the Vasogen Board authorized management to continue the process with PWCCF and, once there was sufficient confidence in completing a transaction to realize value from Vasogen’s tax attributes, approach the IPC Companies and update the IPC Companies on the process that had been undertaken with respect to Vasogen’s tax attributes and discuss the potential of Vasogen completing both transactions. Again, the President and Chief Executive Officer declared his potential conflict of interest in respect of this decision by the Vasogen Board and abstained from voting. The Vasogen Board was provided with further updates through May 2009 with regards to the strategic initiatives.

At the annual meeting of Vasogen Shareholders, held on May 27, 2009, Terrance Gregg did not stand for re-election to the Vasogen Board. As a result, John Villforth and Dr. Calvin Stiller were appointed to the Vasogen Special Committee.

On June 1, 2009, Vasogen received a non-binding letter of intent from a third party with respect to a non-dilutive financing that would involve Vasogen’s tax attributes. On June 2, 2009, Vasogen advised the IPC Companies of the receipt of the letter of intent and requested a meeting to discuss the potential of Vasogen completing both transactions which would necessitate certain changes in the draft agreements between IPC and Vasogen. On June 8, 2009 Vasogen received a second non-binding letter of intent from Cervus with respect to a non-dilutive financing that would involve Vasogen’s tax attributes.

On June 12, 2009, Vasogen signed the first non-binding letter of intent that was received and began a mutual due diligence process. On June 25, 2009 the other party to the letter of intent for reasons specific to their organization, made a decision not to move forward any further and the letter of intent was terminated.

Vasogen’s advisors, PWCCF subsequently approached Cervus and on June 29, 2009, a non-binding letter of intent was signed with Cervus and the process of mutual due diligence and the drafting of definitive agreements were initiated, a process that continued during July and August. Concurrently, the draft agreements between Vasogen and the IPC Companies were negotiated to reflect Vasogen completing both the transaction with Cervus and transaction with the IPC Companies.

On August 13, the Vasogen Special Committee met together with representatives of management, outside legal counsel and JMP to review the agreements with Cervus and the IPC Companies. Outside legal counsel provided an overview of the draft agreements with both Cervus and the IPC Companies. JMP presented an overview of the financial aspects of the transaction with the IPC Companies. JMP then delivered orally, and subsequently confirmed in writing, its opinion that, as of August 13, 2009, and subject to the limitations and assumptions set forth in its opinion the IPC Exchange Ratio pursuant to the Plan of Arrangement was fair, from a financial viewpoint, to Vasogen. The Vasogen Special Committee, after consultation with financial and legal advisors and after careful consideration of various factors described below, under the heading “The Arrangement and Merger - Recommendation of the Vasogen Special Committee”, unanimously recommended that the Vasogen Board approve the proposed Cervus Arrangement and the IPC Arrangement and Merger.

The Vasogen Board met immediately following the meeting of the Vasogen Special Committee and, after considering the opinion from JMP, the recommendation of the Vasogen Special Committee and advice of legal counsel and after carefully considering the various factors described below, under the heading “The Arrangement and Merger - Recommendation of the Vasogen Board”, the Vasogen Board unanimously resolved (with the President and Chief Executive Officer declaring his potential conflict of interest and abstaining from voting) that the Arrangement is fair to Vasogen and its securityholders and is in the best interests of Vasogen, authorized Vasogen to settle, finalize and enter into the Cervus Arrangement Agreement, the IPC Arrangement Agreement and related agreements and resolved unanimously (with the interested director abstaining) to recommend to Vasogen Shareholders that they vote their Vasogen Shares in favour of the Cervus Arrangement Resolution and the IPC Arrangement Resolution.

Throughout the evening of August 13 and August 14, Vasogen negotiated with Cervus and the IPC Companies such that the final documentation was settled and executed after the close of markets on August 14, 2009 and a press release issued prior to the opening of trading on August 17, 2009.

Opinion of the Financial Advisor to Vasogen

In connection with this mandate, JMP prepared and delivered the Fairness Opinion. The Fairness Opinion states that, in the opinion of JMP, as of August 13, 2009, and based on and subject to the limitations and assumptions set forth therein, the IPC Exchange Ratio (as described therein) is fair, from a financial point of view, to Vasogen.

The full text of the Fairness Opinion describing the assumptions made, procedures followed, information reviewed, matters considered and limitations on the review undertaken by JMP is attached as Appendix “F” to this Joint Circular, and is incorporated in its entirety in this document. The Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety.

Shareholders are encouraged to read the Fairness Opinion carefully in its entirety. The Fairness Opinion is directed only to the fairness, from a financial point of view, of the IPC Exchange Ratio (as described therein) to Vasogen and does not address any other aspect of the IPC Arrangement or any aspect of the Cervus Arrangement or any other transaction. The Fairness Opinion does not address the underlying business decision to effect the IPC Arrangement or the relative merits of the IPC Arrangement as compared to any alternative business strategies which might exist for Vasogen, or the effect of any other transaction in which Vasogen might engage. The Fairness Opinion does not constitute a recommendation to the Vasogen Board or to any Vasogen Shareholder or any other person as to how to vote or act with respect to any matters relating to the Arrangement or otherwise. JMP did not express any opinion as to the prices at which Vasogen Shares or New IPC Shares may be traded at any time, or as to the value of New IPC Shares when issued pursuant to the IPC Arrangement or otherwise, or as to the viability of the combined company.

The Fairness Opinion was provided solely to the Vasogen Board for their use in considering the IPC Arrangement. In arriving at the Fairness Opinion, JMP, with Vasogen’s consent, assumed and relied, without independent verification, upon the accuracy and completeness of all information and data furnished to or otherwise reviewed by or discussed with JMP. JMP expressed no opinion as to the Cervus Arrangements or its effects and assumed, with Vasogen’s consent, that the Cervus Arrangement would have no financial impact on Vasogen or IPC (other than with respect to the monetization of certain specified assets). JMP also assumed, with Vasogen’s consent, among other things, that Vasogen was not engaged in, and had no intent to engage in, any activity that might result in the generation of any revenue, other than with respect to certain disregarded assets. The Fairness Opinion is necessarily based on financial, economic, market and other circumstances and conditions as in effect on the date thereof, and events occurring after the date thereof may affect the Fairness Opinion and the assumptions used in preparing it.

Under the terms of the JMP engagement, Vasogen has agreed to pay JMP customary fees for its financial advisory services in connection with the IPC Arrangement and the fairness opinion. In addition, Vasogen has agreed to reimburse JMP for reasonable out-of-pocket expenses and to indemnify JMP and certain related parties against liabilities arising out of the engagement of JMP.

Recommendation of the Vasogen Special Committee

Having undertaken a thorough review of, and carefully considered, the Cervus Arrangement and the IPC Arrangement and Merger, including consulting with independent financial and legal advisors (as described above under “The Arrangement and Merger — Background Regarding Vasogen in respect of the Arrangement and Merger”), the Vasogen Special Committee unanimously determined that the Cervus Arrangement and the IPC Arrangement are fair to the Vasogen Shareholders and each is in the best interests of Vasogen. In addition, the Vasogen Special Committee recommended that the Vasogen Board approve both the Cervus Arrangement and the IPC Arrangement and recommend that Vasogen Shareholders vote in favour of the both the Cervus Arrangement Resolution and the IPC Arrangement Resolution.

In the course of its evaluation of both the Cervus Arrangement and the IPC Arrangement, the Special Committee consulted with Vasogen’s senior management, legal counsel and financial advisors, reviewed additional information and considered a number of factors, including, among others, the following factors:

· assuming completion of the Cervus Arrangement, following the Arrangement and Merger, the Vasogen Shareholders will hold approximately 14% of the New IPC Shares, and New IPC, which will primarily carry on the business of IPC Opco, will be strengthened with the addition of at approximately $10,000,000 in Net Cash (as defined in the IPC Arrangement Agreement);

· the Fairness Opinion of JMP to the effect that as of the date of the opinion, and based on and subject to the assumptions and limitations set forth therein, the IPC Exchange Ratio contemplated in the IPC Arrangement (as described therein) is fair, from a financial point of view, to Vasogen. See “The Arrangement and Merger — Opinion of the Financial Advisor to Vasogen”;

· the value of the proposals made by IPC and Cervus relative to proposals made by other potential investors during the period Vasogen carried on its strategic review process;

· the extent of Vasogen’s ability to access the capital that it would require to continue to fund the ongoing development of its products on acceptable terms;

· historical information concerning Vasogen’s business, including Vasogen’s financial performance and condition, operations, technologies and intellectual property;

· the view of management as to Vasogen’s anticipated financial condition, results of operations and business both with and without giving effect to the Arrangement and Merger;

· in the event the IPC Arrangement is not completed but the Cervus Arrangement is completed, Vasogen’s business will have an additional $7,500,000 in gross proceeds of non-dilutive financing;

Recommendation of the Vasogen Board

In the course of its evaluation of the Cervus Arrangement and the IPC Arrangement, the Vasogen Board considered the process undertaken by the Vasogen Special Committee and received its recommendation, consulted with Vasogen’s senior management, legal counsel and financial advisors, reviewed a significant amount of additional information and considered and reviewed factors that the Special Committee reviewed and considered.

The foregoing discussion (see “The Arrangement and Merger — Background Regarding Vasogen in respect of the Arrangement and Merger” and “The Arrangement and Merger — Recommendation of the Vasogen Special Committee”) summarizes the material information and factors considered by the Vasogen Board in its consideration of the Cervus Arrangement and the IPC Arrangement. The Vasogen Board collectively reached its unanimous decision with respect to the Cervus Arrangement and the IPC Arrangement in light of the factors described above and other factors that each member of the Vasogen Board felt were appropriate. In view of the wide variety of factors and the quality and amount of information considered the Vasogen Board did not find it useful or practicable to and did not make specific assessments of, quantify, rank or otherwise assign relative weights to the specific factors considered in reaching its determination. Individual members of the Vasogen Board may have given different weight to different factors.

ACCORDINGLY, THE VASOGEN BOARD UNANIMOUSLY RECOMMENDS THAT VASOGEN SHAREHOLDERS VOTE “FOR” EACH OF THE CERVUS ARRANGEMENT RESOLUTION, THE IPC ARRANGEMENT RESOLUTION AND THE NEW IPC OPTION PLAN RESOLUTION.

In considering the Cervus Arrangement and the IPC Arrangement, the Vasogen Board recognized that there are risks associated with each of the Cervus Arrangement and the IPC Arrangement, including that some of the potential benefits described above may not be realized and that there may be costs associated with realizing these benefits. Please see the risks set forth under “Risk Factors” and those incorporated by reference herein.

The above discussion of the information and factors considered by the Vasogen Board is not intended to be exhaustive but is believed by the Vasogen Board to include the material factors it considered in its assessment of the Arrangement and Merger. In view of the wide variety of factors considered by the Vasogen Board in connection with its assessment of the Arrangement and Merger, and the complexity of such matters, the Vasogen Board did not consider it practical, nor did it attempt, to quantify, rank or otherwise assign relative weights to the foregoing factors that it considered in reaching its decision. In addition, in considering the factors described above, individual members of the Vasogen Board may have given different weights to various factors and may have applied different analysis to each of the material factors

considered by the Vasogen Board. The Vasogen Board recommended the Arrangement and Merger based upon the totality of the information presented to and considered by it.

Recommendation of the IPC US Board

After careful consideration of a number of factors, including consultation with legal advisors, the IPC US Board has unanimously determined that the Arrangement and Merger are in the best interests of IPC US, and has unanimously recommended that IPC US Shareholders vote in favour of the IPC US Merger Resolution. The determinations and recommendations of the IPC US Board are based upon a number of factors including, among others:

· Arrangement Agreement and Merger Agreement. The terms and conditions of the IPC Arrangement Agreement and Merger Agreement, including Vasogen’s representations, warranties and covenants, and the conditions to its obligations, are, in the judgment of IPC US and its advisors, reasonable and were the product of extensive negotiations between the IPC Companies and their advisors and Vasogen and its advisors.

· Approval of IPC US Shareholders and Separate Class Votes. The IPC US Board considers that the required shareholder approval protects the rights of IPC US Shareholders as the Merger is subject to approval by holders of a majority of IPC US Common Shares and IPC US Special Voting Shares entitled to vote at the IPC US meeting, each voting as a separate class.

· Approval Agreements. Holders of approximately 60% of the IPC US Common Shares and 100% of the IPC US Special Voting Shares have signed agreements with Vasogen and the IPC Companies pursuant to which such shareholders have agreed to vote in favour of the IPC US Merger Resolution at the IPC US Meeting.

ACCORDINGLY, THE IPC US BOARD UNANIMOUSLY RECOMMENDS THAT IPC US SHAREHOLDERS VOTE “FOR” THE IPC US MERGER RESOLUTION.

The Cervus Arrangement Agreement

The following description of certain material provisions of the Cervus Arrangement Agreement is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the Cervus Arrangement Agreement, a copy of which is incorporated by reference into this Joint Circular.

All capitalized terms used in this section, “The Cervus Arrangement Agreement” and not defined in this Joint Circular, have the meanings ascribed in the Cervus Arrangement Agreement, the Divestiture Agreement or the Indemnity Agreement, as applicable.

The Cervus Arrangement is being effected pursuant to the Cervus Arrangement Agreement. The Cervus Arrangement Agreement contains covenants, representations and warranties of and from each of Vasogen, Cervus and Cervus GP and various conditions precedent, both mutual and in favour of each of Vasogen and Cervus.

Representations and Warranties

The Cervus Arrangement Agreement contains customary representations and warranties of each of Cervus, Cervus GP and Vasogen relating to, among other things, organization, corporate and governmental authorizations in respect of the Arrangement litigation and the absence of any contravention or conflict with organizational documents or applicable law. Cervus and Cervus GP provided additional representations and warranties regarding the availability of funds. Vasogen provided additional representations and warranties regarding financial statements, the absence of certain changes and certain tax matters.

Covenants Regarding Non-Solicitation

Pursuant to Section 3.4 of the Cervus Arrangement Agreement, each of Cervus and Cervus GP has agreed to certain non-solicitation covenants as follows:

1. Each Party shall immediately cease and cause to be terminated all existing discussions and negotiations (including through any advisors or other parties on its behalf), if any, with any parties conducted before the date of the Cervus Arrangement Agreement with respect to any Acquisition Proposal (Cervus) and shall immediately request the return or destruction of all information provided to any third parties who have entered into a confidentiality agreement with such party relating to an Acquisition Proposal (Cervus) and shall use all reasonable commercial efforts to ensure that such requests are honoured.

2. Neither Party shall, directly or indirectly, do or authorize or permit any of its officers, directors, or employees or any financial advisor, expert or other representative retained by it to do, any of the following:

(a) solicit, facilitate, initiate or encourage any Acquisition Proposal (Cervus);

(b) enter into or participate in any discussions or negotiations regarding an Acquisition Proposal (Cervus), or furnish to any other person any information with respect to its business, properties, operations, prospects or conditions (financial or otherwise) in connection with an Acquisition Proposal (Cervus) or otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt of any other Person to do or seek to do any of the foregoing;

(c) waive, or otherwise forbear in the enforcement of, or enter into or participate in any discussions, negotiations or agreements to waive or otherwise forbear in respect of, any rights or other benefits under confidential information agreements executed in connection with an Acquisition Proposal (Cervus), including any “standstill provisions” thereunder; or

(d) accept, recommend, approve or enter into an agreement to implement an Acquisition Proposal (Cervus).

3. Notwithstanding any other provisions of the Cervus Arrangement Agreement, each Party and its officers, directors and advisers may:

(a) enter into or participate in any discussions or negotiations with a third party who (without any solicitation, initiation or encouragement, directly or indirectly, after the date of the Cervus Arrangement Agreement, by such party or any of its officers, directors, trustees or employees or any financial advisor, expert or other representative retained by it, whether or not such solicitation, initiation or encouragement was in relation to an Acquisition Proposal (Cervus) or a transaction that would constitute an Acquisition Proposal (Cervus) but for the fact that such transaction does not preclude, delay or have an adverse effect on, the Arrangement) has made an Alternative Proposal (Cervus) and, subject to execution of a confidentiality agreement with a standstill covenant that prevents such third party from making an Acquisition Proposal (Cervus) without the written consent of the Vasogen Board or the board of directors of Cervus GP, as the case may be, (provided that such confidentiality agreement shall provide for disclosure thereof (along with all information provided thereunder) to the Other Party as set out below), may furnish to such third party information concerning such party and its business, properties and assets if:

(i) the Vasogen Board or the board of directors of Cervus GP, as the case may be, has consulted with outside counsel as to whether it is necessary to do so in order to properly discharge its fiduciary duties under Applicable Laws or the constating documents of such party; and

(ii) prior to furnishing such information to or entering into or participating in any such discussions or negotiations with such third party, such party provides prompt notice to the Other Party to the effect that it is furnishing information to or entering into or participating in discussions or negotiations with such third party together with a copy of the confidentiality agreement referenced above and if not previously provided to the Other Party, copies of all information provided to such third party that is relevant to the Arrangement concurrently with the provision of such information to such third party, and provided further that such party shall notify the Other Party orally of, and disclose in writing, any inquiries, offers or proposals with respect to an Alternative Proposal (which written disclosure shall include, without limitation, a copy of any such proposal (and any amendments or supplements thereto), the identity of the third party making it, if not previously provided to the Other Party, copies of all information provided to such third party and all other information reasonably requested by the Other Party), within 24 hours of the receipt thereof, shall keep the Other Party informed of the status and details of any such inquiry, offer or proposal and answer the Other Party’s questions with respect thereto; or

(b) accept, recommend, approve or enter into an agreement to implement an Alternative Proposal (Cervus), if the Vasogen Board or board of directors of Cervus GP, as the case may be, determines the Alternative Proposal to be in the best interests of its shareholders or Cervus Unitholders, as the case may be, and such Party complies with its obligations set out below.

4. Each Party in receipt of an Alternative Proposal (Cervus) (a “Receiving Party”) shall give the Other Party (the “Responding Party”), orally and disclose in writing, at least three Business Days advance notice of any decision by the Vasogen Board or the board of directors of Cervus GP, as the case may be, to accept, recommend, approve or enter into an agreement to implement the Alternative Proposal (Cervus), which notice shall confirm that the Vasogen Board or the board of directors of Cervus GP, as the case may be, has determined that such Alternative Proposal (Cervus) constitutes an Alternative Proposal (Cervus), shall identify the third party making the Alternative Proposal (Cervus) and shall provide a true and complete copy thereof and any amendments thereto. During such three Business Day period, the Receiving Party agrees not to accept, recommend, approve or enter into any agreement to implement such Alternative Proposal (Cervus) and not to release the third party making the Alternative Proposal (Cervus) from any standstill provisions and shall not withdraw, redefine, modify or change its recommendation in respect of the Arrangement.

5. Each Party agrees that all information that may be provided to it by the Other Party with respect to any Alternative Proposal (Cervus) shall be confidential and shall not be disclosed or used except in order to enforce its rights under the Cervus Arrangement Agreement in legal proceedings.

6. Each Party shall ensure that its officers, directors and employees and any investment bankers or other advisers or representatives retained by it are aware of the non-solicitation provisions of the Cervus Arrangement Agreement. Cervus shall be responsible for any breach of such provisions by Cervus GP or any of its officers, employees, investment bankers, advisers or representatives, and Vasogen shall be responsible for any breach of such provisions by its officers, directors, employees, investment bankers, advisers or representatives.

Termination

Pursuant to Section 7.1 of the Cervus Arrangement Agreement, each of Vasogen, Cervus and Cervus GP have agreed as follows:

1. The Cervus Arrangement Agreement may be terminated prior to the Effective Time:

(a) by mutual written consent of Cervus and Vasogen.

(b) by either Cervus or Vasogen at any time prior to the Effective Time:

(i) if the Effective Time has not occurred on or prior to the Deadline, except that the right to terminate this Agreement under this clause (i) shall not be available to any party to this Agreement whose failure to fulfill any of its obligations has been a principal cause of, or resulted in, the failure of the Effective Time to occur by such date;

(ii) if the Vasogen Meeting is held and the Cervus Arrangement Resolution is not passed at the Vasogen Meeting (or any adjournment or postponement thereof);

(iii) if the Cervus Meeting is held and the required Cervus Resolution is not passed at the Cervus Meeting (or any adjournment or postponement thereof);

(iv) if any law makes the consummation of the Cervus Arrangement or the transactions contemplated by the Cervus Arrangement Agreement illegal or otherwise prohibited, and such law has become final and non-appealable; or

(v) in order for a Party to enter into an Alternative Proposal (Cervus) provided that such Party has complied with its obligations set forth above regarding an Alternative Proposal (Cervus) and concurrently therewith pays the Other Party the Termination Fee.

(c) by Vasogen at any time prior to the Effective Time if Vasogen is not in material breach of its obligations under the Cervus Arrangement Agreement and Cervus or Cervus GP breaches or fails to perform any of its representations, warranties, covenants or agreements contained in this Agreement which breach or failure to perform would cause a default or failure of the one of the conditions precedent to be satisfied by Cervus, Cervus GP or is incapable of being cured or, if curable, is not cured in accordance with the Cervus Arrangement Agreement.

