ARRANGEMENT AGREEMENT Between CERVUS LP and CERVUS GP LTD. and VASOGEN INC. August 14, 2009

ARTICLE 1 - INTERPRETATION

1

1.1

Definitions

1

1.2

Interpretation Not Affected by Headings, etc

9

1.3

Number, etc.

10

1.4

Date for Any Action

10

1.5

Entire Agreement

10

1.6

Currency

10

1.7

Accounting Matters

10

1.8

Disclosure in Writing

10

1.9

Interpretation Not Affected by Party Drafting

10

1.10

GP Power and Authority

10

1.11

Exhibits

11

ARTICLE 2 – THE ARRANGEMENT

11

2.1

Plan of Arrangement

11

2.2

Interim Order

11

2.3

Information Circulars and Meetings

12

2.4

Effective Date

13

ARTICLE 3 - COVENANTS

13

3.1

Covenants of Cervus and Cervus GP

13

3.2

Covenants of Vasogen

15

3.3

Mutual Covenants Regarding the Arrangement

18

3.4

Mutual Covenants Regarding Non-Solicitation

19

3.5

Provision of Information; Access

21

ARTICLE 4 - REPRESENTATIONS AND WARRANTIES

22

4.1

Representations and Warranties of Cervus

22

4.2

Representations and Warranties of Vasogen

23

ARTICLE 5 - CONDITIONS PRECEDENT

26

5.1

Mutual Conditions Precedent

26

5.2

Additional Conditions to Obligations of Cervus and Cervus GP

27

5.3

Additional Conditions to Obligations of Vasogen

29

5.4

Notice and Effect of Failure to Comply with Conditions

30

5.5

Satisfaction of Conditions

30

ARTICLE 6 - AMENDMENT

30