(d) by Cervus at any time prior to the Effective Time if each of Cervus and Cervus GP is not in material breach of its obligations under the Cervus Arrangement Agreement and Vasogen breaches or fails to perform any of its representations, warranties, covenants or agreements contained in this Agreement which breach or failure to perform would cause a default or the failure of the one of the conditions precedent to be satisfied by Vasogen and is incapable of being cured or, if curable, is not cured in accordance with the Cervus Arrangement Agreement.

Expenses and Termination Fees

Pursuant to Section 7.3 of the Arrangement Agreement, each of Vasogen and Cervus has agreed as follows:

1. Except as set forth below, all costs and expenses incurred in connection with the Arrangement Agreement shall be paid by the party incurring such cost or expense.

2. In the event of termination of the Cervus Arrangement Agreement under the various circumstances set forth below, either Vasogen or Cervus shall owe the Other Party the Termination Fee, if any, as follows:

(a) if Vasogen terminates the Cervus Arrangement Agreement in the event the:

(i) resolution to be passed at either of the Cervus or the Cervus GP meeting is not passed or breach of the Cervus Arrangement Agreement by Cervus or Cervus GP, Cervus will pay the Termination Fee; or

(ii) the Cervus Arrangement Resolution is not approved or Vasogen enters into Alternative Proposal (Cervus), Vasogen will pay the Termination Fee;

(b) if Cervus terminates the Cervus Arrangement Agreement in the event the:

(i) the Cervus Arrangement Resolution is not approved or a breach by Vasogen of the Cervus Arrangement Agreement then Vasogen will pay to Cervus the Termination Fee; or

(ii) Cervus Resolution or Cervus GP Resolution is not approved or Cervus enters into an Alternative Proposal (Cervus), Cervus will pay the Termination Fee.

For the purpose of the Cervus Arrangement Agreement “Termination Fee” means the amount equal to (i) $250,000; plus (ii) the amount to be reimbursed to the applicable Party for its documented third party transaction costs (including legal and accounting fees), with such third party transaction costs not to exceed $250,000.

Conditions Precedent to the Cervus Arrangement

Pursuant to Article 5 of the Cervus Arrangement Agreement, each of Vasogen, Cervus and Cervus GP have agreed as follows:

1. Section 5.1 - Mutual Conditions Precedent. The obligations of the parties to complete the transactions contemplated by the Cervus Arrangement Agreement are subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions, any of which may be waived by the mutual consent of the Parties:

(a) the Interim Order: (i) shall have been granted in form and substance satisfactory to each of Vasogen, Cervus and Cervus GP, acting reasonably; (ii) shall provide that the obligation to comply with any Dissent Rights in connection with the Arrangement, including without limitation the obligation to pay the fair value of such Vasogen Shares to the holders of any such securities which have exercised such Dissent Rights, shall be an obligation of New Vasogen; and (iii) shall not have been set aside or modified in a manner unacceptable to Vasogen, Cervus and Cervus GP, acting reasonably, on appeal or otherwise;

(b) the Cervus Arrangement Resolution, the resolution of the Cervus GP Shareholders approving the Cervus Arrangement and the resolution of the Cervus Unitholders approving the Cervus Arrangement shall have been passed by the requisite majorities specified in the Interim Order and in form and substance satisfactory to each of Vasogen, Cervus and Cervus GP, acting reasonably;

(c) the Final Order shall have been granted in form and substance satisfactory to Vasogen, Cervus and Cervus GP, acting reasonably and shall not have been set aside or modified in any manner unacceptable to Vasogen, Cervus and Cervus GP, acting reasonably, on appeal or otherwise;

(d) the Articles of Arrangement to be filed in accordance with the Arrangement shall be in form and substance satisfactory to each of Vasogen, Cervus and Cervus GP, acting reasonably and be capable of being filed in sufficient time to ensure that the Arrangement may become effective on or prior to the Deadline; and

(e) there shall be no action taken under any existing Applicable Laws, nor any statute, rule, regulation or order which is enacted, enforced, promulgated or issued by any Governmental Authority, that:

(i) makes illegal or otherwise directly or indirectly restrains, enjoins or prohibits the Arrangement or any other transactions contemplated herein; or

(ii) results in a judgment or assessment of material damages directly or indirectly relating to the transactions contemplated herein.

The foregoing conditions are for the mutual benefit of Vasogen, Cervus and Cervus GP and may be asserted by each of Vasogen, Cervus and Cervus GP regardless of the circumstances and may be waived by Vasogen, Cervus and Cervus GP (with respect to such Party) in their sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Vasogen, Cervus or Cervus GP may have.

2. Section 5.2 - Additional Conditions to Obligations of Cervus and Cervus GP. The obligations of Cervus and Cervus GP to consummate the transactions contemplated by the Cervus Arrangement Agreement is subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions:

(a) except as affected by the transactions contemplated by the Cervus Arrangement Agreement, the representations and warranties of Vasogen contained in the Cervus Arrangement Agreement shall be true in all material respects (provided that those representations which are subject to qualifications or limitations as to materiality or Material Adverse Effect or Material Adverse Change shall be true in all respects) as at the Effective Date, or as at the date specified in such representation or warranty, where applicable, with the same effect as though such representations and warranties had been made at and as of such time and Vasogen shall have complied in all material respects with its covenants in the Cervus Arrangement Agreement and Cervus and Cervus GP shall have received a certificate to that effect dated the Effective Date from the Chief Executive Officer and Chief Financial Officer of Vasogen acting solely on behalf of Vasogen and not in their personal capacity and without personal liability, to the best of their respective information and belief having made reasonable inquiry and Cervus and Cervus GP will have no knowledge to the contrary;

(b) in the event the Interim Order provides Cervus Unitholders with dissent rights, holders of not more than 5% of the outstanding Units shall have exercised rights of dissent in respect of the Cervus Arrangement that have not been withdrawn as of the Effective Date;

(c) immediately prior to the Effective Time, the aggregate of federal tax account balances in respect of the Tax Pools set out in the Vasogen Disclosure Letter shall not be less than 95% of the amounts on the Effective Date set out in the Vasogen Disclosure Letter, and the applicable expiry horizons will not be materially different than as set out in the Vasogen Disclosure Letter;

(d) at the Effective Time: (i) Vasogen shall have no Subsidiaries other than those being transferred to Vasogen Subco or New Vasogen in connection with the Cervus Arrangement or agreements of any nature to acquire any Subsidiary, or to acquire or lease any other business, assets or operations; (ii) Vasogen shall not have in effect any bonus plan, commission plan, profit sharing plan, pension plan, royalty plan or arrangement or employee benefit plan for the benefit of any employees, officers, directors or shareholders of Vasogen that will not be transferred to New Vasogen or terminated, whether pursuant to the Cervus Arrangement or otherwise; (iii) Vasogen will have no officers, employees or consultants other than those being transferred to New Vasogen in connection with the Cervus Arrangement; and (iv) there shall be no amounts payable by Vasogen under any obligations or liabilities of Vasogen to pay any amount to its officers, directors, employees or consultants or any other person not dealing at arm’s length with Vasogen or any associate or affiliate of any such persons including all severance, termination, change of control arrangements, pay to stay or retention arrangements and salaries and bonuses (other than those transferred to New Vasogen);

(e) there shall not have been after the date hereof and prior to the Effective Time any legislative enactment or public announcement of any change or proposed change in law (including a specific proposal to amend the Tax Act publicly announced by the Department of Finance of Canada) that, in the opinion of Cervus acting reasonably, could be expected to result in any material impairment of, or materially adversely affect the benefit to Cervus, or the Completion of the Cervus Arrangement or on the ability of Vasogen to utilize the Tax Pools referred to in the Vasogen Disclosure Letter after the Effective Date;

(f) during the period commencing immediately prior to the date hereof and ending immediately prior to the Effective Time, there will not have been any “acquisition of control” of Vasogen, as that term is used for purposes of the Tax Act with the exception of any “acquisition of control” that has occurred on or after the date hereof as a result of the execution of the Cervus Arrangement Agreement or the completion of the transactions contemplated herein, including the Plan of Arrangement;

(g) the Vasogen Shares to be issued by Vasogen (including the Vasogen Shares to be issued pursuant to the Arrangement) shall be conditionally approved for listing so as to be listed and posted for trading on the TSX Venture Exchange on the first trading day following the Effective Date and the Vasogen Shares shall be delisted from the TSX and NASDAQ;

(h) Cervus shall have received resignations and releases, in the form settled between Vasogen and Cervus on or prior to the date hereof, from the directors and officers of Vasogen;

(i) between the date hereof and the Effective Time, there shall not have occurred any Material Adverse Change in respect of Vasogen;

(j) there shall be no security registrations against Vasogen under the Personal Property Security Act (Ontario) or other security registration legislation in other jurisdictions, with the exception of registrations relating to specific goods which, for greater certainty, excludes registrations relating to equipment or other categories of personal property where no specific good is listed, or such other arrangements shall have been made with respect to the discharge of such security registrations as are satisfactory to Cervus;

(k) New Vasogen shall have entered into the Indemnity Agreement;

(l) Vasogen, Vasogen Subco and New Vasogen shall have entered into the Divestiture Agreement;

(m) the Cervus Required Approvals and the Cervus GP Required Approvals shall have been received by Cervus and Cervus GP on a basis acceptable to each of Cervus and Cervus GP, acting reasonably; and

(n) the Tax Return of Vasogen for the year ended November 30, 2008 shall have been filed on or before the Effective Date in form and content acceptable to Cervus, acting reasonably.

The foregoing conditions are for the exclusive benefit of Cervus and may be asserted by Cervus regardless of the circumstances or may be waived by Cervus in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Cervus may have.

3. Section 5.3 - Additional Conditions Precedent to the Obligations of Cervus. The obligations of Cervus to consummate the transactions contemplated by the Cervus Arrangement Agreement is subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions:

(a) except as affected by the transactions contemplated by the Cervus Arrangement Agreement, the representations and warranties of Cervus and Cervus GP contained in the Cervus Arrangement Agreement shall be true in all material respects (provided that those representations which are subject to qualifications or limitations as to materiality or Material Adverse Effect or Material Adverse Change shall be true in all respects) as at the Effective Date, or as at the date specified in such representation or warranty, where applicable, with the same effect as though such representations and warranties had been made at and as of such time and each of Cervus and Cervus GP shall have complied in all material respects with its covenants in the Cervus Arrangement Agreement and Vasogen shall have received a certificate to that effect dated the Effective Date from the Chief Executive Officer and Chief Financial Officer of Cervus GP acting solely on behalf of Cervus GP in its capacity as general parties of Cervus and not in their personal capacity and without personal liability, to the best of their respective information and belief having made reasonable inquiry and Vasogen will have no knowledge to the contrary;

(b) Cervus shall have provided to Vasogen evidence satisfactory to Vasogen, acting reasonably, that Cervus has sufficient funds available in cash to permit the funding by Cervus of Vasogen in the amount of $7,500,000;

(c) holders of not more than 5% of the outstanding Vasogen Shares shall have exercised rights of dissent in respect of the Cervus Arrangement Agreement that have not been withdrawn as of the Effective Date;

(d) Vasogen shall have entered into the Indemnity Agreement; and

(e) the Vasogen Required Approvals shall have been received by Vasogen on a basis acceptable to Vasogen, acting reasonably.

The foregoing conditions are for the exclusive benefit of Vasogen and may be asserted by Vasogen regardless of the circumstances or may be waived by Vasogen in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Vasogen may have.

The Divestiture Agreement

The following description of certain material provisions of the Divestiture Agreement is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the Divestiture Agreement, a draft copy of which is included as Exhibit E to the Cervus Arrangement Agreement that is incorporated by reference into this Joint Circular.

Vasogen Subco will acquire all of the assets of Vasogen and assume all of the obligations of Vasogen, with the exception of certain obligations related to taxes that may become payable resulting from the Arrangement pursuant to the terms of the Divestiture Agreement and in accordance with the Plan of Arrangement.

The Divestiture Agreement contains provisions to ensure that Subco receives all of the rights and obligations that are intended to be transferred as a result of the transfer of all of the assets of Vasogen. In particular, the Divestiture Agreement contains provisions that provide that Vasogen, following the completion of the Cervus Arrangement Agreement, will hold certain rights in trust for the benefit of Vasogen Subco and will take certain actions at the request, expense and direction of Vasogen Subco that are necessary or proper in order that the obligations of Vasogen may be performed in such a manner that the value of such assets are preserved and enure to the benefit of Vasogen Subco.

The Indemnity Agreement

The Cervus Arrangement Agreement provides that Vasogen and New Vasogen will enter into the Indemnity Agreement on or before the Effective Time. The Indemnity Agreement is designed to provide Vasogen (following the Arrangement) with indemnification from New Vasogen, the resulting entity that will carry on the business previously carried on by Vasogen, for claims relating to Vasogen’s and New Vasogen’s business that are brought against Vasogen in the future, subject to certain conditions and limitations.

The following is a summary of certain provisions of the Indemnity Agreement. This summary is qualified in its entirety by reference to the complete text of the Indemnity Agreement, a draft copy of which is attached as Exhibit B to the Cervus Arrangement Agreement that is incorporated by reference into this Joint Circular.

1. The Indemnity Agreement provides that New Vasogen is liable to Vasogen for all Losses which it may suffer, sustain, pay or incur, and will indemnify and hold Vasogen harmless from and against all Losses which may be brought against or suffered by Vasogen or which Vasogen may suffer, sustain, pay or incur arising out of, resulting from, attributable to or connected with:

(a) any debts, liabilities, commitments or obligations of any nature (whether matured or unmatured, accrued, fixed, contingent or otherwise) of any kind whatsoever resulting from any matters, actions, events, facts or circumstances related to the activities, affairs or business of Vasogen which occurred prior to the Effective Time, including without limitation, as a result of:

(i) Claims relating to the intellectual property of Vasogen or the activity of Vasogen and/or of its Subsidiaries in relation to intellectual property, including without limitation the development, reproduction, use, and sale or distribution, of all or any part thereof, which infringes upon, or misappropriates, the Intellectual Property Rights of any third party;

(ii) subject to the Tax Pool Claims, Claims relating to Taxes of Vasogen for any period of time prior to the Effective Time;

(iii) Claims related to any public disclosure of Vasogen, including without limitation the Public Record of Vasogen and any disclosure relating to Vasogen included in this Circular, for any period of time prior to the Effective Time;

(iv) any violation of Vasogen of Applicable Laws, including without limitation applicable securities laws, that occurred prior to the Effective Time;

(v) any failure of its constating documents to comply with the material terms of Vasogen or its Subsidiaries of any agreements, contracts, indentures, licenses, permits, approvals to which it is or was party or which it is or was subject to, or which has been entered into on its behalf at or prior to the Effective Time;

(vi) the operation, performance or liability of Vasogen’s products prior to the Effective Time;

(vii) Claims relating to employment by Vasogen of its employees for any period of time prior to the Effective Time, including without limitation, payment of wages, severance and remission of worker’s compensation insurance premiums;

(viii) Claims relating to personal injuries or property damage for any period of time prior to the Effective Time; or

(ix) Claims relating to violations of Environmental Laws or the release of Hazardous Materials for any period of time prior to the Effective Time,

(b) any debts, liabilities, commitments or obligations of any nature (whether matured or unmatured, accrued, fixed, contingent or otherwise) of any kind whatsoever resulting from any matters, actions, events, facts or circumstances related to the activities, affairs or business of New Vasogen which occur on or after the Effective Time; and

(c) any breach or failure of New Vasogen to perform or observe any covenant or agreement to be performed by them under the Cervus Arrangement Agreement on or after the Effective Time, as though such covenants and agreements survived the closing of the Arrangement.

2. The Indemnity Agreement also provides that Vasogen will be liable to New Vasogen for all Losses which it may suffer, sustain, pay or incur and will indemnify and hold New Vasogen harmless from and against all Losses which may be brought against or suffered by New Vasogen or which New Vasogen may suffer, sustain, pay or incur arising out of, resulting from, attributable to or connected with any failure of Cervus or Vasogen to perform or observe any covenant or agreement to be performed by it under the Cervus Arrangement Agreement or the Divestiture Agreement;

3. The Indemnity Agreement provides for certain compensation payments to be made by the parties depending on the final determination of the amount of certain Tax Pools of Vasogen to the extent that the balance of the Tax Pools are more than or less

than the amounts estimated at the Effective Date or to the extent that Vasogen’s Tax Pools are reduced below a certain amount as a result of their application to offset or reduce Vasogen’s Taxes, for any taxation year that ends before the Effective Date. New Vasogen’s obligations under the Indemnity Agreement relating to the Tax Pools are limited to an aggregate of $1,455,000 with a threshold amount of $50,000 before there is an obligation to make a compensation payment.

4. The ability of Vasogen to advance a claim against New Vasogen is subject to certain time limitations which vary depending on the nature of the indemnified matter.

5. The Indemnity Agreement provides detailed procedures for claims under the Indemnity Agreement which, in certain circumstances, gives New Vasogen the right to elect to take carriage and control of the dispute process relating to such claims.

The IPC Arrangement Agreement

The following description of certain material provisions of the IPC Arrangement Agreement is a summary only, is not comprehensive and is qualified in its entirety by reference to the full text of the IPC Arrangement Agreement, a copy of which is incorporated by reference into this Joint Circular. Shareholders are encouraged to read the IPC Arrangement Agreement in its entirety.

All capitalized terms used in this section, “The IPC Arrangement Agreement” and not defined in this Joint Circular, have the meanings ascribed in the IPC Arrangement Agreement.

The IPC Arrangement is being effected pursuant to the IPC Arrangement Agreement and the Merger Agreement. The IPC Arrangement Agreement contains covenants, representations and warranties of and from each of Vasogen, IPC US and IPC Opco and various conditions precedent, both mutual and in favour of each of Vasogen and IPC US and IPC Opco.

Following the date of the IPC Arrangement Agreement, Vasogen may make available to IPC Opco a loan of up to $500,000 (the “IPC Bridge Loan”) to be advanced in tranches subject to terms and conditions to be agreed upon by IPC Opco and Vasogen and evidenced by a grid promissory note in favour of Vasogen. The amount of the IPC Bridge Loan and any other amounts owing with respect thereto will be secured by charges reflected in a general security agreement over the assets of IPC Opco and guaranteed by each of IPC US and IntelliPharmaCeutics Inc. together with a general security agreement over the assets of each such entity and in all cases with such security ranking senior to all indebtedness of such parties. The IPC Bridge Loan will be used by IPC Opco to fund its operations and working capital (and will not be used to pay any amounts owing from time to time under the Shareholder Note or for payment of the transaction costs or expenses of any IPC Company in connection with the transactions contemplated herein). The IPC Bridge Loan will bear interest at a rate of 8% per annum and be payable when the principal amount becomes due and payable. The IPC Bridge Loan and any interest shall be repaid 90 days after the earlier of (i) the date Vasogen Shareholders vote against an Arrangement with IPC, (ii) the termination of the IPC Arrangement Agreement; and (iii) the termination of the Merger Agreement.

No amount has been made available to IPC Opco to date by Vasogen pursuant to terms of the proposed IPC Bridge Loan.

Representations and Warranties

The IPC Arrangement Agreement contains customary representations and warranties of each of IPC US, IPC Opco and Vasogen relating to, among other things, organization, corporate and governmental authorizations in respect of the Arrangement and Merger, the absence of any contravention or conflict with organizational documents or applicable law, the absence of any notices, consents, defaults or encumbrances in connection with the Arrangement, obligations that will come due or be accelerated by virtue of the Arrangement, capitalization, reporting and listing status and other securities law matters, preparation and presentation of financial statements, employee matters, intellectual property, the absence of certain changes or events, disclosure of liabilities, compliance with applicable laws, absence of material litigation, tax matters, material contracts and broker and other fees.

Conditions to Closing

The obligations of Vasogen and the IPC Companies to complete the Arrangement and Merger are subject to the fulfillment, on or before the Effective Time, of each of the following conditions precedent, each of which may only be waived by the mutual consent of Vasogen and the IPC Companies:

· the IPC Arrangement shall have been approved at the Vasogen Meeting by at least 662/3% of the total votes cast by Vasogen Shareholders present (in person or by proxy) and entitled to vote, and in accordance with any additional conditions which may be imposed by the Interim Order;

· the Merger Agreement shall have received all necessary approvals and the transactions contemplated thereby have been completed prior to or with effect as of or immediately following the Effective Time;

· the Interim Order and the Final Order shall each have been obtained in form and on terms reasonably satisfactory to each Vasogen and the IPC Companies, and shall not have been set aside or modified in a manner unacceptable to such parties, acting reasonably, on appeal or otherwise;

· all requisite domestic and foreign regulatory approvals and consents, including, without limitation, those of any stock exchanges, securities regulatory authorities or antitrust authorities, shall have been obtained on terms and conditions

satisfactory to Vasogen, IPC Opco and IPC US, acting reasonably, and all applicable domestic and foreign statutory or regulatory waiting periods, including the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if applicable to the transactions contemplated under the Arrangement and the Merger, shall have expired or been terminated, and no objection or opposition shall have been filed, initiated or made during any applicable statutory or regulatory period;

· no Governmental Entity shall have enacted, issued, promulgated, applied for (or advised either any Vasogen Company or any IPC Company in writing that it has determined to make such application), enforced or entered any law (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits, or which would give rise to any right to damages or other remedy as a result of, the consummation of the transactions contemplated by the IPC Arrangement Agreement or the Merger Agreement, or dissolves the Arrangement or the Merger, and no legal action in which any of the foregoing is sought shall be pending;

· Dissent Rights shall not have been exercised with respect to more than five percent (5%) of the Vasogen Shares, in the aggregate, in connection with the IPC Arrangement;

· Appraisal Rights shall not have been exercised with respect to more than three percent (3%) of the IPC US Shares, in the aggregate, in connection with the Merger;

· the IPC Arrangement Agreement shall not have been terminated in accordance with its terms; and

· the New IPC Shares, the New IPC Shares to be issued upon the exercise of options and warrants resulting from the existing options and warrants of Vasogen and IPC US, shall be approved for listing on the TSX Venture Exchange (unless such corporation has obtained approval to list on the TSX) and application shall have been made to have such common shares of New IPC quoted on the OTCBB pending only delisting of common shares of New IPC from NASDAQ and approval of a market maker in respect of such common shares on the OTCBB (unless such corporation has obtained approval to retain Vasogen’s quotation on NASDAQ).

The obligations of the IPC Companies to complete the IPC Arrangement are also subject to the following conditions precedent, each of which may be waived by IPC Opco:

· all covenants of Vasogen under the IPC Arrangement Agreement to be performed on or before the Effective Time shall have been duly performed by Vasogen in all material respects;

· the representations and warranties of Vasogen set forth in the IPC Arrangement Agreement shall be true and correct in all respects, without regard to any materiality qualifications, as though made on and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), except where the failure or failures of all such representations and warranties to be so true and correct in all respects has not and would not reasonably be expected to have a material adverse effect. In addition, the representations and warranties with respect to Vasogen Board approvals, organization and qualification, corporate authorization, enforceability of the IPC Arrangement Agreement and required consents, shall be true and correct in all respects;

· prior to the Effective Time, there shall not have occurred or have been disclosed to the public (if previously undisclosed to the public or any IPC Company), a material adverse effect with respect to Vasogen or any event or occurrence that would reasonably be expected to have a material adverse effect;

· Vasogen shall have, prior to the Effective Date, terminated certain specified leases and contracts and, in certain specified cases, used reasonable efforts to obtain full and final releases from the counterparty in respect of such particular contract in form and substance satisfactory to the IPC Companies (acting reasonably);

· the Vasogen Companies shall have Net Cash (calculated in accordance with the IPC Arrangement Agreement) at the Effective Time of (i) at least $10,000,000 in the event the transactions contemplated in the Cervus Agreement are completed as part of the Arrangement; or (ii) at least $4,000,000 in the event the transactions contemplated in the Cervus Agreements are not completed as part of the Arrangement; and

· all the required approvals and consents shall have been obtained by Vasogen to the reasonable satisfaction of the IPC Companies or waived by IPC Opco on behalf of all of the IPC Companies.

The obligation of Vasogen to complete the Arrangement is also subject to the following condition precedent, which may be waived by Vasogen:

· all covenants of IPC US and IPC Opco under the IPC Arrangement Agreement to be performed on or before the Effective Time shall have been duly performed by IPC US and IPC Opco, as the case may be, in all material respects;

· the representations and warranties of IPC US and IPC Opco, as the case may be, set forth in the IPC Arrangement Agreement shall be true and correct in all respects, without regard to any materiality qualifications, as though made on and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), except (A) that up to 1,700,000 of IPC US Common Shares may have been issued at a price not less than the value of such shares in relation to the Arrangement and such monies may have been provided by IPC US to IPC Opco for common shares of IPC Opco, all of which will be subject to the transactions

comprising the Arrangement, on the same terms as are applicable to other common shares in each company, and (B) where the failure or failures of all such representations and warranties of IPC US or IPC Opco, as the case may be, to be so true and correct in all respects has not or would not reasonably be expected to have a material adverse effect. In addition, the representations and warranties with respect to IPC US Board approvals and with respect to IPC US and IPC Opco organization and qualification, corporate authorization, enforceability of the IPC Arrangement Agreement and required consents, shall be true and correct in all respects;

· IntelliPharmaCeutics Inc. shall have, prior to the Effective Date, changed its corporate name to a name that does not include the word “IntelliPharmaCeutics” or any variation thereof that is confusingly similar to the name of IPC Opco or IPC US;

· the accrued liabilities, accounts payable and any other indebtedness of IPC US and IPC Opco as of the Effective Date (determined in accordance with the IPC Arrangement Agreement and not including the IPC Bridge Loan) shall not exceed the sum of U.S.$2,000,000 and an amount equal to the lesser of: (x) $750,000; and (y) any liabilities, accounts payable or other indebtedness incurred by IPC Opco and/or IPC US since December 31, 2008 in connection with efforts to further develop drug products, such as expenditures in respect of a specific drug product or project related thereto and, for greater certainty, will exclude any liabilities or expenses incurred or related to the transactions contemplated by the IPC Arrangement Agreement;

· the promissory note dated September 10, 2004 issued by IPC Opco to Isa Odidi and Amina Odidi (the “Shareholder Note”) shall have been amended to provide that the principal amount thereof shall be payable when payment is required solely out of (i) revenues earned by IPC Opco following the Effective Date and/or proceeds received by an IPC Company from any offering of its securities following the Effective Date and/or amounts received by IPC Opco for the scientific research tax credits received after the Effective Date for research expenses of IPC Opco incurred before the Effective Date and (ii) up to $1,000,000 from the Net Cash (as defined in the IPC Arrangement Agreement) in the event the transactions contemplated in the Cervus Agreements are completed as part of the Arrangement; and

· all the required approvals and consents shall have been obtained by the applicable IPC Company to the reasonable satisfaction of Vasogen or waived by Vasogen.

Mutual Covenants of IPC US and Vasogen

Under the IPC Arrangement Agreement, each of the IPC Companies and Vasogen has agreed to certain mutual covenants, including:

· it shall use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent as set forth in the IPC Arrangement Agreement to the extent the same is within its control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable laws to consummate the Arrangement, including using its commercially reasonable efforts to: (i) oppose, lift or rescind any injunction or restraining order against it or other order or action against it seeking to stop, or otherwise adversely affecting its ability to make and complete, the Arrangement; and (ii) co-operate with the other party in connection with the performance by it of its obligations thereunder;

· it shall not take any action, refrain from taking any commercially reasonable action, or permit any action to be taken or commercially reasonable action to not be taken, which is inconsistent with the IPC Arrangement Agreement or which would reasonably be expected to significantly impede the consummation of the Arrangement or to prevent or materially delay the consummation of the transactions contemplated hereby, in each case, except as permitted by the IPC Arrangement Agreement; and

· it shall perform all obligations required or desirable to be performed by it under the IPC Arrangement Agreement, cooperate with the other parties in connection therewith, and do all such other acts and things as may be necessary or desirable in order to consummate and make effective the Arrangement and Merger, including that it will:

(i) use all commercially reasonable efforts to obtain all necessary waivers, consents and approvals (other than any Regulatory Approval (IPC)) required to be obtained by it in connection with the Arrangement from other parties to certain contracts;

(ii) apply for and use all commercially reasonable efforts to obtain, and use all commercially reasonable efforts to assist the other parties to obtain, all Regulatory Approvals (IPC) relating to it and, in doing so, keep the other parties reasonably informed as to the status of the proceedings related to obtaining the Regulatory Approvals (IPC);

(iii) pay any requisite filing fees and applicable taxes in relation to any filing or application made in respect of the Regulatory Approvals (IPC) relating to it;

(iv) defend all lawsuits or other legal, regulatory or other proceedings against it challenging or affecting the IPC Arrangement Agreement or the consummation of the transactions contemplated thereby;

(v) use its commercially reasonable efforts to effect all necessary registrations, filings and submissions of information required by Governmental Entities from each of the IPC Companies or any of its affiliates relating to the Arrangement; and

(vi) use its commercially reasonable efforts to take all actions necessary to consummate and to effect all necessary registration filings and submissions required by Governmental Entities relating to the Merger Agreement.

The IPC Companies and Vasogen have each also agreed in favour of the other party that, subject to certain exceptions or as otherwise expressly permitted or specifically contemplated by the IPC Arrangement Agreement or otherwise required by applicable law or a Governmental Entity, it shall conduct its respective business in the ordinary course, consistent with past practice, including:

· it shall perform in all material respects its obligations under all contracts, maintain its books of account and records in the ordinary course of business and comply in all material respects with all laws applicable to it and to the conduct of its business;

· it shall not, directly or indirectly: (i) amend its constating documents; (ii) split or reclassify any of its shares, or declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of its shares; (iii) adjust, split, combine or reclassify its shares; (iv) issue, grant, sell or permit a lien to be created on, or agree to issue, grant, sell or cause or permit a lien to be created on, any of its shares or options or other rights to acquire its shares; (v) redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, or subject to a lien any of its outstanding securities; (vi) amend or modify the terms of any of its securities; (vii) reduce its stated capital; (viii) adopt a plan of liquidation or resolution providing for its liquidation or dissolution; (ix) amend its accounting policies or adopt new accounting policies in respect of taxes or otherwise, in each case except as required in accordance with generally accepted accounting principles; (x) make or change any material tax election, settle or compromise any material tax liability, file any tax return that amends a previously filed tax return or surrender any right to claim a material tax refund; (xi) authorize or propose any of the foregoing, or enter into, modify or terminate any of its material contracts with respect to any of the foregoing; or (xii) assign, transfer, license or sublicense any intellectual property;

· it shall not, directly or indirectly, except in the case of clauses (i), (iii) and (v) below (and, to the extent that it relates to the foregoing clauses, clause (vii) below), in the ordinary course of business consistent with past practice and in the case of clause (i) and (iv) in respect of IPC US and IPC Opco other than in respect of the IPC Bridge Loan:

(i) sell, pledge, lease, license, dispose of or cause or permit a lien to be created on any of its assets;

(ii) reorganize, amalgamate or merge with any other person;

(iii) acquire (by merger, amalgamation, consolidation or acquisition of shares or assets or otherwise) any corporation, partnership or other business organization or division thereof or any property or asset, or make any investment either by the purchase of securities, contributions of capital, property transfer, or purchase of any property or assets of any other person, or enter into or extend any option to acquire, or exercise an option to acquire, any property, if any of the foregoing would reasonably be expected to be material to the other party;

(iv) incur any debt or issue any debt securities or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances in excess of $20,000 individually or $50,000 in the aggregate, provided that IPC Opco may incur indebtedness for operating purposes of up to $1,000,000, and issue debt securities in respect thereof, to Dr. Isa Odidi, Dr. Amina Odidi and/or any person related to either of them on terms consistent with those contained in the Shareholder Note;

(v) make or commit to make capital expenditures or charitable contributions;

(vi) pay, discharge or satisfy any material claims, liabilities or obligations other than the payment, discharge of satisfaction of liabilities reflected or reserved against in their respective financial statements or otherwise fulfill its obligations under the IPC Arrangement Agreement including the payment of all transaction costs associated with the IPC Arrangement Agreement; or

(vii) waive, release, grant or transfer any rights of material value other than as permitted by the IPC Arrangement Agreement;

· other than in certain specified circumstances, it shall not (i) grant an increase in compensation in any form to any director or officer; (ii) take any action with respect to the grant of any change of control, severance or termination pay to any if its employees; (iii) enter into any employment agreement with any officer; (iv) increase any benefits payable under its current change of control, severance or termination pay policies; or (v) adopt or materially amend any employee plan;

· it shall not make any loans, advances or capital contributions to, or investments in or guarantee to any other person, or make any loans to any director or officer;

· it shall not waive, release, assign, settle or compromise any material legal action other than in the ordinary course of business consistent with past practice;

· it shall use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by it, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect: provided that it shall not place or renew any insurance (or re-insurance) policy for a term exceeding 12 months; and

· it shall not enter into or amend any contract with any broker, finder or investment banker.

Covenants Regarding Listing

Each of Vasogen, IPC US and IPC Opco have agreed to take all necessary steps to cause the New IPC Shares to be issued in connection with the Arrangement and the Merger and the New IPC Shares to be issued upon the exercise of options and warrants of Vasogen and IPC US (i) to be approved for listing on the TSX or the TSX Venture Exchange and (ii) for listing on NASDAQ or quotation on the OTCBB (pending only delisting of common shares of Vasogen from NASDAQ and approval of a market maker in respect of such common shares on the OCTBB at or prior to the Effective Time).

Covenants of the IPC Companies Regarding Approval Agreements and Regarding Net Cash

Under the IPC Arrangement Agreement, the IPC Companies also agreed to use their commercially reasonable efforts to assist Vasogen to obtain agreements from shareholders of IPC US representing up to 60% of the IPC US Common Shares pursuant to which such shareholders agree to vote in favour of the IPC US Merger Resolution, in addition to those delivered as of the date of the IPC Arrangement Agreement.

IPC Opco and IPC US each have agreed not to use the Net Cash (as defined in the IPC Arrangement Agreement and calculated as of the Effective Date) to pay any amounts owing from time to time under the Shareholder Note (other than up to $1,000,000 in the event the transactions contemplated in the Cervus Agreements are completed as part of the Arrangement) or for payment of the transaction costs or expenses of either IPC Opco or IPC US in connection with the transactions contemplated in the IPC Arrangement Agreement.

Covenants of Vasogen Regarding Acquisition Proposals (IPC) and IPC Companies Right to Match

Under the IPC Arrangement Agreement, if Vasogen receives any written Acquisition Proposal (IPC) that the Vasogen Board determines in good faith, after consultation with its financial advisors and outside counsel, constitutes or is likely to lead to a Superior Proposal (IPC), then Vasogen may furnish information with respect to Vasogen to the person making such Acquisition Proposal (IPC) and/or enter into, participate, facilitate and maintain discussions or negotiations with, and otherwise cooperate with or assist, the person making such Acquisition Proposal (IPC); provided that Vasogen is prohibited from disclosing any non-public information to such person without having entered into a confidentiality agreement with such person that contains provisions that are no less favourable in the aggregate to Vasogen and that are not individually or in the aggregate materially more favourable to such person than those contained in the confidentiality Agreement entered into with the IPC Companies, and provided that such confidentiality agreement may not include any provision calling for an exclusive right to negotiate with Vasogen and may not restrict Vasogen from complying with its obligation to provide the IPC Companies with a right to match any such proposal, and will promptly provide to the IPC Companies any non-public information concerning Vasogen provided to such other person which was not previously provided to the IPC Companies.

Under the IPC Arrangement Agreement, Vasogen has agreed to promptly (and in any event within 24 hours) notify the IPC Companies, at first orally and then in writing, of any actual or potential Acquisition Proposal (IPC), including a copy of any confidentiality agreement entered into by Vasogen, the identity of the person making such Acquisition Proposal (IPC) and the material terms and conditions thereof, and shall, at the IPC Companies’ reasonable request, inform it as to the status of developments and negotiations with respect to such Acquisition Proposal (IPC), including any changes to the material terms or conditions of such Acquisition Proposal (IPC).

The Vasogen Board is prohibited from effecting a Change of Recommendation (IPC) unless (i) Vasogen has received a bona fide Acquisition Proposal (IPC), (ii) the Vasogen Board determines in good faith, after consultation with its financial advisors and outside counsel, that such Acquisition Proposal (IPC) constitutes a Superior Proposal (IPC), (iii) Vasogen has provided the IPC Companies with a copy of such Acquisition Proposal (IPC), (iv) a five Business Day period (the “Matching Period”) has lapsed from the date (the “Notice Date”) that is the later of (a) the date the IPC Companies received written notice of Vasogen’s proposed determination to take such action, and (b) the date the IPC Companies received a copy of the Acquisition Proposal (IPC), (v) during the Matching Period, the IPC Companies shall have the opportunity (but not an obligation) to offer to amend the terms and conditions of the IPC Arrangement Agreement such that the Acquisition Proposal (IPC) would cease to be a Superior Proposal (IPC), (vi) after the Matching Period, the Vasogen Board (a) determines in good faith, after consultation with its financial advisors and outside counsel, that such Acquisition Proposal (IPC) continues to constitute a Superior Proposal (IPC) and (b) determines in good faith, after consultation with outside legal counsel, that failure to take such action would be inconsistent with its fiduciary duties under applicable law, and (vii) after the Matching Period, the Vasogen Board or any committee thereof effects a Change of Recommendation (IPC). Each successive material modification (including any increase in the proposed price) of any Acquisition Proposal (IPC) shall constitute a new Acquisition Proposal (IPC) for these purposes, provided that the Matching Period in respect of such new Acquisition Proposal (IPC) shall extend only until the later of the end of the initial five (5) Business Day Matching Period and 48 hours after the Notice Date in respect of the new Acquisition Proposal (IPC).

Termination of the IPC Arrangement Agreement

The IPC Arrangement Agreement may be terminated and the Arrangement may be abandoned at any time prior to the Effective Time (notwithstanding any approval of the IPC US Shareholders or Vasogen Shareholders):

· by the mutual written consent of IPC Opco and Vasogen.

· by either IPC Opco or Vasogen:

(i) if the Effective Time shall not have occurred on or before October 31, 2009, or such later date as may be agreed to in writing by the parties, provided that the terminating party is not the party whose failure to fulfill any of its obligations has been a principal cause of, or resulted in, the failure of the Effective Time to occur by such date;

(ii) if the Vasogen Meeting is held and the IPC Arrangement Resolution is not passed thereat (or at any adjournment or postponement thereof);

(iii) if the IPC US Meeting is held and the IPC US Merger Resolution is not passed thereat (or at any adjournment or postponement thereof); or

(iv) if any applicable law makes the consummation of the Arrangement or the transactions contemplated by the IPC Arrangement Agreement illegal or otherwise prohibited, and such law has become final and non-appealable.

· by Vasogen:

(i) if Vasogen publicly proposes to or does enter into a contract with respect to a Superior Proposal (IPC) in compliance with the provisions of the IPC Arrangement Agreement; or

(ii) if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of any IPC Company set forth in the IPC Arrangement Agreement, which breach or failure to perform (i) would cause certain conditions not to be satisfied and (ii) is incapable of being cured or, if curable, is not cured in accordance with the IPC Arrangement Agreement.

· by IPC Opco:

(i) if a Change of Recommendation (IPC) has occurred; or

(ii) if there has been a breach of or failure to perform any representation, warranty, covenant or agreement on the part of Vasogen set forth in the IPC Arrangement Agreement, which breach or failure to perform (i) would cause certain conditions not to be satisfied and (ii) is incapable of being cured or, if curable, is not cured in accordance with the IPC Arrangement Agreement.

Termination Payment

Under the terms of the IPC Arrangement Agreement, Vasogen has agreed that it will pay to the IPC Companies $500,000 if the IPC Arrangement Agreement is terminated either by IPC Opco if a Change of Recommendation (IPC) has occurred, or by Vasogen if Vasogen publicly proposes to or does enter into a contract with respect to a Superior Proposal (IPC) in accordance with the provisions of the IPC Arrangement Agreement.

Fess and Expenses

The IPC Arrangement Agreement provides that, except as otherwise provided therein, each party is responsible for the fees, costs and expenses incurred by such party in connection with the Arrangement.

Merger Agreement

In connection with the Arrangement, IPC Newco, IPC US Newco, New Vasogen and IPC US entered into the Merger Agreement. The Merger Agreement provides for the terms of the Merger of IPC US and IPC Newco US to be effected coincident with the Arrangement. Pursuant to the Merger, IPC Newco US will be merged with and into IPC US, and IPC US shall continue as the surviving corporation in the Merger under the name “IntelliPharmaCeutics Ltd.”. All of the property, rights, privileges, powers and franchises of IPC US and IPC Newco US shall vest in the surviving corporation and all debts, liabilities and duties of IPC US and IPC Newco US shall become the debts, liabilities and duties of the surviving corporation. For a complete copy of the Merger Agreement, please see Schedule D of the IPC Arrangement Agreement which is incorporated by reference into this Joint Circular.

Treatment of Vasogen Warrants, Vasogen Options, Vasogen DSUs and IPC US Options

Vasogen 2005 Warrants

Pursuant to the Plan of Arrangement, each Vasogen 2005 Warrant outstanding immediately prior to the Effective Time and not exercised shall, without any further action on behalf of each holder of such Vasogen 2005 Warrant, be transferred to Vasogen (free and clear of any Liens) and thereupon be cancelled in exchange for the payment by New Vasogen to each holder of such Vasogen 2005 Warrants of U.S.$0.021 multiplied by the number of Vasogen Shares to which such Vasogen 2005 Warrants relate.

Vasogen 2006-2007 Warrants

Pursuant to the Cervus Arrangement, each of the Vasogen 2006-7 Warrants outstanding immediately prior to the Effective Time and not exercised will become New Vasogen Warrants on the basis of one New Vasogen Warrant for each Vasogen 2006-7 Warrant held as of the Effective Time. All terms and conditions of such New Vasogen Warrants will be the same as the terms and conditions of the Vasogen 2006-7 Warrants mutatis mutandis. Warrant certificates previously evidencing such Vasogen Warrants shall thereafter evidence and be deemed to evidence such Vasogen 2006-7 Warrants outstanding in replacement therefor.

Pursuant to the IPC Arrangement, each New Vasogen Warrant will become such number of New IPC Warrants as is determined on the basis of an exchange ratio of 0.05 to 0.10. All terms and conditions of the New IPC Warrants will be the same as the terms and conditions of the New Vasogen Warrants mutatis mutandis.

Vasogen DSUs

Pursuant to the Plan of Arrangement, each of the Vasogen DSUs outstanding immediately prior to the Effective Time will be exercised and deemed to be exercised for such number of New Vasogen Shares on the basis as if they had been exercised for Vasogen Shares as is determined under the Vasogen DSUP as if the holders thereof had resigned as a director and/or officer, as applicable, immediately prior to the Effective Time and such New Vasogen Shares shall be issued to such former holders of Vasogen DSUs and any other rights issued under the Vasogen DSUP shall be, and shall be deemed to be, terminated and cancelled for no consideration.

Vasogen Options

Pursuant to the Cervus Arrangement, each outstanding Vasogen Option that has not been duly exercised prior to the Effective Time, whether or not vested, will initially be exchanged for New Vasogen Options on the basis of one New Vasogen Option for each Vasogen Option held immediately prior to the Effective Time. The exercise price per New Vasogen Share issuable upon exercise of each New Vasogen Option will be equal to the exercise price per Vasogen Share under the Vasogen Option.

Pursuant to the IPC Arrangement and upon approval of the New Option Plan Resolution, each outstanding New Vasogen Option, whether or not vested, will be exchanged for such number of New IPC Options for each Vasogen Option held on the basis of the Vasogen Exchange Ratio. The exercise price per New IPC Share issuable upon exercise of each New IPC Option will be equal to the quotient obtained by dividing the exercise price per New Vasogen Share of such New Vasogen Option by such exchange ratio, rounded up to the nearest cent.

IPC US Options

Pursuant to the Arrangement, each holder of outstanding IPC US Option, including, for greater certainty, options granted pursuant to the IPC Stock Option Plan and/or pursuant to any stock option agreement (including the performance based options granted to Drs. Isa and Amina Odidi and the broker compensation options to be granted in connection with the IPC Arrangement), that has not been duly exercised prior to the Effective Time, whether or not vested, will be exchanged for such number of New IPC Options for each IPC US Option held on the basis of the IPC Exchange Ratio and the exercise price per New IPC Share issuable upon exercise of each New IPC Option will be equal to the quotient obtained by dividing the exercise price per IPC US Common Share of such IPC US Option by such exchange ratio, rounded up to the nearest cent.

Interests of Certain Persons in the Arrangement and Merger

Vasogen Directors and Officers

Certain directors and officers of Vasogen have interests in the Arrangement that are different from the interests of Vasogen Shareholders generally. These interests include the following:

· as further discussed below under “IPC US Directors and Officers”, the Plan or Arrangement provides for the appointment of Dr. Eldon Smith as a director of New IPC;

· the potential appointment of Vasogen officers as officers of New IPC;

· pursuant to the IPC Arrangement Agreement, Vasogen will trigger run-off directors’ and officers’ liability insurance purchased by Vasogen for the benefit of the current and former directors and officers of Vasogen, all on the terms and subject to the conditions prescribed in the IPC Arrangement Agreement; and

· the Arrangement and the Merger may entitle certain officers of and a former consultant to Vasogen to certain compensation that may be received upon completion of the Arrangement in accordance with the terms of their consulting agreements.

IPC US Directors and Officers

Certain directors and senior officers of IPC US have interests in the Arrangement and Merger that are different from the interests of IPC US Shareholders generally. These interests include the following:

· each IPC US Option outstanding immediately prior to the Effective Time will be exchanged for options to acquire shares of New IPC. For further information on the treatment of IPC US Options following the completion of the Arrangement, see “The Arrangement and Merger — Treatment of Outstanding IPC US Options”;

· pursuant to the IPC Arrangement Agreement, Vasogen has agreed to implement certain governance arrangements which involve, among other things, the appointment of certain IPC US directors as directors of New IPC and the appointment of the IPC US and IPC Opco management team as the management of New IPC. For details as to the proposed arrangements, see “Information Concerning New IPC Following the Arrangement and Merger — Governance”; and

· if the transactions contemplated in the Cervus Agreements are completed as part of the Arrangement, up to $1,000,000 of the principal amount owing pursuant to the Shareholder Note may be repaid to Dr. Isa Odidi and Dr. Amina Odidi pursuant to the terms and conditions of the IPC Arrangement Agreement.

Shareholder and Other Regulatory Approvals for the Arrangement

Shareholder Approvals

Approval of the IPC Arrangement Resolution requires the affirmative vote of at least 662/3 % of the total votes cast by the Vasogen Shareholders present (in person or by proxy) and entitled to vote at the Vasogen Meeting. See “Voting Information and General Proxy Matters for Vasogen Shareholders — Quorum and Votes Required”.

Approval of the Cervus Arrangement Resolution requires the affirmative vote of at least 662/3% of the total votes cast by the Vasogen Shareholders present (in person or by proxy) and entitled to vote at the Vasogen Meeting. See “Voting Information and General Proxy Matters for Vasogen Shareholders — Quorum and Votes Required”.

Approval of the IPC US Merger Resolution requires the affirmative vote the holders of a majority of each class of IPC US Shares entitled to vote at the IPC US Meeting, voting as a separate class. See “Voting Information and General Proxy Matters for IPC Shareholders — Quorum and Votes Required”.

Court Approvals

The implementation of the Arrangement is subject to approval by the Court. Prior to mailing this Joint Circular, Vasogen obtained the Interim Order, a copy of which is attached as Appendix “G” hereto. Vasogen intends to apply for the Final Order once the IPC Arrangement Resolution, Cervus Arrangement Resolution and the IPC US Merger Resolution have been approved by the Vasogen Shareholders, the Cervus Shareholders and the IPC US Shareholders, respectively. At the hearing for the Final Order, the Court will consider, among other things, the fairness of the Plan of Arrangement and the approval of Vasogen Shareholders and IPC US Shareholders.

The Final Order will constitute the basis for an exemption from the registration requirements of the U.S. Securities Act with respect to the New IPC Shares and the New Vasogen Shares to be issued pursuant to the Arrangement. Prior to the hearing on the Final Order, the Court will be informed of this effect of the Final Order.

Other Regulatory Approvals

It is a condition to the closing of the IPC Arrangement that upon completion of the IPC Arrangement the New IPC Shares be (i) listed for trading on the TSX or the TSX Venture Exchange and (ii) listed for trading on NASDAQ or, if such NASDAQ listing cannot be maintained, application shall have been made to have the New IPC Shares quoted for trading on the OTCBB. As at the date of this Joint Circular applications have been made to list the New IPC Shares on the TSX and to list the New IPC Shares on NASDAQ. There can be no assurance that approvals will be obtained in respect of such listing and quotation. As of the date hereof, New IPC does not have conditional listing approval for any stock exchange or market and there can be no assurance that if such approvals are not obtained, that the parties will not waive such conditions, in whole or in part. See “Risk Factors”.

expects that any discussions with the NASDAQ regarding its plans for regaining compliance will be impacted by the proposed transactions described in this Joint Circular. There can be no assurance that the Panel will grant Vasogen’s request for continued listing of Vasogen Shares on the NASDAQ, whether the proposed transactions are consummated or not. Even if the Panel grants such a request for continued listing of Vasogen Shares on the NASDAQ, there can be no assurance that the New IPC Shares will be approved to be listed on NASDAQ.

If the Panel rules against Vasogen and Vasogen Shares cease to be listed for trading on the NASDAQ, Vasogen will seek to have quoted on the OTCBB, the Vasogen Shares, the New Vasogen Shares (in the case only the Cervus Arrangement consummated) or the New IPC Shares (in the case the IPC Arrangement and Merger are completed). There can be no assurance, however, that Vasogen Shares, the New Vasogen Shares (in case only Cervus Arrangement is consummated) or the New IPC Shares (in the case the IPC Arrangement and Merger are completed), whichever applicable, will be approved to be quoted on the OTCBB. See “Risk Factors”.

Resales of New IPC Shares

Canadian Securities Laws

The New IPC Shares to be issued pursuant to the Arrangement will be issued in reliance on exemptions from prospectus and registration requirements of applicable Canadian securities laws. In accordance with applicable securities legislation, these shares may be resold without restriction, subject to the conditions that New IPC is a reporting issuer at the time of such resale, no unusual effort is made to prepare the market or create a demand for the shares that are the subject of the resale and no extraordinary commission or consideration is paid in respect of the resale and to customary restrictions applicable to distributions of securities held by control persons and trades by insiders and officers of New IPC and other persons in a “special relationship” with New IPC.

If only the Cervus Arrangement is implemented then New Vasogen will become the listed issuer under the Arrangement, in which case, the New Vasogen Shares will be issued in reliance on exemptions from prospectus and registration requirements of applicable Canadian securities laws. In accordance with applicable securities legislation, these shares may be resold without restriction, subject to the conditions that New Vasogen is a reporting issuer at the time of such resale, no unusual effort is made to prepare the market or create a demand for the shares that are the subject of the resale and no extraordinary commission or consideration is paid in respect of the resale and to customary restrictions applicable to distributions of securities held by control persons and trades by insiders and officers of New Vasogen and other persons in a “special relationship” with New Vasogen.

The New IPC Shares to be issued to IntelliPharmaCeutics Inc., the privately-held company owned and controlled by Drs. Isa and Amina Odidi and their family trust and to be renamed “Odidi Holdings Inc.” in connection with the IPC Arrangement, are expected to be subject to escrow arrangements imposed by the stock exchange on which the New IPC Shares may be listed. In addition, since such shares will represent more than 20% of the issued and outstanding shares of New IPC following the Arrangement, such shares will be subject to control block resale restrictions imposed by applicable Canadian securities laws.

United States Securities Law

The following discussion is a general overview of certain requirements of U.S. federal securities laws that may be applicable to recipients of New IPC Shares in the United States. All U.S. persons are urged to consult with their own legal counsel to ensure that any subsequent resale of New IPC Shares issued to them under the Arrangement complies with applicable securities laws. The following discussion does not address the Canadian securities laws that will apply to the issue of the New IPC Shares or the resale of the same by U.S. persons within Canada. U.S. persons reselling such securities in Canada must comply with Canadian securities laws, as outlined above under “Resales of New IPC Shares — Canadian Securities Laws.”

The New IPC Shares to be issued in connection with the Arrangement have not been and will not be registered under the U.S. Securities Act and are being issued in reliance on the exemption from registration set forth in Section 3(a)(10) of the U.S. Securities Act. Section 3(a)(10) of the U.S. Securities Act exempts from registration the distribution of a security that is issued in exchange for outstanding securities where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange have the right to appear, by a court or by a governmental authority expressly authorized by law to grant such approval. Accordingly, the Final Order will, if granted, constitute a basis for the exemption from the registration requirements of the U.S. Securities Act with respect to the New IPC Shares issued in connection with the Arrangement.

Persons who are not “affiliates” of New IPC after the Arrangement and who were not “affiliates” of either Vasogen, IPC Opco, or IPC US prior to the Arrangement may resell the New IPC Shares that they receive in connection with the Arrangement without restriction under the U.S. Securities Act. New IPC Shares received by a holder who will be an “affiliate” of New IPC after the Arrangement or who were “affiliates” of either Vasogen, IPC Opco, or IPC US prior to the Arrangement will be subject to certain restrictions on resale of New IPC Shares imposed by the U.S. Securities Act. As defined in Rule 144 under the U.S. Securities Act, an “affiliate” of an issuer is a person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the issuer and may include certain officers and directors of such issuer as well as principal shareholders of such issuer. Persons who are “affiliates” of New IPC after the Arrangement or who were “affiliates” of either Vasogen, IPC Opco, or IPC US prior to the Arrangement may not sell their New IPC Shares that they receive in connection with the Arrangement in the United States in the absence of registration under the U.S. Securities Act, unless an exemption from registration is available, such as the exemptions contained in Rule 144 or Rule 904 of regulation S under the U.S. Securities Act.

Affiliates — Resales Under Rule 144

In general, under Rule 144, persons who are “affiliates” of New IPC after the Arrangement or who were “affiliates” of either Vasogen, IPC Opco, or IPC US prior to the Arrangement will be entitled to sell in the United States, during any three-month period, the New IPC Shares that they receive in connection with the Arrangement, provided that the number of such securities sold does not exceed the greater of one percent of the then outstanding securities of such class or, if such securities are listed on a United States securities exchange and/or reported through the automated questions system of a U.S. registered securities association, the average weekly trading volume of such securities during the four calendar week period preceding the date of sale, subject to specified restrictions on manner of sale, requirements, aggregation rules and the availability of current public information about New IPC. Persons who are “affiliates” of New IPC after the Arrangement will continue to be subject to the resale restrictions described in this paragraph for so long as they continue to be “affiliates” of New IPC.

Affiliates — Resales Under Regulation S

In general, under Regulation S, persons who are “affiliates” of New IPC solely by virtue of their status as an officer or director of New IPC or who were “affiliates” of either Vasogen, IPC Opco, or IPC US prior to the Arrangement may sell their New IPC Shares outside the United States in an “offshore transaction” (which would include a sale through the TSX, if applicable) if neither the seller, an “affiliate” nor any person acting on its behalf engages in “directed selling efforts” in the United States. In the case of a sale of New IPC Shares by such holders, there is an additional requirement that no selling commission, fee or other remuneration is paid in connection with such sale other than the usual and customary broker’s commission that would be received by a person executing such transaction as agent. For purposes of Regulation S, “directed selling efforts” means “any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered”. Certain additional restrictions, set forth in Rule 903 of Regulation S, are applicable to a holder of New IPC Shares who is an “affiliate” of New IPC after the Arrangement other than by virtue of his or her status as an officer or director of New IPC.

In connection with any sale or other transfer of direct or indirect beneficial interest in securities of New IPC into or within the United States, shareholders should consult with U.S. securities law counsel regarding such sales or transfers.

PROCEDURES FOR EXCHANGE BY IPC US SHAREHOLDERS

New IPC will deposit with the Depositary certificates representing the number of shares of New IPC required to be issued to the IPC US Shareholders in connection with the IPC Arrangement and Merger. As soon as practicable following the later of the Effective Date and the date of deposit, upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding IPC US Shares together with the Letter of Transmittal enclosed with this Joint Circular and which has been completed and signed in the manner required thereby in respect of such certificate and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate will be entitled to receive in exchange therefor, and the Depositary will deliver to such holder, a certificate representing that number of shares of New IPC that such holder has the right to receive pursuant to the IPC Arrangement Agreement and the surrendered certificate will be cancelled. If IPC US Shares are registered in the name of a broker, bank or other nominee, the registered holder of the shares must submit the letter of transmittal on behalf of the beneficial owner. If the Arrangement is not effected, all certificates representing IPC US Shares transmitted with a related Letter of Transmittal will be returned by certified mail to IPC US Shareholders.

In the event of a transfer of ownership of IPC US Shares that is not registered in the transfer records of IPC US, a certificate representing the proper number of shares of New IPC may be issued to the transferee if the certificate representing such IPC US Shares is presented to the Depositary, accompanied by all documents required to evidence and effect such transfer.

Until surrendered, each certificate which immediately prior to the Effective Time represented IPC US Shares will be deemed, at any time after the Effective Time, to represent only the right to receive upon such surrender the certificate representing shares of New IPC that the holder thereof has the right to receive in respect of the certificate pursuant to the IPC Arrangement Agreement.

No fractional shares of New IPC will be issued to IPC US Shareholders upon the surrender of IPC US Shares for exchange. As a result, the number of shares of New IPC each IPC US shareholder will receive will be rounded to the nearest whole number, with fractions of 0.50 rounded down.

Any use of the mail to transmit a certificate for IPC US Shares and a related Letter of Transmittal is at the risk of the IPC US shareholder. If these documents are mailed, it is recommended that registered mail, with return receipt requested, properly insured, be used.

If any certificate that immediately prior to the Effective Time represented outstanding IPC US Shares has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, a certificate representing shares of New IPC deliverable in respect thereof in accordance with such holder’s Letter of Transmittal. When authorizing such delivery in exchange for any lost, stolen or destroyed certificate, the person to whom a certificate representing shares of New IPC is to be issued must, as a condition precedent to the issuance thereof, give a bond satisfactory to New IPC and the Depositary (acting reasonably) in such amount as New IPC may direct or otherwise indemnify New IPC and the Depositary in a manner satisfactory to New IPC against any claim that may be made against New IPC with respect to the certificate alleged to have been lost, stolen or destroyed.

Except as otherwise provided in the instructions to the Letter of Transmittal relating to the IPC US Shares, the signature on the Letter of Transmittal must be guaranteed by an Eligible Institution. If a Letter of Transmittal is executed by a person other than the registered holder of the certificate(s) deposited therewith, the certificate(s) must be endorsed or be accompanied by an appropriate securities transfer power of attorney duly and properly completed by the registered holder, with the signature on the endorsement panel, or securities transfer power of attorney guaranteed by an Eligible Institution.

The IPC US Shares deposited with the Depositary will be deemed to be accepted only if the Depositary has actually received these documents.

All questions as to validity, form, eligibility (including timely receipt) and acceptance of any IPC US Shares deposited pursuant to the Plan of Arrangement will be determined by IPC US or New IPC, as applicable, in its sole discretion. Depositing holders of IPC US Shares agree that such determination shall be final and binding. IPC US and New IPC reserve the absolute right to reject any and all deposits which IPC US or New IPC, as applicable determines not to be in proper form or which may be unlawful for it to accept under the laws of any jurisdiction. IPC US and New IPC reserve the absolute right to waive any defect or irregularity in the deposit of any deposited IPC US Shares. There shall be no duty or obligation on IPC US, New IPC, the Depositary, or any other person to give notice of any defect or irregularity in any deposit of Shares and no liability shall be incurred by any of them for failure to give such notice. IPC US’ or New IPC’s, as applicable, interpretation of the terms and conditions of the Plan of Arrangement (including the Joint Circular and the Letter of Transmittal accompanying the IPC US Shares) shall be final and binding.

The Depositary will act as the agent of persons who have deposited IPC US Shares with respect to the Plan of Arrangement for the purpose transmitting New IPC Shares to such persons.

Settlement with persons who deposit IPC US Shares will be effected by the Depositary forwarding a certificate representing New IPC Shares to be issued by first class insured mail, postage prepaid.

Unless otherwise directed in the Letter of Transmittal, the certificate representing any New IPC Shares to be issued in consideration will be issued in the name of the registered holder of IPC US Shares so deposited. Unless the person who deposits IPC Shares instructs the Depositary to hold the to be New IPC Share certificate for pick-up by checking the appropriate box in the Letter of Transmittal. New IPC Share certificates will be forwarded by first class insured mail to the addresses supplied in the Letter of Transmittal. If no address is provided, any certificates will be forwarded to the address of the person as shown on the applicable register of IPC US.

No former holder of IPC US Shares shall be entitled to receive any consideration with respect to such IPC US Shares other than the consideration to which such holder is entitled to receive pursuant to the Arrangement and, for greater certainty, no such holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith, other than any declared but unpaid dividends.

New IPC and the Depositary are entitled to deduct and withhold from any amount payable to any holder of IPC US Shares or shares of New IPC such amounts as New IPC determines, acting reasonably, are required or permitted to deduct and withhold with respect to such payment under the Tax Act, the United States Internal Revenue Code of 1986 or any provision of any other applicable law. To the extent that amounts are so withheld, such withheld amounts will be treated for all purposes hereof as having been paid to the holder of the shares in respect of which such withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

IPC US and New IPC reserve the right to permit the deposited IPC US Shares to be accepted in a manner other than that set out above.

PROCEDURES FOR EXCHANGE BY VASOGEN SHAREHOLDERS

New IPC will deposit with the Depositary certificates representing the number of shares of New IPC required to be issued to the Vasogen Shareholders in connection with the Arrangement. If only the Cervus Arrangement is completed, New Vasogen will deposit with the Depositary certificates representing the number of shares of New Vasogen required to be issued to the Vasogen Shareholders in connection with the Cervus Arrangement.

As soon as practicable following the later of the Effective Date and the date of deposit, upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented outstanding Vasogen Shares together with the Letter of Transmittal enclosed with this Joint Circular and which has been completed and signed in the manner required thereby in respect of such certificate and such additional documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate will be entitled to receive in exchange therefor, and the Depositary will deliver to such holder, a certificate representing that number of shares of New IPC or New Vasogen, as applicable, that such holder has the right to receive pursuant to the Plan of Arrangement and the surrendered certificate will be cancelled. If Vasogen Shares are registered in the name of a broker, bank or other nominee, the registered holder of the shares must submit the letter of transmittal on behalf of the beneficial owner.

If the IPC Arrangement and the Cervus Arrangement are not effected, all certificates representing Vasogen Shares transmitted with a related Letter of Transmittal will be returned by certified mail to Vasogen Shareholders.

In the event of a transfer of ownership of Vasogen Shares that is not registered in the transfer records of Vasogen, a certificate representing the proper number of shares of New IPC or New Vasogen, as applicable, may be issued to the transferee if the certificate representing such Vasogen Shares is presented to the Depositary, accompanied by all documents required to evidence and effect such transfer.

Until surrendered, each certificate which immediately prior to the Effective Time represented Vasogen Shares will be deemed, at any time after the Effective Time, to represent only the right to receive upon such surrender the certificate representing shares of New IPC or New Vasogen, as applicable, that the holder thereof has the right to receive in respect of the certificate pursuant to the Plan of Arrangement.

No fractional shares of New IPC or New Vasogen, as applicable, will be issued to Vasogen Shareholders upon the surrender of Vasogen Shares for exchange. As a result, the number of shares of New IPC or New Vasogen, as applicable, each Vasogen Shareholder will receive will be rounded to the nearest whole number, with fractions of 0.50 rounded down.

Any use of the mail to transmit a certificate for Vasogen Shares and a related Letter of Transmittal is at the risk of the Vasogen Shareholder. If these documents are mailed, it is recommended that registered mail, with return receipt requested, properly insured, be used.

If any certificate that immediately prior to the Effective Time represented outstanding Vasogen Shares has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, a certificate representing shares of New IPC deliverable in respect thereof in accordance with such holder’s Letter of Transmittal. When authorizing such delivery in exchange for any lost, stolen or destroyed certificate, the person to whom a certificate representing shares of New IPC or New Vasogen, as applicable, is to be issued must, as a condition precedent to the issuance thereof, give a bond satisfactory to New IPC or New Vasogen, as applicable, and the Depositary (acting reasonably) in such amount as New IPC may direct or otherwise indemnify the Depositary, New IPC or New Vasogen, as applicable, in a manner satisfactory to New IPC or New Vasogen, as applicable against any claim that may be made against New IPC or New Vasogen, as applicable with respect to the certificate alleged to have been lost, stolen or destroyed.

No former holder of Vasogen Shares shall be entitled to receive any consideration with respect to such Vasogen Shares other than the consideration to which such holder is entitled to receive pursuant to the Arrangement and, for greater certainty, no such holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith, other than any declared but unpaid dividends.

New IPC or New Vasogen, as applicable and the Depositary are entitled to deduct and withhold from any amount payable to any holder of Vasogen Shares or shares of New IPC or New Vasogen, as applicable such amounts as New IPC or New Vasogen, as applicable, determines, acting reasonably, are required or permitted to deduct and withhold with respect to such payment under the Tax Act, the United States Internal Revenue Code of 1986 or any provision of any other applicable law. To the extent that amounts are so withheld, such withheld amounts will be treated for all purposes hereof as having been paid to the holder of the shares in respect of which such withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

Except as otherwise provided in the instructions to the Letter of Transmittal relating to the Vasogen Shares, the signature on the Letter of Transmittal must be guaranteed by an Eligible Institution. If a Letter of Transmittal is executed by a person other than the registered holder of the certificate(s) deposited therewith, the certificate(s) must be endorsed or be accompanied by an appropriate securities transfer power of attorney duly and properly completed by the registered holder, with the signature on the endorsement panel, or securities transfer power of attorney guaranteed by an Eligible Institution.

The Vasogen Shares deposited with the Depositary will be deemed to be accepted only if the Depositary has actually received these documents.

All questions as to validity, form, eligibility (including timely receipt) and acceptance of any Vasogen Shares deposited pursuant to the Plan of Arrangement will be determined by Vasogen, New Vasogen or New IPC, as applicable, in its sole discretion. Depositing holders of Vasogen Shares agree that such determination shall be final and binding. Vasogen, New Vasogen and New IPC reserve the absolute right to reject any and all deposits which Vasogen, New Vasogen and New IPC, as applicable, determines not to be in proper form or which may be unlawful for it to accept under the laws of any jurisdiction. Vasogen, New Vasogen and New IPC reserve the absolute right to waive any defect or irregularity in the deposit of any deposited Vasogen Shares. There shall be no duty or obligation on Vasogen, New Vasogen and New IPC, the Depositary, or any other person to give notice of any defect or irregularity in any deposit of Shares and no liability shall be incurred by any of them for failure to give such notice. Vasogen’s, New Vasogen’s and New IPC’s, as applicable, interpretation of the terms and conditions of the Plan of Arrangement (including the Joint Circular and the Letter of Transmittal accompanying the Vasogen Shares) shall be final and binding.

The Depositary will act as the agent of persons who have deposited Vasogen Shares with respect to the Plan of Arrangement for the purpose transmitting New Vasogen Shares or New IPC Shares, as applicable, to such persons.

Settlement with persons who deposit Vasogen Shares will be effected by the Depositary forwarding a certificate representing New Vasogen Shares or New IPC Shares, as applicable, to be issued by first class insured mail, postage prepaid.

Unless otherwise directed in the Letter of Transmittal, the certificate representing any New Vasogen Shares or New IPC Shares, as applicable, to be issued in consideration will be issued in the name of the registered holder of Vasogen Shares so deposited. Unless the person who deposits Vasogen Shares instructs the Depositary to hold the to be New Vasogen Share certificate or New IPC Share certificate as applicable, for pick-up by checking the appropriate box in the Letter of Transmittal. New Vasogen Share certificates or New IPC Share certificates, as applicable, will be forwarded by first class insured mail to the addresses supplied in the Letter of Transmittal. If no address is provided, any certificates will be forwarded to the address of the person as shown on the applicable register of Vasogen.

Vasogen and New Vasogen or New IPC, as applicable, reserve the right to permit the deposited New Vasogen Shares or New IPC Shares, as applicable, to be accepted in a manner other than set out above.

APPROVAL OF THE NEW OPTION PLAN

At the Vasogen Meeting, Vasogen Shareholders will be asked to approve the New Option Plan Resolution. The New Option Plan is being established for the benefit of full-time and part-time employees, officers, directors and consultants of New IPC and its affiliates. The purpose of the New Option Plan is to attract, retain and motivate directors, officers, employees and consultants by providing them with the opportunity, through the exercise of share options, to acquire a proprietary interest in New IPC. As a result of to the Arrangement, holders of Vasogen Options and holders of IPC US Options will receive New IPC Options in exchange for their Vasogen Options and IPC US Options, respectively, on an economically equivalent basis.

In the event only the Cervus Arrangement is completed than the New Option Plan will be adopted by New Vasogen as the New Vasogen Option Plan on the same terms as the New Option Plan other than the change of name of the plan, the applicable corporation issues, and other applicable conforming changes. Further in the event only the Cervus Arrangement is completed the approval of the New Option Plan Resolution will be read as approval of the New Vasogen Option Plan rather than approval of the New Option Plan.

Summary of the New Option Plan

Subject to the requirements of the New Option Plan, the board of directors of New IPC will have the authority to select those directors, officers, employees and consultants to whom New IPC Options will be granted, the number of New IPC Options to be granted to each person and the price at which New IPC Shares may be purchased.

The key features of the New Option Plan are as follows:

· The eligible participants will be full-time and part-time employees, officers and directors of, or consultants to, New IPC or its affiliates, which may be designated from time to time by the directors of New IPC.

· The fixed maximum percentage of New IPC Shares issuable under the New Option Plan will be 10% of the issued and outstanding New IPC Shares from time to time. The New Option Plan will automatically “reload” after the exercise of a New IPC Option provided that the number of New IPC Shares issuable under the New Option Plan does not then exceed the maximum percentage of 10%.

· There will be no restrictions on the maximum number of New IPC Options which may be granted to insiders of New IPC.

· The directors of New IPC will determine the exercise price of each New IPC Option at the time the New IPC Option is granted, provided that such price is not lower than the “market price” of the New IPC Shares at the time the New IPC Option is granted. “Market price” means the volume weighted average trading price of the New IPC Shares on the TSX, or another stock exchange where the majority of the trading volume and value of the New IPC Shares occurs, for the five trading days immediately preceding the relevant date, calculated in accordance with the rules of such stock exchange.

· Unless otherwise determined by the board of directors of New IPC, each New IPC Option will become exercisable as to 331/3% on a cumulative basis, at the end of each of the first, second and third years following the date of grant.

· The period of time during which a particular New IPC Option may be exercised will be determined by the board of directors of New IPC, subject to any Employment Contract or Consulting Contract (both as hereinafter defined), provided that no such option term shall exceed 10 years.

· If New IPC Option expiration date falls within a “black-out period” (a period during which certain persons cannot trade New IPC Shares pursuant to a policy of New IPC respecting restrictions on trading), or immediately following a black-out period, the expiration date will be automatically extended to the date which is the tenth business day after the end of the black-out period.

· New IPC Options may terminate prior to expiry of the option term in the following circumstances:

· on death of an optionee, New IPC Options vested as at the date of death will be immediately exercisable until the earlier of 180 days from such date and expiry of the option term; and

· if an optionee ceases to be a director, officer, employee and consultant of New IPC for any reason other than death, including receipt of notice from New IPC of the termination of his, her or its Employment Contract or Consulting Contract (as defined below), New IPC Options vested as at the date termination will be exercisable until the earlier of 120 days following such date and expiry of the option term,

subject however to any contract between New IPC and any employee relating to, or entered into in connection with, the employment of the employee or between New IPC and any director with respect to his or her directorship or resignation therefrom (an “Employment Contract”), any contract between New IPC and any consultant relating to, or entered into in connection with, services to be provided to New IPC (a “Consulting Contract”) or any other agreement to which New IPC is a party with respect to the rights of such person upon termination or change in control of New IPC.

· New IPC Options and rights related thereto held by an optionee will not be assignable or transferable except on the death of the optionee.

· If there is a take-over bid (within the meaning of the Securities Act (Ontario)) made for all or any of the issued and outstanding New IPC Shares, then all New IPC Options outstanding will become immediately exercisable in order to permit New IPC Shares issuable under such New IPC Options to be tendered to such bid.

· If there is a consolidation, merger, amalgamation or statutory arrangement involving New IPC, separation of the business into two or more entities or sale of all or substantially all of the assets of New IPC to another entity, the optionees will receive, on exercise of their New IPC Options, the consideration they would have received had they exercised their New IPC Options immediately prior to such event. In such event and in the event of a securities exchange take-over bid, the board of directors of New IPC may, in certain circumstances, require optionees to surrender their New IPC Options if replacement options are provided. In the context of a cash take-over bid for 100% of the issued and outstanding New IPC Shares, optionees may elect to conditionally surrender their New IPC Options or, if provided for in an agreement with the offeror, automatically exchange their New IPC Options for options of the offeror.

· The board of directors of New IPC may from time to time in its absolute discretion amend, modify and change the provisions of the New Option Plan or any New IPC Options granted pursuant to the New Option Plan, provided that any amendment, modification or change to the provisions of the New Option Plan or any New IPC Options granted pursuant to the New Option Plan shall:

· not adversely alter or impair any New IPC Option previously granted;

· be subject to any regulatory approvals, where required, including, where applicable, the approval of the TSX and/or such other exchange as may be required; and

· not be subject to shareholder approval in any circumstances, except where the amendment, modification or change to the New Option Plan or New IPC Option would:

· reduce the exercise price of a New IPC Option held by an insider of New IPC;

· extend the term of a new IPC Option held by an insider beyond the original expiration date (subject to such date being extended in a black-out extension situation);

· increase the fixed maximum percentage of New IPC Shares issuable under the New Option Plan; or

· amend the amendment provision of the New Option Plan;

in which case the amendment, modification or change will be subject to shareholder approval in accordance with the rules of the TSX and/or such other exchange as may be required. Amendments to the New Option Plan not requiring shareholder approval may for example include, without limitation:

· amendments of a “housekeeping nature”, including any amendment to the New Option Plan or a New IPC Option that is necessary to comply with applicable law or the requirements of any regulatory authority or stock exchange;

· changes to the exercise of a New IPC Option to an exercise price not below the “market price” unless the change is a reduction in the exercise price of a New IPC Option held by an insider of New IPC;

· amendments altering, extending or accelerating any vesting terms or conditions in the New Option Plan or any New IPC Options;

· changes amending or modifying any mechanics for exercising a New IPC Option;

· amendments changing the expiration date (including acceleration thereof) or changing any termination provision in any New IPC Option, provided that such change does not entail an extension beyond the original expiration date of such New IPC Option (subject to such date being extended in a black-out extension situation);

· amendments introducing a cashless exercise feature, payable in securities, whether or not such feature provides for a full deduction of the number of underlying securities from the New Option Plan maximum;

· amendments changing the application of the provisions of the New Option Plan dealing with adjustments in the number of shares, consolidations and mergers and take-over bids;

· amendments adding a form of financial assistance or amending a financial assistance provision which is adopted;

· amendments changing the eligible participants of the New Option Plan; and

· amendments adding a deferred or restricted share unit provision or any other provision which results in participants receiving securities while no cash consideration is received by New IPC.

· The board of directors of New IPC may discontinue the New Option Plan at any time without consent of the participants under the New Option Plan provided that such discontinuance shall not adversely alter or impair any New IPC Option previously granted.

The foregoing description of the New Option Plan is qualified in its entirety by reference to the full text thereof, which is attached as Appendix “P” to this Joint Circular. This document should be read carefully in its entirety.

Upon completion of the Arrangement and Merger, implementation of the New Option Plan and the exchange of Vasogen Options and IPC US Options for New IPC Options, assuming a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 0.559061, a total of 1,103,083 New IPC Shares will be reserved for issuance under the New Option Plan and a total of 93,058 New IPC Options will be issued to directors, officers, employees and consultants of New IPC. Of such New IPC Options, 78,241 will have vested. On the Effective Date, a total of 93,058 New IPC Shares will be reserved for issuance pursuant to New IPC Options outstanding, being approximately 0.8% of the issued and outstanding New IPC Shares and approximately 8.4% of the total New IPC Shares reserved for issuance under the New Option Plan, and 1,010,025 New IPC Shares will remain available for issuance upon the exercise of New IPC Options which may be granted under the New Option Plan (being approximately 9.2% of the issued and outstanding New IPC Shares and approximately 91.6% of the total New IPC Shares reserved for issuance under the New Option Plan).

The foregoing summary does not include options to purchase New IPC Shares that are to be issued (outside the terms of the New Option Plan) to certain IPC US executive officers and as compensation to a broker to IPC US (see “Certain Information Concerning the Parties — Prior Sales”). Assuming completion of the Cervus Arrangements, a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 0.559061, there will be 2,795,305 New IPC Options issued to Drs. Isa and Amina Odidi in exchange for their 5,000,000 performance based options in IPC US and 78,932 New IPC Options issued in exchange for the broker compensation options issued by IPC US in connection with the IPC Arrangement.

If only the Cervus Arrangement is completed then upon implementation of the New Vasogen Option Plan and the exchange of Vasogen Options for New Vasogen Options and assuming a Vasogen Exchange Ratio of 0.25 a total of 579,119 New Vasogen Options will be reserved for issuance under the New Vasogen Option Plan and a total of 274,347 New Vasogen Options will be issued of which 218,952 will be vested.

Approval of the New Option Plan Resolution requires the affirmative vote of a majority of the total votes cast by Vasogen Shareholders present (in person or by proxy), excluding the votes of insiders entitled to receive a benefit under the New Option Plan, and entitled to vote at the Vasogen Meeting. THE VASOGEN BOARD UNANIMOUSLY RECOMMENDS THAT VASOGEN SHAREHOLDERS VOTE “FOR” THE NEW IPC OPTION PLAN RESOLUTION.

CERTAIN INFORMATION CONCERNING THE PARTIES

Information Concerning Vasogen

Corporate Information

Vasogen was incorporated under the Business Corporations Act (Ontario) and was continued under the Canada Business Corporations Act by certificate and articles of continuance dated August 9, 1999. Vasogen has four wholly-owned subsidiaries, Vasogen US incorporated under the laws of Delaware, U.S.A., Vasogen Ireland Limited, incorporated under the laws of the Republic of Ireland, New Vasogen incorporated under the laws of Canada and Vasogen Subco incorporated under the laws of Canada. Vasogen Ireland Limited owns certain intellectual property related to Vasogen’s products and technologies. Both New Vasogen and Vasogen Subco were incorporated on August 27, 2009 for the purposes of the Arrangement. The audited balance sheets of New Vasogen and Vasogen Subco, each dated August 27, 2009, are attached as Appendix “L” and Appendix “M”, respectively, to this Joint Circular.

Vasogen’s registered principal office is located at 66 Wellington Street West, Suite 5300, Toronto Dominion Bank Tower, Toronto, Ontario, Canada M5K 1E6. Vasogen is currently a “reporting issuer” in all of the provinces and territories of Canada. Vasogen is currently listed on the TSX and currently quoted for trading on the NASDAQ. Vasogen’s telephone number is (905) 402-9925 and its facsimile number is (905) 847-6270. Vasogen’s website is www.vasogen.com. Any information contained on Vasogen’s website is not, and will be deemed not to be, incorporated herein by reference.

Business Overview

Vasogen is a biotechnology company that historically focused on the research and commercial development of therapies designed to target the destructive inflammatory process associated with the development and progression of cardiovascular and neurodegenerative disorders. One of its products, Celacade™, was designed to activate the immune response to apoptosis - an important physiological process that regulates inflammation. Historically, Vasogen also focused on developing its VP series of drugs for the treatment of certain neuro-inflammatory disorders.

Over the past three fiscal years, Vasogen raised approximately $36.8 million in net proceeds from the issuance of debt and equity securities to investors. Vasogen’s common shares are currently listed on the TSX under the symbol “VAS” and are currently listed for trading on NASDAQ under the symbol “VSGN”.

During 2008, Vasogen implemented a restructuring plan to significantly reduce the rate at which it uses cash and to focus its efforts on opportunities that the Vasogen Board and management believe are most likely to provide shareholder value. As a result, Vasogen discontinued maintaining the necessary quality processes and personnel to support European commercialization and any clinical development of its Celacade™ technology, materially reduced expenses associated with the VP series of drugs, and reduced the number of full-time employees from 104 to six. Vasogen also retained JMP to assist in exploring potential strategic alternatives. To further reduce the rate at which Vasogen’s uses its cash during its strategic review process, in February 2009, Vasogen further reduced its number of full-time employees to two. As part of this restructuring, Vasogen terminated its employment agreement with Christopher J. Waddick, Vasogen’s President and Chief Executive Officer, which resulted in a termination payment being made in 2009 to Mr. Waddick in the amount of $1.0 million. Vasogen subsequently entered into a consulting agreement to retain the services of Mr. Waddick as President and Chief Executive Officer at a significantly reduced compensation. To further reduce the rate at which Vasogen uses its cash, the employment of Graham Neil, Vasogen’s Vice-President, Finance and Chief Financial Officer, was terminated effective July 14, 2009 which resulted in a termination payment being made in 2009 to Mr. Neil in the amount of $0.2 million. Vasogen subsequently entered into a consulting agreement to retain the services of Mr. Neil as Vice-President, Finance and Chief Financial Officer at a significantly reduced compensation. As a result of this termination the number of full-time employees has been reduced to one.

In the past, Vasogen filed patent applications to protect its products and processes. Historically, Vasogen’s policy was to file patent applications to protect inventions, technology, and improvements that were important to the development of its business and with respect to the application of its technologies to the treatment of a number of disease indications. Vasogen owns patents and patent applications relating to its products and technologies in the United States, Canada, and other jurisdictions around the world. As part of its restructuring plan, Vasogen has implemented certain processes with respect to its intellectual property (“IP”) portfolio resulting in the abandonment of various patents and patent applications. Decisions to abandon certain patents and patent applications were based on a qualitative assessments of numerous factors including, but not limited to, Vasogen’s cash resources, development timelines, evolving development plans for its products, evolving importance placed on jurisdictions of lesser economic value, whether the IP was core to a current product or originally filed to protect potential future or alternative versions of a current product, and the life of a patent relative to the potential timeframe for commercialization. As such, there are a number of patents and patent applications that have been abandoned and an additional number that are expected to be abandoned in the foreseeable future.

Vasogen’s authorized share capital consists of an unlimited number of Vasogen Shares all without nominal or par value and no other classes of shares.

Each Vasogen Share entitles the holder thereof to one vote at any meeting of Vasogen Shareholders, except meetings at which only holders of a specified class of shares are entitled to vote. Vasogen Shares are entitled to receive, as and when declared by the Vasogen Board, dividends in such amounts as shall be determined by the Vasogen Board. The holders of Vasogen Shares have the right to receive the remaining property of Vasogen in the event of liquidation, dissolution, or winding-up of Vasogen, whether voluntary or involuntary. All Vasogen Shares now outstanding and to be outstanding upon exercise of the outstanding options and warrants are, or will be, fully paid and non-assessable.

As of the close of business on September 14, 2009, there were 22,623,195 Vasogen Shares issued and outstanding. In addition, as of the close of business on September 14, 2009, there were also outstanding:

· options to acquire an aggregate of 948,991 Vasogen Shares granted under Vasogen’s stock option plan with a weighted average exercise price of $8.88;

· common share purchase warrants to purchase up to 7,094,973 Vasogen Shares with a current weighted average exercise price of U.S.$4.54 per share; and

· 516,575 common shares issuable upon exercise of outstanding deferred share units granted under Vasogen’s Directors’ Deferred Share Unit and Stock Plan.

Dividend Policy

Vasogen has not paid, and has no current plans to pay, dividends on the Vasogen Shares.

Previous Purchases and Sales of Securities

No Vasogen Shares were issued by Vasogen or purchased by Vasogen during the 12 months preceding the date of this Joint Circular, except as follows:

Date of Issue	Purchaser	Type of Issuance	Vasogen Shares Issued
10/1/2008	Benoit La Salle	DSU conversion	16,571
10/3/2008	Dr. Ronald Cresswell	DSU conversion	16,762
1/19/2009	Tom Clarke	DSU conversion	95,019
5/7/2009	Terry Gregg	DSU conversion	103,458

Trading Price and Volume

Vasogen Shares currently trade on the TSX under the symbol “VAS” and are currently quoted for trading on the NASDAQ under the symbol “VSGN”. The table below sets forth, for the periods indicated, the high and low daily sales prices for Vasogen Shares as reported in published financial sources. These quotations reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily reflect actual transactions.

	TSX			NASDAQ
Period	High ($)	Low ($)	Volume (Shares)	High (U.S.$)	Low (U.S.$)	Volume (Shares)
2008
June	0.48	0.27	274992	0.49	0.27	1628511
July	0.40	0.25	325323	0.36	0.26	1130977
August	0.42	0.25	253492	0.39	0.28	652156
September	0.38	0.185	257642	0.37	0.18	1265709
October	0.22	0.15	253430	0.22	0.11	894563
November	0.23	0.09	243914	0.16	0.05	895561
December	0.20	0.05	438601	0.18	0.06	1291874

2009
January	0.33	0.14	632945	0.25	0.08	1258289
February	0.27	0.14	399606	0.24	0.11	864753
March	0.19	0.12	279811	0.16	0.10	627937
April	0.215	0.16	118946	0.18	0.12	750398
May	0.40	0.20	517090	0.35	0.17	2263980
June	0.42	0.225	704620	0.37	0.19	4436366
July	0.25	0.175	181777	0.23	0.16	874259
August	0.45	0.20	1277679	0.42	0.17	8206816
September 1 – 16	0.32	0.255	121899	0.30	0.25	988182

On August 14, 2009, the last trading day before the announcement of the entering into of the IPC Arrangement Agreement and the Cervus Arrangement Agreement, the Vasogen Shares closed at $0.22 on the TSX and at U.S.$0.2108 on the NASDAQ.

Selected Financial Data

For certain historical financial information of Vasogen, see the audited and unaudited financial statements of Vasogen, including the notes thereto, and the associated interim Management’s Discussion and Analysis of Financial Condition and Results of Operations, all of which are incorporated herein by reference.

Directors and Executive Officers

There are currently five directors on the Vasogen Board. Executive officers of Vasogen are appointed annually by the Vasogen Board and serve until their successors are duly appointed and qualified. Further information as to Vasogen’s directors and executive officers is contained in the documents incorporated by reference herein. Following the completion of the Arrangement, certain governance changes will be instituted pursuant to the terms of the IPC Arrangement Agreement. See “Information Concerning New IPC Following The Arrangement and Merger — Governance”. In addition, certain senior officers and a former consultant of Vasogen are entitled to approximately $362,500 in bonuses and severance payments and the issuance of 150,000 Vasogen options on or about the time of closing.

Further Information

See “Documents Incorporated By Reference” for documents incorporated herein by reference for further historical information in respect of Vasogen.

Selected Financial Information for Vasogen Subco and New Vasogen

The audited balance sheet of each of New Vasogen and Vasogen Subco as at August 27, 2009, the date of incorporation in each case, are attached as Appendix “L” and Appendix “M” to this Joint Circular.

Information Concerning IPC US and IPC Opco

Corporate Information

IPC US was incorporated in New York on February 23, 1988 as a “blank check” corporation under the name “Ready Capital Corp.”. On September 10, 2004, Ready Capital Corp. changed its name to “IntelliPharmaCeutics Ltd.” and reincorporated in Delaware.

IPC Opco was formed on September 9, 2004 under the laws of the Province of Nova Scotia on the merger of IntelliPharmaCeutics Limited, a Nova Scotia company, with a wholly-owned subsidiary of Ready Capital Corp. On December 1, 2004, IPC Opco amended its authorized capital to provide that, notwithstanding the number of shares outstanding, the holders of IPC Opco Convertible Voting Shares shall be entitled to such number of votes as a class as is equal to 50% of all votes entitled to vote on any matter at a meeting of IPC Opco shareholders. On April 28, 2005, the authorized capital of IPC Opco was amended such that it now is comprised of 10,000,000,000 IPC Opco Common Shares, 10,850,000 IPC Opco Convertible Voting Shares and 10,850,000 IPC Opco Exchangeable Shares.

IPC US is presently a holding company that conducts no business and has no assets other than its holding of shares in IPC Opco.

The registered office and principal place of business of IPC US and IPC Opco is 30 Worcester Road, Toronto, Ontario, Canada M9W 5X2.

Organizational Chart

The following chart shows the corporate relationship structure of IPC US and IPC Opco, including jurisdictions of incorporation, prior to completion of the Arrangement and Merger.

(1) A privately-held company owned and controlled by Drs. Isa and Amina Adidi and their family trust, to be renamed “Odidi Holdings Inc.” in connection with the IPC Arrangement.

Business Overview

From 1999 through 2002, IntelliPharmaCeutics Inc., a predecessor company, engaged in the research, development, licensing, and marketing of both new and generic controlled-release pharmaceutical products. In 2002, IPC Opco purchased IntelliPharmaCeutics Inc.’s assets, including its technology rights.

Controlled-release means releasing a drug into the bloodstream or a target site in the body, over an extended period of time or at predetermined times. Controlled drug delivery can be both safer and more effective than conventional immediate-release tablets and capsules in administering drugs.

IPC Opco’s business focus has been to apply its proprietary controlled-release technologies to existing drugs. The release technologies, and the chemical compounds utilized in them, were designed and chosen to be compatible with, and to orally deliver, a wide range of small-molecule active pharmaceutical ingredients. At present, those technologies have been applied in the laboratory and/or in bioavailability/bioequivalence studies in humans to orally administered small molecule drugs including those used in the treatment of cardiovascular, central nervous system, gastro-intestinal, pain, diabetes and other significant indications.

IPC Opco applies its proprietary technology in two ways: (1) developing improved controlled-release (once-a-day) versions of existing immediate-release branded drugs (requiring new drug applications (“NDA”)), and (2) developing and commercializing generic drugs that are bioequivalent to existing controlled-release branded products (requiring abbreviated new drug applications (“ANDA”)). An ANDA must show that, when taken orally in bioequivalence studies conditions, levels of the active ingredient as measured in the bloodstream are the same for the generic product as for the branded product, within tolerances set by the FDA.

IPC Opco’s proposed products are expected to result from the niche market created by the expiration of drug product patents and drug product exclusivity periods, following which IPC Opco believes it will generally have the following two opportunities to license its technologies and products:

· for branded immediate-release (multiple-times-per-day) products, IPC Opco can seek to formulate improved replacement products, typically by developing a new, patentable, controlled-release (once-a-day) product. Such products may be licensed to and sold by the pharmaceutical company that made the original immediate-release product, thereby protecting the pharmaceutical company against revenue loss in the brand by providing a clinically attractive patented product that is expected to compete favourably with the generic immediate-release competition that arises on expiry of the original patent(s); and

· for existing controlled-release (once-a-day) products covered by patents about to expire or already expired, IPC Opco’s Company can seek to formulate generic products which are bioequivalent to the branded products. IPC Opco scientists have done so for over a half-dozen drug products previously, on a private contract basis with third-party companies that cannot be disclosed because of confidentiality obligations of IPC Opco’s scientists under their prior development agreements. Such products may be licensed to and sold by distributors of generic products.

IPC Opco’s scientists have developed drug delivery technology systems that facilitate controlled-release delivery of a wide range of pharmaceuticals. IPC Opco has branded these technology systems collectively as the Drug Delivery Engine(™). These systems include several core technologies, which enable IPC Opco to flexibly respond to varying drug attributes and patient requirements, producing a desired controlled-release effect. In the opinion of IPC Opco’s management, these systems offer superior performance to traditional drug delivery systems, while retaining simplicity and cost effectiveness associated with their manufacture for the reasons described below:

· IPC Opco’s delivery technologies offer competitive development times. The specific reasons for this are that they are proven to be versatile, in that they demonstrated themselves suited to the delivery of a wide range of small molecule drugs. They are robust, in that the predicted delivery results have been repeatedly substantiated by actual bioavailability/bioequivalence studies. They were developed by IPC Opco’s chief scientists, who have substantial experience in applying them successfully to the delivery of small drug molecules under existing development contracts and in support of IPC Opco’s own pipeline. For these reasons, IPC Opco believes that its development times are short and competitive when compared to its competitors.

· IPC Opco’s delivery technologies offer competitive development costs, because the technologies use only readily available, low-cost ingredients already acceptable to regulatory authorities such as the FDA, and because development times are short, IPC Opco believes that its development costs are low when compared to its competitors.

· Large pharmaceutical companies may license IPC Opco’s improved products for life-cycle management and franchise extension of their branded products as they come off patent. IPC Opco’s management believes that, with impending loss of branded product revenues, a new product such as IPC Opco’s, which offers the advantage of once-a-day dosing, should be attractive to a large pharmaceutical company facing revenue loss in a patented branded-product franchise. An industry example is the license of a once-a-day Wellbutrin XL formulation from Biovail Corporation to GSK Inc.

· Manufacturers and distributors of generic drugs may license IPC Opco’s technologies and products. Because IPC Opco’s development times are short and cost-effective, IPC Opco’s generic once-a-day products represent a cost-effective opportunity for generic distributors to add valuable generic products to their portfolios.

IPC Opco is currently focusing its efforts on the following areas:

· Obtaining regulatory approval for 15 products, including (i) 11 generic, controlled release pharmaceutical products (ANDAs), and (ii) four new controlled release pharmaceutical products (NDAs) which are a reformulation of an existing successful immediate release product. Of these 15 products, three are being pursued in conjunction with a development partner, (two ANDAs and one NDA) and 12 are being pursued by IPC Opco for its sole benefit. In May 2007, IPC Opco filed an ANDA with the FDA for a drug developed in collaboration with a partner and intended for the US market. In

August 2007, that application was accepted by the FDA as being complete and in condition for further review. The ANDA review process generally takes one year or longer, and there can be no assurance that the FDA will approve the product for commercial launch in the USA.

· Commercial exploitation of these products either by license and the collection of royalties, or through the manufacture of tablets and capsules using IPC Opco’s developed formulations.

· Development of new products and increasing the number of licensing agreements with other pharmaceutical companies beyond those seven already in place, including to collaborate in contract research and development, joint ventures and other drug development and commercialization projects.

IPC Opco intends to collaborate in the development of products with partners, when it believes that such collaboration may enhance the outcome of the project. IPC Opco also plans to seek additional collaborations as a means of developing additional products. IPC Opco believes that its business strategy enables it to reduce its risk by (a) having a diverse product portfolio that includes both branded and generic products in various therapeutic categories, and (b) building collaborations and establishing licensing agreements with companies with greater resources thereby allowing IPC Opco to share costs of development and to improve cash-flow. There can be no assurance that IPC Opco will be able to enter into additional collaborations or, if it does, that such arrangements will be beneficial.

IPC Opco has seven drug development agreements in place, six for the development of ANDA/ANDS products and one for an NDA product. Typical material terms are subject to negotiation and may include:

· identification and specification of a target drug product and a development timetable;

· a license to the client for the technology actually used in the delivery formulation;

· a payment at the time of execution;

· milestone payments for the successful accomplishment of key objectives, such as initiation of or successful bioavailability/bioequivalence or clinical studies, successful scale-up/manufacture to submission batch size, regulatory filing or approval;

· bonuses for being first or early to make a regulatory filing or obtain regulatory approval;

· royalties or share of profits from commercial sales; and

· technology reversion clauses which operate to return all rights in the delivery technologies to IPC Opco when projects or commercial sales are terminated.

Industry Technology

Oral controlled-release technology permits the development of specialized oral drug delivery systems that improve the absorption and utilization by the human body of a variety of pharmaceutical compounds. Several drug delivery systems are commonly used in the manufacturing of controlled-release oral drug products. However, three technologies stand out as truly tried and tested. These are the osmotic push-pull, or OROS(™), system (used by ALZA), the core or press-coated system (used by Bayer), and the sandwiched deposit platform, or Geomatrix(™), system (used by SkyePharma). These technologies are based on physically compartmentalized structures, and, IPC Opco believes, continue to be the yardstick by which other controlled-release drug delivery technology platforms are measured.

(a) OROS(™) Osmotic Push-Pull System

The OROS(™) osmotic system is a reservoir system which is comprised of two reservoirs, one containing drug active and suspending agent, and the other containing a gel layer which swells when exposed to water-based solutions such as stomach fluids. The two reservoirs are enclosed in a single tablet encased in an osmotic membrane, which permits water to enter but not to exit (osmosis). Once inside the gastrointestinal tract, meaning the human digestion system, including the stomach and intestines (“GIT”), fluids penetrate the outer membrane, the gel swells and gradually expels the active drug through an orifice in the drug reservoir. The rate of drug release is the same in the presence or absence of food, a desirable property. Because of its ideal release profile and lack of food effect, IPC Opco believes it remains a sought-after device for the controlled delivery of drugs, notwithstanding the increased cost associated with its complex manufacture.

(b) Core or Press-Coated system

The core or press-coated system is a two part structural system, comprised of a rapid-dissolve drug-bearing core, embedded in drug-loaded hydrophilic (water attractive) matrix applied to the tablet by press coating. Once inside the GIT, the press-coated matrix swells and gradually releases the drug by a combination of diffusion and erosion. Eventually, the drug-bearing tablet core is exposed and rapidly dissolves in the GIT to provide a burst effect, and further extension in drug release. Drug release is affected by the presence of food.

The sandwiched deposit system is comprised of a layered tablet in which a drug layer is sandwiched between two layers or deposit platforms made of polymeric materials. Once inside the GIT, the polymeric platforms and drug layer erode, but at different rates. Drug release is affected by food.

Although all these systems have demonstrated ideal drug release characteristics, IPC Opco believes their manufacturing processes are cumbersome, complex, expensive, and difficult to reproduce. There is also concern that, being reservoir systems, they may not deliver their entire dose, or may deliver the entire dose all at once due to the crushing action of peristalsis.

IPC Opco’s Technology

IPC Opco’s scientists have developed proprietary controlled-release drug delivery technologies, branded Drug Delivery Engine(™). IPC Opco’s controlled-release technologies consist of drug delivery platforms that facilitate timed release delivery of a wide range of pharmaceuticals. Drug Delivery Engine(™) technologies developed by IPC Opco’s scientists have been used in drugs manufactured and sold by major pharmaceutical companies.

One family of Drug Delivery Engine(™) technologies, the Hypermatrix(™) technologies, are based upon the drug active being imbedded in, and an integral part of, a homogeneous (uniform), core and/or coatings consisting of one or more polymers which affect the release rates of drugs, other excipients (compounds other than the drug active), such as for instance lubricants which control handling properties of the matrix during fabrication, and the drug active itself. The Hypermatrix(™) technologies are the core of IPC Opco’s current marketing efforts and the technologies underlying its existing development agreements.

IPC Opco currently has seven drug development agreements in place. Under each agreement, IPC Opco is engaged by the other party to develop a bioequivalent generic of a specific controlled-release product or a controlled-release version of an existing immediate release product, using IPC Opco’s proprietary technology and know-how. The development of each product is divided into a number of phases, with milestone payments payable to IPC Opco on the completion of each phase, and a royalty payable to IPC Opco based on annual net sales of the product during a fixed period. All of IPC Opco’s intellectual property continues to be exclusively owned by IPC Opco. However, IPC Opco does grant a sole licence to the other party to the drug development agreements within a defined territory for specific drugs that IPC Opco develops for them but only insofar as IPC Opco’s intellectual property relates to the specific product developed for them, for which IPC Opco receives various payments, and not for use in any other products. If the other party fails to make a commercial sale of the product within a certain time period after final regulatory approval to market the product is received, usually this sole license becomes non-exclusive and IPC Opco is entitled to then directly market and sell the product itself. The drug development agreements contain customary representations and warranties, covenants, indemnification and confidentiality provisions for agreements of this type. If the other party terminates the agreement, IPC Opco is entitled to proceed with the development of the specific product at its own expense.

Another such family of technologies is that branded Hyperfoam(™). The Hyperfoam(™) technologies are based upon the drug active being imbedded in but separate from a syntactic foam substrate, the properties of which are used to modulate the release of the drug active. Syntactic foam is a lightweight engineered foam consisting of hollow polymer spheres, suitable for carrying drug actives, embedded in a resin matrix. The Hyperfoam(™) technologies are still in development and are not the subject of any contractual arrangements.

IPC Opco’s present platform of Hypermatrix(™) drug delivery technology includes IntelliMatrix(™), IntelliOsmotics(™), IntelliPellets(™), IntelliGIT(™), IntelliShuttle(™), and NanoMatrix(™), and some of their key attributes are described below. IPC Opco’s present platform of HyperFoam(™) technologies that are currently under development includes SynFoam(™) and NanoFoam(™). Because these technologies are under development, their optimal characteristics and potential uses have not been determined by IPC Opco.

These provide a broad range of release profiles, taking into account the physical and chemical characteristics of a drug product, the therapeutic use of the particular drug, and the optimal site for release of the active pharmaceutical ingredient in the GIT. At present those technologies have been applied in the laboratory and/or in bioavailability/bioequivalence studies in man to such orally administered small molecule drugs as are used in the treatment of cardiovascular, central nervous system, gastro-intestinal, pain, diabetes and other significant indicators.

The Hypermatrix(™) Family of Drug Delivery Engine(™) Technologies

(a) IntelliGIT(™)

The IntelliGIT(™) technology consists of an active drug immobilized in a homogeneous (uniform) matrix structure. A precise choice of mix ratios, polymers, and other ingredients imparts characteristics which protect the drug composition from mechanical degradation due to digestion, and/or from chemical degradation in the acidic stomach environment, and ensures that this technology allows control of release as well as releasing the medication at certain parts of the stomach or intestines without significant food effects or unintentional premature release of the entire drug dose. IPC Opco believes that this technology is most useful for drug molecules with characteristics such as very low or very high potency, opiate analgesics (pain medications derived from the chemical compounds found in opium), or susceptibility to acid degradation. It is also useful for products where a zero-order (constant rate over time, independent of the amount of drug available for dissolution) release profile is desirable.

(b) IntelliMatrix(™)

The IntelliMatrix(™) technology is a proprietary blend of several polymers. Depending on the constituents of the blend and the manner in which these interact, the use of the blend with a drug allows the drug to be released at predetermined rates, while imparting protective characteristics to both the drug and the GIT. This results in protection from the delivered active drug, for the stomach, if required. This is most useful for drugs which require precisely controlled first order release profiles, where the amount released with time is dependent on one component like the amount of drug available for dissolution.

The IntelliOsmotics(™) technology is based upon the inclusion of multiple populations of polymers with distinct chemical bonding characteristics. These set up a complex matrix of hydrophilic (water attracting) and hydrophobic (water repelling) domains. When the tablet or bead is in an aqueous environment, like gastric contents, a “mixture” of water-soluble polymer and drug core is surrounded by gel layer(s) of water-insoluble polymer. Osmotic pressure drives the drug out when solvent passes through the gel layer while the polymer molecules remain. This permits control of the rate of release of the drug active by the variation of polymer ratios. This technology is most useful for drug molecules which require precisely controlled pseudo-first-order release profiles, where the rate of release is proportional to the amount available for dissolution as well as being proportional to one other component; however the effect of the amount of drug is overriding, so that the rate appears first order. This type of release control can be useful when attempting to match difficult profiles for generic formulation.

(d) IntelliPellets(™)

The IntelliPellets(™) technology consists of one or more type (population) of granule, bead, pellet, or tablet in a holding chamber or reservoir, such as a hard gelatin capsule. Each type (population) may be uniquely different from the other in the manner or rate it releases the drug. IPC Opco’s IntelliPellets(™) technology is designed to control, prolong, delay or modify the release of drugs. It is particularly useful for the delivery of multiple drugs, for delayed, timed, pulsed or for chronotherapeutic drug delivery, designed to mimic our internal clocks for therapeutic optimization (the drug is delivered in the right amount for the patient at the right time). This technology is most useful for the delivery of multiple-drug cocktails, or in situations where the timing of a single dose or the sequencing of multiple doses of the same drug is important.

(e) IntelliShuttle(™)

The IntelliShuttle(™) technology provides for drug release past the stomach, such as for drugs required for action beyond the stomach, for drugs which could be destroyed by the stomach environment, or for drugs which could harm the stomach itself. This technology “shuttles” the drug past the stomach to be released at predetermined times or sites where appropriate for optimum therapeutic effect. This technology is most useful for acid labile drug molecules (drugs that are destroyed in acid environment), such as the proton pump inhibitors, of which well-known omeprazole (Prilosec) and lansoprazole (Prevacid) are examples, or for drug molecules which may harm the stomach, of which the well-known aspirin is an example.

Each of the above-noted proprietary technologies was fully developed and ready for application to client drug delivery requirements from the date of inception of IPC Opco. Each of them has been utilized and applied to client drug delivery requirements under IPC Opco’s existing development contracts; in several instances more than one technology has been applied to a single drug development. IPC Opco continues to market all of its existing technologies and to conduct the necessary research to develop new products and technologies. To date, none of the development contracts has proceeded to the point of commercialization, and therefore IPC Opco has not yet seen its proprietary technologies utilized in products sold to consumers.

IPC Opco’s Proprietary Rights and Patents

Proprietary rights are an important aspect of IPC Opco’s business. These include know-how, trade secrets and patents. Know-how and trade secrets are protected by internal company policies and operating procedures, and where necessary, by contractual provisions with development partners and suppliers. IPC Opco also seeks patent protection for inventive advances which form the bases of IPC Opco’s drug delivery technologies. With respect to particular products, IPC Opco may seek patent protection on the commercial composition, its methods of production and its uses, to prevent the unauthorized marketing and sale of competitive products.

Patents which relate to and protect various aspects of IPC Opco’s HyperMatrix and HyperFoam families of drug delivery technologies included the following United States patents which have been issued to IPC Opco: (i) U.S. Patent No. 6,296,876, issued October 2, 2001 and projected to expire October 6, 2017 and U.S. Patent No. 6,479,075, issued November 12, 2002 and projected to expire October 1, 2018, which concern pharmaceutical formulations for acid labile drug actives and compositions which protect the drug active and composition from destruction in acidic environments in the GIT; and (ii) U.S. Patent No. 6,607,751, issued August 19, 2003 and projected to expire October 10, 2017 and U.S. Patent No. 7,090,867, issued on August 15, 2006 and projected to expire October 9, 2018, which describe a controlled release drug delivery technology incorporating a microbial polysaccharide gum. Patents which relate to and protect various aspects of IPC Opco’s HyperFoam family of drug delivery technologies include U.S. Patent No. 6,800,668, issued October 15, 2004 and projected to expire January 19, 2021, and the corresponding issued Canadian Patent No. 2,435,276, which relate to novel syntactic deformable foam compositions used as a carrier or substrate for drug actives, and methods for making these compositions.

In addition to these issued patents, as at September 11, 2009, there were ten pending U.S. Patent applications, and nine corresponding foreign applications pending, including PCT stage and national stage applications, relating to various aspects of IPC Opco’s HyperMatrix and HyperFoam drug delivery technologies, including methods and compositions for coating of tablets and beads, compositions incorporating disintegrants to assist in controlled release, compositions incorporating multiple drug actives, and compositions directed to classes of drug actives designed as therapies for specific indications.

To the extent that any of the aforementioned patents are registered in the name of IPC Opco’s two chief scientists or their holding company, such patents will be transferred to IPC Opco prior to the Effective Date.

Government Regulation

IPC Opco focuses on the development of both branded drug products (which require NDAs) and generic drug products (which require ANDAs). The research and development, manufacture and marketing of controlled-release pharmaceuticals are subject to regulation by U.S., Canadian and other governmental authorities and agencies. Such national agencies and other federal, state, provincial and local entities regulate the testing, manufacturing, safety and promotion of IPC Opco’s products. The regulations applicable to IPC Opco’s products may change as the currently limited number of approved controlled-release products increases and regulators acquire additional experience in this area.

United States Regulation

(a) New Drug Application

IPC Opco will be required by the FDA to comply with NDA procedures for its branded products prior to commencement of marketing by IPC Opco, or its licensees. New drug compounds and new formulations for existing drug compounds which cannot be filed as ANDAs are subject to NDA procedures. These procedures include (a) pre-clinical laboratory and animal toxicology tests; (b) scaling and testing of production batches; (c) submission of an Investigational New Drug Application (“IND”), and subsequent approval is required before any human clinical trials can commence; (d) adequate and well controlled replicate human clinical trials to establish the safety and efficacy of the drug for its intended indication; (e) the submission of an NDA to the FDA; and (f) FDA approval of an NDA prior to any commercial sale or shipment of the product, including pre-approval and post-approval inspections of its manufacturing and testing facilities. If all of this data in the product application is owned by the applicant, the FDA will issue its approval without regard to patent rights that might be infringed or exclusivity periods that would affect the FDA’s ability to grant an approval if the application relied upon data which the applicant did not own. IPC Opco intends to generate all data necessary to support FDA approval of the applications it files.

Pre-clinical laboratory and animal toxicology tests may have to be performed to assess the safety and potential efficacy of the product. The results of these pre-clinical tests, together with information regarding the methods of manufacture of the products and quality control testing, are then submitted to the FDA as part of an IND requesting authorization to initiate human clinical trials. Once the IND notice period has expired, clinical trials may be initiated, unless an FDA hold on clinical trials has been issued.

Clinical trials involve the administration of a pharmaceutical product to individuals under the supervision of qualified medical investigators that are experienced in conducting studies under “Good Clinical Practice” guidelines. Clinical studies are conducted in accordance with protocols that detail the objectives of a study, the parameters to be used to monitor safety and the efficacy criteria to be evaluated. Each protocol is submitted to the FDA and to an Institutional Review Board prior to the commencement of each clinical trial. Clinical studies are typically conducted in three sequential phases, which may overlap. In Phase I, the initial introduction of the product into human subjects, the compound is tested for absorption, safety, dosage, tolerance, metabolic interaction, distribution, and excretion. Phase II involves studies in a limited patient population with the disease to be treated to (1) determine the efficacy of the product for specific targeted indications, (2) determine optimal dosage and (3) identify possible adverse effects and safety risks. In the event Phase II evaluations demonstrate that a pharmaceutical product is effective and has an acceptable safety profile, Phase III clinical trials are undertaken to further evaluate clinical efficacy of the product and to further test its safety within an expanded patient population at geographically dispersed clinical study sites. Periodic reports on the clinical investigations are required.

IPC Opco, or the FDA, may suspend clinical trials at any time if either party believes the clinical subjects are being exposed to unacceptable health risks. The results of the product development, analytical laboratory studies and clinical studies are submitted to the FDA as part of an NDA for approval of the marketing and commercialization of a pharmaceutical product.

(b) Abbreviated New Drug Application

In certain cases, where the objective is to develop a generic version of an approved product already on the market in controlled-release dosages, an ANDA may be filed in lieu of filing an NDA. Under the ANDA procedure, the FDA waives the requirement to submit complete reports of pre-clinical and clinical studies of safety and efficacy and instead requires the submission of bioequivalency data, that is, demonstration that the generic drug produces the same effect in the body as its brand-name counterpart and has the same pharmacokinetic profile, or change in blood concentration over time. The ANDA procedure would be available to IPC Opco for a generic version of a drug product approved by the FDA. In certain cases, an ANDA applicant may submit a suitability petition to the FDA requesting permission to submit an ANDA for a drug product that differs from a previously approved reference drug product (the “Listed Drug”) when the change is one authorized by statute. Permitted variations from the Listed Drug include changes in: (1) route of administration, (2) dosage form, (3) strength and (4) one of the active ingredients of the Listed Drug when the Listed Drug is a combination product. The FDA must approve the petition before the ANDA may be submitted. An applicant is not permitted to petition for any other kinds of changes from listed drugs. The information in a suitability petition must demonstrate that the change from the Listed Drug requested for the proposed drug product may be adequately evaluated for approval without data from investigations to show the proposed drug product’s safety or effectiveness. The advantages of an ANDA over an NDA include reduced research and development costs associated with bringing a product to market, and generally a shorter review and approval time at the FDA.

ANDAs are required to include certifications with respect to any third party patents that claim the Listed Drug or that claim a use for the Listed Drug for which the applicant is seeking approval. If applicable third party patents are in effect and this information has been submitted to the

FDA, the FDA must delay approval of the ANDA until the patents expire. If the applicant believes it will not infringe the patents, it can make a patent certification to the holder of patents on the drug for which a generic drug approval is being sought, which may result in patent infringement litigation which could delay the FDA approval of the ANDA for up to 30 months. If the drug product covered by an ANDA were to be found by a court to infringe another company’s patents, approval of the ANDA could be delayed until the patents expire. Under the Food Drug and Cosmetic Act (“FDC”), the first filer of an ANDA with a “non-infringement” certification is entitled to receive 180 days of market exclusivity. Subsequent filers of generic products would be entitled to market their approved product six months after the earlier of the first commercial marketing of the first filer’s generic product or a successful defense of a patent infringement suit.

Patent expiration refers to expiry of U.S. patents (inclusive of any extensions) on drug compounds, formulations and uses. Patents outside the United States may differ from those in the United States. Under U.S. law, the expiration of a patent on a drug compound does not create a right to make, use or sell that compound. There may be additional patents relating to a person’s proposed manufacture, use or sale of a product that could potentially prohibit such person’s proposed commercialization of a drug compound.

The FDC contains non-patent market exclusivity provisions that offer additional protection to pioneer drug products and are independent of any patent coverage that might also apply. Exclusivity refers to the fact that the effective date of approval of a potential competitor’s ANDA to copy the pioneer drug may be delayed or, in certain cases, an ANDA may not be submitted until the exclusivity period expires. Five years of exclusivity are granted to the first approval of a “new chemical entity”. Three years of exclusivity may apply to products which are not new chemical entities, but for which new clinical investigations are essential to the approval. For example, a new indication for use, or a new dosage strength of a previously approved product, may be entitled to exclusivity, but only with respect to that indication or dosage strength. Exclusivity only offers protection against a competitor entering the market via the ANDA route, and does not operate against a competitor that generates all of its own data and submits a full NDA.

If applicable regulatory criteria are not satisfied, the FDA may deny approval of an NDA or an ANDA or may require additional testing. Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. The FDA may require further testing and surveillance programs to monitor the pharmaceutical product that has been commercialized. Non-compliance with applicable requirements can result in additional penalties, including product seizures, injunction actions and criminal prosecutions.

Canadian Regulation

The requirements for selling pharmaceutical drugs in Canada are substantially similar to those of the United States described above.

(a) Investigational New Drug Application

Before conducting clinical trials of a new drug in Canada, IPC Opco must submit a Clinical Trial Application (“CTA”) to the Therapeutic Products Directorate (“TPD”). This application includes information about the proposed trial, the methods of manufacture of the drug and controls, pre-clinical laboratory and animal toxicology tests on the safety and potential efficacy of the drug, and information on any previously executed clinical trials with the new drug. If, within 30 days of receiving the application, the TPD does not notify IPC Opco that its application is unsatisfactory, IPC Opco may proceed with clinical trials of the drug. The phases of clinical trials are the same as those described above under “United States Regulation — New Drug Application”.

(b) New Drug Submission

Before selling a new drug in Canada, IPC Opco must submit a New Drug Submission (“NDS”) or Supplemental New Drug Submission (“sNDS”) to the TPD and receive a Notice of Compliance (“NOC”) from the TPD to sell the drug. The submission includes information describing the new drug, including its proper name, the proposed name under which the new drug will be sold, a quantitative list of ingredients in the new drug, the methods of manufacturing, processing, and packaging the new drug, the controls applicable to these operations, the tests conducted to establish the safety of the new drug, the tests to be applied to control the potency, purity, stability and safety of the new drug, the results of bio-pharmaceutics and clinical trials as appropriate, the intended indications for which the new drug may be prescribed and the effectiveness of the new drug when used as intended. The TPD reviews the NDS or sNDS. If the submission meets the requirements of Canada’s Food and Drugs Act and Regulations, the TPD will issue an NOC for the new drug.

Where the TPD has already approved a drug for sale in controlled-release dosages, IPC Opco may seek approval from the TPD to sell an equivalent generic drug through an Abbreviated New Drug Submission (ANDS). In certain cases, the TPD does not require the manufacturer of a proposed drug that is claimed to be equivalent to a drug that has already been approved for sale and marketed, to conduct clinical trials; instead, the manufacturer must satisfy the TPD that the drug is bioequivalent to the drug that has already been approved and marketed.

The TPD may deny approval or may require additional testing of a proposed new drug if applicable regulatory criteria are not met. Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. Contravention of Canada’s Food and Drugs Act and Regulations can result in fines and other sanctions, including product seizures and criminal prosecutions.

Proposals have recently been made that, if implemented, would significantly change Canada’s drug approval system. In general, the recommendations emphasize the need for efficiency in Canadian drug review. Proposals include establishment of a separate agency for drug regulation and modeling the approval system on those found in European Union countries. There is no assurance, however, that such changes will be implemented or, if implemented, will expedite the approval of new drugs.

The Canadian government has regulations which can prohibit the issuance of an NOC for a patented medicine to a generic competitor, provided that the patentee or an exclusive licensee has filed a list of its Canadian patents covering that medicine with the Minister of Health and Welfare. After submitting the list, the patentee or an exclusive licensee can commence a proceeding to obtain an order of prohibition directed to the Minister prohibiting him or her from issuing an NOC. The minister may be prohibited from issuing an NOC permitting the importation or sale of a patented medicine to a generic competitor until patents on the medicine expire or the waiver of infringement and/or validity of the patent(s) in question is resolved by litigation in the manner set out in such regulations. There may be additional patents relating to a company’s proposed manufacture, use or sale of a product that could potentially prohibit such company’s proposed commercialization of a drug compound.

Certain provincial regulatory authorities in Canada have the ability to determine whether the consumers of a drug sold within such province will be reimbursed by a provincial government health plan for that drug by listing drugs on formularies. The listing or non-listing of a drug on provincial formularies may affect the prices of drugs sold within provinces and the volume of drugs sold within provinces.

Additional Regulatory Considerations

Sales of IPC Opco’s products by its licensees outside the United States and Canada are subject to regulatory requirements governing the testing, registration and marketing of pharmaceuticals, which vary widely from country to country.

Under the U.S. Generic Drug Enforcement Act, ANDA applicants (including officers, directors and employees) who are convicted of a crime involving dishonest or fraudulent activity (even outside the FDA regulatory context) are subject to debarment. Debarment is disqualification from submitting or participating in the submission of future ANDAs for a period of years or permanently. The Generic Drug Enforcement Act also authorizes the FDA to refuse to accept ANDAs from any company which employs or uses the services of a debarred individual. IPC Opco does not believe that it receives any services from any debarred person.

In addition to the regulatory approval process, pharmaceutical companies are subject to regulations under provincial, state and federal law, including requirements regarding occupational safety, laboratory practices, environmental protection and hazardous substance control, and may be subject to other present and future local, provincial, state, federal and foreign regulations, including possible future regulations of the pharmaceutical industry. IPC Opco believes that it is in compliance in all material respects with such regulations as are currently in effect.

Employees

As of September 1, 2009, the IPC Companies had 21 full-time employees engaged in administration and research and development. None of IPC Opco’s employees is represented by a labour union and the IPC Companies have never experienced a work stoppage.

Description of Property

On October 1, 2004, IPC Opco entered into a 5-year lease agreement for a 25,000 square foot facility at 30 Worcester Road, Toronto, Ontario, Canada M9W 5X2, at approximately $100,000 Canadian per year. The lease term expires on October 1, 2009, with an option for an additional 5-year term at market rates. IPC Opco intends to renew the lease. IPC Opco uses its facilities as a laboratory, office space, and current Good Manufacturing Practices (“cGMP”) scale-up and small to medium-scale manufacturing.

In the second quarter of 2006 IPC Opco completed renovation and construction of its administrative facilities and cGLP research laboratories and construction of a cGMP manufacturing plant for solid oral dosage forms at its 30 Worcester Road facility in Toronto. The cost of the build-out and equipping of IPC Opco’s administrative, laboratory and manufacturing facility was approximately $1,685,000, with approximately $810,000 for plant and $950,000 for equipment. The facility now consists of approximately 4,900 sq. ft. for administrative space, 4,300 sq. ft. for R&D, 9,200 sq. ft. for manufacturing, and 3,000 sq. ft. for warehousing.

Legal Proceedings

As of September 1, 2009, IPC Opco is not aware of any pending litigation or threatened claim that materially affects the operations of IPC Opco. The only claims outstanding that are known to IPC Opco involve two complaints made in 2007 by certain parties who have claimed to hold patents relating to a branded drug called FOCALIN XR® and who filed complaints alleging patent infringement against IPC Opco and certain other parties. These complaints relate to an application by IPC Opco that seeks the FDA’s approval to commercialize generic versions of each of four strengths of FOCALIN XR®. These generic drug products have been developed by IPC Opco under a collaboration arrangement with Par Pharmaceutical, Inc. (“Par” or “Par Pharmaceutical”) under which Par is responsible for litigation and its costs. Par is the agent for IPC Opco in respect of its filing with the FDA for approval to commercialize the generic versions of FOCALIN XR®. Lawsuits such as these are an ordinary and expected part of the process of obtaining approval to commercialize a generic drug product in the United States. IPC Opco remains confident that its generic versions of FOCALIN XR® do not infringe those patents. Together with its development partner, Par Pharmaceutical, IPC Opco intends to vigorously defend against the complaints described above.

The authorized capital of IPC US consists of 40,000,000 IPC US Common Shares and 20,000,000 IPC US Preferred Shares, of which 10,850,000 are designated as IPC US Special Voting Shares. The remaining 9,150,000 IPC US Preferred Shares have not been designated. As of the date hereof, 6,023,944 IPC US Common Shares and 10,850,000 IPC US Special Voting Shares are issued and outstanding. Certain additional IPC US Common Shares are issuable to a broker in conjunction with the Arrangement and Merger as compensation for services

provided to IPC US. Such number of shares is subject to determination of the Vasogen Exchange Ratio and the IPC Exchange Ratio as provided for in the Joint Circular. Assuming completion of the Cervus Arrangement, a Vasogen Exchange Ratio of 0.0667 and an IPC Exchange Ratio of 0.559061, an additional 94,713 IPC US Common Shares are issuable to such IPC broker immediately prior to the Effective Time as broker compensation in connection with the IPC Arrangement.

(a) IPC US Common Shares

The holders of IPC US Common Shares, along with holders of IPC US Special Voting Shares as a single class, are entitled to one vote for each share held of record on all matters submitted to a vote of IPC US Shareholders. The IPC US Shares do not have cumulative voting rights in the election of directors, and accordingly, holders of a majority of the IPC US voting shares are able to elect all of the directors. Subject to preferences that may be granted to any then outstanding preferred shares, holders of IPC US Shares are entitled to receive dividends rateably, as may be declared by the IPC US Board out of funds legally available, as well as any distributions to the IPC US Shareholders. In the event of liquidation, dissolution or winding up, holders of IPC US Common Shares are entitled to share rateably in all of IPC US’ assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred shares. Holders of IPC US Common Shares have no pre-emptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the IPC US Common Shares.

(b) IPC US Preferred Shares

IPC US Preferred Shares may be issued from time to time in one or more series as may from time to time be determined by the IPC US Board. The IPC US Board has authority, without action by the IPC US Shareholders, to determine the voting rights, preferences as to dividends and liquidation, conversion rights and any other rights of such series. Any IPC US Preferred Shares, if and when issued in the discretion of the IPC US Board, may carry voting, conversion or other rights superior to those of the IPC US Common Shares and may adversely affect the voting power and rights of the holders of IPC US Common Shares.

IPC US has designated and issued 10,850,000 IPC US Special Voting Shares, par value U.S.$0.001 per share, all of which are held by IntelliPharmaCeutics Inc. The holder of IPC US Special Voting Shares, along with the holders of IPC US Common Shares as a single class, are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders. In the event of liquidation, dissolution, or winding-up, holders of IPC US Special Voting Shares have no pre-emptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the IPC US Special Voting Shares. For each IPC US Common Share issued to the holder of IPC Opco’s Exchangeable Shares described below, one IPC US Special Voting Share will be automatically redeemed and cancelled, without any repayment of capital. IPC US Special Voting Shares are convertible at the sole option of the holder into IPC US Common Shares by exercising the exchange rights associated with the IPC Opco Exchangeable Shares, as described below.

IPC Opco’s authorized capital consists of 10,000,000,000 IPC Opco Common Shares, 10,850,000 IPC Opco Convertible Voting Shares and 10,850,000 IPC Opco Exchangeable Shares. As of the date hereof, 15,190,000 IPC Opco Common Shares, 10,850,000 IPC Opco Convertible Voting Shares and no IPC Opco Exchangeable Shares are issued and outstanding.

(a) IPC Opco Common Shares

The holders of IPC Opco Common Shares are entitled to receive notice of and to attend all meetings of IPC Opco Shareholders and to vote thereat, except for meetings at which only holders of another specified class or series of shares are entitled to vote separately as a class. The holders of IPC Opco Common Shares, as a class, are entitled, notwithstanding the number of IPC Opco Common Shares and Convertible Voting Shares outstanding, to such number of votes as a class as is equal to 50% of all votes on any matter to be dealt with at any IPC Opco Shareholder meeting. Subject to preferences that may be granted to any then outstanding preferred shares, holders of IPC US Shares are entitled to receive dividends rateably, as may be declared by the board of directors of IPC Opco out of funds legally available, as well as any distributions to the IPC Opco Shareholders. In the event of liquidation, dissolution or winding up, holders of IPC Opco Common Shares are entitled to share rateably in all of IPC Opco’s assets remaining after payment of liabilities and the liquidation preference of any then outstanding preferred shares. Holders of IPC Opco Common Shares have no pre-emptive or other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the IPC Opco Common Shares.

(b) IPC Opco Convertible Voting Shares

The holders of the IPC Opco Convertible Voting Shares are entitled to receive notice of and to attend all meetings of IPC Opco Shareholders and to vote thereat, except for meetings at which only holders of another specified class or series of shares are entitled to vote separately as a class. The holders of IPC Opco Convertible Voting Shares, as a class, are entitled, notwithstanding the number of IPC Opco Common Shares and Convertible Voting Shares outstanding, to such number of votes as a class as is equal to 50% of all votes on any matter to be dealt with at any IPC Opco Shareholder meeting. Each IPC Opco Convertible Voting Share, among other things, (a) entitles the holder to voting rights in IPC Opco, (b) entitles the holder to receive Canadian dollar equivalent dividends equal to dividends paid on the IPC US Common Shares, (c) is convertible at the option of the holder, at his or her election, for one IPC Opco Exchangeable Share, plus an additional amount for declared and unpaid dividends; and (d) entitles the holder, on liquidation of IPC US or IPC Opco, to receive in exchange for each Convertible Voting Share, one IPC US Common Share, plus an amount for declared and unpaid dividends. Apart from the right to be treated as being

economically equivalent to IPC US Common Shares, the Convertible Voting Shares do not have the right to receive any additional amount from IPC Opco by way of dividends, or upon liquidation, dissolution, winding up or otherwise.

IPC US has reserved 10,850,000 IPC US Common Shares for issuance upon exchange of the IPC Opco Exchangeable Shares. Upon exchange of the IPC Opco Exchangeable Shares, IPC US Special Voting Shares will automatically be redeemed and cancelled, without any repayment of capital, on the basis of one IPC US Special Voting Share for each IPC Opco Exchangeable Share exchanged. Each IPC Opco Exchangeable Share, among other things, (a) entitles the holder to receive Canadian dollar equivalent dividends equal to dividends paid on the IPC US Common Shares, (b) is exchangeable at the option of the holder, at his or her election, for one IPC US Common Share, plus an additional amount for declared and unpaid dividends; and (c) entitles the holder, on liquidation of IPC US or IPC Opco, to receive in exchange for each Exchangeable Share, one IPC US Common Share, plus an amount for declared and unpaid dividends. Apart from the right to be treated as being economically equivalent to IPC US Common Shares, the Exchangeable Shares do not have the right to receive any additional amount from IPC Opco by way of dividends, or upon liquidation, dissolution, winding up or otherwise.

Contractual Pre-emptive Right

Pursuant to an agreement dated August 1, 2007 between IPC US and Par, if IPC US proposes to issue treasury shares at a price of less than U.S.$7.00 per share, Par has the right to elect, within 15 days of receipt of notice thereof, to subscribe for additional treasury shares of IPC US at the same price and terms upon which IPC US proposes to issue same. This pre-emptive right expires upon, among other things, the listing or quotation of the IPC US Common Shares on a stock exchange or other organized trading market in Canada.

Dividend Policy

The payment of dividends on the IPC US Shares is at the discretion of the IPC US Board and depends on the financial condition and the need to finance the business activities of IPC US. IPC US has not paid any dividends on the IPC US Shares since its incorporation and there is no present intention of paying any dividends.

Prior Sales

During the 12 months preceding the date of this Joint Circular, IPC US has not issued any IPC US Shares. A broker to the IPC Companies is entitled to certain compensation in connection with the IPC Arrangement. Assuming a Vasogen Exchange Ratio of 0.0667, and IPC Exchange Ratio of 0.559061 and completion of the Cervus Arrangement, 94,713 IPC US Common Shares are issuable immediately prior to the Effective Time as broker compensation.

Market for Securities

The IPC US Shares and the IPC Opco Shares are not traded on any exchange or market system.

Principal Shareholders

To the knowledge of the directors and executive officers of IPC US, as of the date hereof the only person that beneficially owns, directly or indirectly, or controls or directs voting securities of IPC US carrying more than 10% of the voting rights attached to the voting securities of IPC US is as follows:

Name		Number of IPC US Special Voting Shares		Percentage of Issued and Outstanding IPC US Special Voting Shares
IntelliPharmaCeutics Inc.(1)		10,850,000		100	%

(1) A privately-held company owned and controlled by Drs. Isa and Amina Odidi and their family trust, to be renamed “Odidi Holdings Inc.” in connection with the IPC Arrangement.

Consolidated Capitalization

	As at December 31, 2008 (unaudited) (U.S.$)
Due to related parties(1)	925,830
Shareholders’ equity	(583,075	)
Share capital	16,874
Additional Paid-in Capital	10,482,120
Accumulated other comprehensive income (loss)	385,647
Deficit	(11,467,716	)
Total shareholders’ equity	(583,075	)

Note:
(1) The amount due to related parties increased to U.S.$1,530,610 as at June 30, 2009.

Stock Options

As of the close of business on September 1, 2009, there were outstanding options to acquire an aggregate of 5,038,927 IPC US Common Shares, of which 38,927 were issued pursuant to the IPC US Stock Option Plan. IPC US has in place the IPC US Option Plan for the benefit of certain officers, directors, employees and consultants of IPC US. The maximum number of IPC US Common Shares that may be issued under the IPC US Option Plan is 1,500,000.

In addition, IPC US has granted performance based stock options to purchase up to 5,000,000 IPC US Common Shares to Drs. Isa and Amina Odidi pursuant to an agreement dated September 10, 2004. These options vest in increments of 500,000 upon the IPC Companies attaining certain milestones related to FDA filing and FDA approval in respect of certain drugs. The options are exercisable at a price of U.S.$2.00 per share and expire on September 10, 2014. As of September 1, 2009, 500,000 of these options have vested and are exercisable.

The following table sets forth the number of IPC US Options owned by directors and senior officers of IPC US as of September 1, 2009 and the grant and expiry dates for each:

Name	Grant Date	Expiry Date	Outstanding IPC US Options	Exercise Price (U.S.$)

Drs. Isa and Amina Odidi	September, 2004	September, 2014	5,000,000	$	2.00

Dr. Arnold Beckett	August 2005	August 2015	10,000	$	2.00

Dr. David Filer(1)	June 2006 - February 2007	September 2009 - February 2010(1)	18,927	$	3.00

Dr. Ameera Al-Jobore	June 2005	June 2010	10,000	$	3.00

Total IPC US Options Outstanding			5,038,927

(1) Expiring as to 3.333 per month with the remaining balance in February, 2010.

In addition, IPC US has agreed to grant non-transferrable broker compensation options to an arm’s length third party broker in connection with the completion of the IPC Arrangement. Such broker compensation options will be issued immediately prior to the Effective Time, will expire on December 31, 2010 and will entitle the holder to purchase that number of IPC US Common Shares which, following the Effective Time, will be equal 8/14ths of 10% of the number of New IPC Shares issued to former Vasogen Shareholders pursuant to the Arrangement, exercisable at a price equal to the deemed value of such New IPC Shares issued to such former Vasogen Shareholders.

Selected Financial Data

The following selected consolidated financial information concerning IPC US has been derived from and should be read in conjunction with the audited consolidated financial statements of IPC US for the years ended December 31, 2008, 2007 and 2006 attached to this Joint Circular as Appendix “I” and the unaudited consolidated financial statements of IPC US for the six months ended June 30, 2009 attached to this Joint Circular as Appendix “J” and the respective corresponding management discussion and analysis attached to this Joint Circular as Appendix “Q”.

	As at and for the six months ended June 30, 2009		As at and for the year ended December 31, 2008		As at and for the year ended December 31, 2007		As at and for the year ended December 31, 2006
	(in thousands of U.S.$) (unaudited)		(in thousands of U.S.$) (audited)		(in thousands of U.S.$) (audited)		(in thousands of U.S.$) (audited)
Net loss	(798	)	(3,765	)	(1,291	)	(1,320	)
Total assets	2,600		3,026		6,878		3,027
Total liabilities	4,149		3,609		4,557		2,567
Shareholder equity	(1,549	)	(583	)	2,322		460
Loss per share - basic and diluted	(0.05	)	(0.22	)	(0.08	)	(0.08	)
Dividends	nil		nil		nil		nil

Directors and Executive Officers

There are currently six directors on the IPC US Board. Executive officers of the IPC Companies are appointed annually by the IPC US Board and serve until their successors are duly appointed and qualified.

The following table sets for the name and municipality of residence of the directors and officers of the IPC Companies, as well as each individual’s position within the IPC Companies, principal occupation within the five (5) preceding years and the number of securities of the IPC Companies beneficially owned by each such director or executive officer.

Name and Municipality of Residence	Position	Principal Occupation	Shares of IPC US and IPC Opco Beneficially Owned or Over which Control Is Exercised(1)(2)		Shares of IPC US Subject to Options held(1)

Dr. Isa Odidi Toronto, Ontario	Chairman and Chief Executive Officer	Officer of the IPC Companies	10,850,000	(3)	5,000,000	(4)

Dr. Amina Odidi Toronto, Ontario	President, Chief Operating Officer and Director	Officer of the IPC Companies	10,850,000	(3)	5,000,000	(4)

John N. Allport Castleton, Ontario	Vice-President, Legal Affairs and Licensing and Director	Officer of the IPC Companies	200,000		N/A

Arnold Beckett London, England	Director	Retired Professor of Pharmaceutics	N/A		N/A

Kenneth Keirstead Toronto, Ontario	Director	Executive Manager, Lyceum Group	N/A		N/A

Bahadur Madhani Toronto, Ontario	Director	President, Equiprop Management Limited	N/A		N/A

Patrick N. Yat Mississauga, Ontario	Vice-President, Pharmaceutical Analysis and Chemistry	Officer of the IPC Companies	50,000		N/A

(1)	The information as to shares of the IPC Companies beneficially owned or controlled or subject to options held has been furnished by the respective directors and executive officers individually.

(2)	This number does not include shares of the IPC Companies that may be purchased upon the exercise of any options held by the individual.

(3)	Shares owned by Drs. Isa and Amina Odidi are owned through a family holding company, IntelliPharmaCeutics Inc.

(4)	Held jointly by Drs. Isa and Amina Odidi.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

The following information has been furnished by the directors and executive officers of the IPC Companies.

No director or executive officer of IPC US or IPC Opco is, as at the date hereof or has been, within the 10 years before the date hereof, a director, chief executive officer or chief financial officer of any company (including the IPC Companies), that:

· was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or

· was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Except as set out below, no director or executive officer of the IPC Companies or shareholder holding a sufficient number of securities of the IPC Companies to affect materially the control thereof:

· is, as at the date hereof, or has been within the 10 years before the date hereof, a director or executive officer of any company (including the IPC Companies) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

· has, within the 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

On June 25, 2004, Mr. Keirstead filed a voluntary assignment in bankruptcy and was issued a discharge on September 23, 2006.

No director or executive officer of the IPC Companies or shareholder holding a sufficient number of securities of the IPC Companies to affect materially the control thereof, has been subject to:

· any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

· any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

Certain of the directors and officers of IPC US or IPC Opco are also directors, officers and shareholders of other companies and conflicts may arise between their duties as directors or officers of the respective IPC Company and as directors, officers or shareholders of other companies. All such possible conflicts are required to be disclosed in accordance with the requirements of applicable law and those concerned are required to govern themselves in accordance with the obligations imposed upon them by law and such code.

Executive Compensation

Compensation Discussion and Analysis

Background - IPC US, through IPC Opco, develops both new and generic controlled-release pharmaceutical products and licenses these developed products for commercialization. At present, no such licensed product has been commercialized and IPC US’s primary focus is on obtaining regulatory approval for 15 proposed products. As of September 1, 2009, the IPC Companies had 21 full-time employees engaged in administration and research and development.

Objectives - The overall objectives of IPC US’s compensation program include: (a) attracting and retaining talented executive officers; (b) aligning the interests of those executive officers with those of IPC US; and (c) linking individual executive officer compensation to the performance of IPC US. IPC US’s compensation program is currently designed to compensate executive officers for performance of their duties and to reward certain executive officers for performance relative to certain milestones.

Elements of Compensation - The elements of compensation awarded to, earned by, paid to, or payable to the Named Executive Officers (as hereinafter defined) for the most recently completed financial year are: (a) base salary; and (b) perquisites and personal benefits. Prior to the most recently completed financial year, the Named Executive Officers have also received option-based awards.

Base salary is a fixed element of compensation payable to each Named Executive Officer for performing his or her position’s specific duties. The amount of base salary for a Named Executive Officer has been determined through negotiation of an employment agreement with each Named Executive Officer (see “Summary Compensation Table — Employment Agreement with Dr. Isa Odidi; Employment Agreement with Dr. Amina Odidi” below). While base salary is intended to fit into IPC US’s overall compensation objectives by serving to attract and retain

talented executive officers, the size of IPC US and the nature and stage of its business also impact the level of base salary. To date, the level of base salary has not impacted IPC US’s decisions about any other element of compensation.

Option-based awards are a variable element of compensation that reward each Named Executive Officer for performance overall. Option-based awards are intended to fit into IPC US’s overall compensation objectives by aligning the interests of the Named Executive Officers with those of IPC US, and linking individual Named Executive Officer compensation to the performance of IPC US. The IPC US Board, which includes the Named Executive Officers, is responsible for setting and amending any equity incentive plan under which an option-based award is granted.

IPC US has in place the IPC US Option Plan for the benefit of certain officers, directors, employees and consultants of IPC US, including the Named Executive Officers (see “Certain Information Concerning the Parties — Information Concerning IPC US and IPC Opco — Stock Options”). However, to date, the Named Executive Officers have not been issued options under such plan. Rather, IPC US has granted performance-based options to the Named Executive Officers pursuant to a separate option agreement, which was negotiated with the Named Executive Officers at the same time as their employment agreements (see “Summary Compensation Table — Separate Option Agreement” below). These options vest upon the IPC Companies attaining certain milestones relating to FDA filings and approvals for company drugs, such that 500,000 options vest in connection with each of the FDA filings for the first five company drugs and 500,000 options vest in connection with each of the FDA approvals for the first five company drugs. To date, the level of these performance-based options has been taken into account by the IPC US Board and impacted IPC US’s decisions about base salary and option-based awards under the IPC US Option Plan for the Named Executive Officers.

IPC US also provides perquisites and personal benefits to its Named Executive Officers, including basic employee benefit plans, which are available to all employees, and a car allowance to cover the cost of an automobile for business purposes. These perquisites and personal benefits were determined through negotiation of an employment agreement with each Named Executive Officer (see “Summary Compensation Table — Employment Agreement with Dr. Isa Odidi; Employment Agreement with Dr. Amina Odidi” below). While perquisites and personal benefits are intended to fit into IPC US’s overall compensation objectives by serving to attract and retain talented executive officers, the size of IPC US and the nature and stage of its business also impact the level of perquisites and benefits. To date, the level of perquisites and benefits has not impacted IPC US’s decisions about any other element of compensation.

Summary Compensation Table

The following table (presented in accordance with Form 51-102F6 — Statement of Executive Compensation (“Form 51-102F6”) under National Instrument 51-102 — Continuous Disclosure Obligations) sets forth all direct and indirect compensation for, or in connection with, services provided to IPC US and IPC Opco for the financial years ended December 31, 2008, 2007 and 2006 in respect of the “Named Executive Officers” (as defined under Form 51-102F6) of IPC US (the “Named Executive Officers”).

Name and
principal
position
(a)

Year
(b)

Salary
(U.S.$)
(c)

Share-based awards
(U.S.$)
(d)

Option-
based
awards
(U.S.$)(1)
(e)

Non-equity
incentive plan
compensation
(U.S.$)
(f)

Annual incentive plans
(f1)

Long-
term
incentive plans
(f2)

Pension value
(U.S.$)
(g)

All other
compensation
(U.S.$)
(h)

Total
compensation
(U.S.$)
(i)

Dr. Isa Odidi, Chairman& Chief Executive Officer

2008
2007
2006

290,462
288,545
279,690

N/A
N/A
N/A

Nil
Nil
Nil

N/A
N/A
N/A

11,245

11,170

8,581

301,707

299,715

288,271

Dr. Amina Odidi, President & Chief Operating Officer

2008
2007
2006

290,462
288,545
279,690

N/A
N/A
N/A

Nil
Nil
Nil

N/A
N/A
N/A

11,245

11,170

8,581

301,707

299,715

288,271

Significant factors necessary to understand the information disclosed in the Summary Compensation Table above include the terms of each Named Executive Officer’s employment agreement and the terms of the separate option agreement.

(1) Drs. Isa and Amina Odidi entered into a separate option agreement with IPC US dated September 10, 2004 which is described below and in “Information Concerning IPC US and IPC Opco — Stock Options”.

Employment Agreement with Dr. Isa Odidi — IPC Opco entered into an employment agreement effective September 1, 2004, for Dr. Odidi, as Chairman, Chief Executive Officer and Co-Chief Scientific Officer, to receive a base salary of U.S.$200,000 per year, which is paid in Canadian dollars, to be increased annually each year during the term of the agreement by twenty percent of the prior year’s salary. In addition, he is entitled to: (a) participate in the IPC US Option Plan; (b) participate in all employee benefit plans and programs; and (c) a car allowance of up to U.S.$1,000 per month. The initial term of the employment agreement was until September 30, 2007, at which time, pursuant to the terms of the agreement, the agreement was deemed to be extended automatically for an additional three-year period on the same terms and conditions (i.e. until September 30, 2010). The agreement will continue to be extended automatically for successive additional three-year periods on the same terms unless IPC Opco gives Dr. Odidi contrary written notice at least two years prior to the date on which the agreement would otherwise be extended. See “Termination and Change of Control Benefits” below. Dr. Odidi’s employment agreement was amended on August 1, 2007 and June 8, 2009 to provide for additional intellectual property and non-competition provisions and to provide for non-solicitation provisions, respectively.

Employment Agreement with Dr. Amina Odidi - IPC Opco entered into an employment agreement effective September 1, 2004, for Dr. Odidi, as President, Chief Operating Officer and Co-Chief Scientific Officer, to receive a base salary of U.S.$200,000, which is paid in Canadian dollars, per year, to be increased annually each year during the term of the agreement by twenty percent of the prior year’s salary. In addition, she is entitled to: (a) participate in the IPC US Option Plan; (b) participate in all employee benefit plans and programs; and (c) a car allowance of up to U.S.$1,000 per month. The initial term of the employment agreement was until September 30, 2007, at which time, pursuant to the terms of the agreement, the agreement was deemed to be extended automatically for an additional three-year period on the same terms and conditions (i.e. until September 30, 2010). The agreement will continue to be extended automatically for successive additional three-year periods on the same terms unless IPC Opco gives Dr. Odidi contrary written notice at least two years prior to the date on which the agreement would otherwise be extended. See “Termination and Change of Control Benefits” below. Dr. Odidi’s employment agreement was amended on August 1, 2007 and June 8, 2009 to provide for additional intellectual property and non-competition provisions and to provide for non-solicitation provisions, respectively.

Separate Option Agreement - IPC US entered into a separate option agreement dated September 10, 2004 with Drs. Isa Odidi and Amina Odidi jointly pursuant to which IPC US granted them performance-based stock options to purchase up to 5,000,000 IPC US Common Shares. These options vest upon the IPC Companies attaining certain milestones (see “Compensation Discussion & Analysis — Elements of Compensation” above). The options are exercisable at a price of U.S.$2.00 per share and expire on September 10, 2014. As of September 1, 2009, 500,000 of these options have vested and are exercisable. See “Information Concerning IPC US and IPC Opco — Stock Options”.

Salaries payable by IPC US to each NEO are paid in Canadian dollars. All amounts are expressed in U.S. dollars converted at the exchange rate of U.S.$0.9371 to C$1.00 (2007 — U.S.$0.9309; 2006 — U.S.$0.8581) being the average closing exchange rate quoted by the Bank of Canada for the respective periods.

Incentive Plan Awards

Outstanding Option-Based Awards and Share-Based Awards — The following table (presented in accordance with Form 51-102F6) sets forth for each Named Executive Officer all awards outstanding at the end of the most recently completed financial year, including awards granted before the most recently completed financial year. See “Information Concerning IPC US and IPC Opco — Stock Options”.

Option-based Awards

Share-based Awards

Name

Number of
securities
underlying
unexercised
options
(#)

Option
exercise
price
(U.S.$)

Option
expiration
date

Value of
unexercised
in-the-money
options
(U.S.$)

Number of
shares or
units of
shares that
have not
vested
(#)

Market or
payout value
of share-
based
awards that
have not
vested
(U.S.$)

(a)

(b)

(c)

(d)

(e)

(f)

Drs. Isa Odidi and Amina Odidi(1)

5,000,000

2.00

VASOGEN INC 6-K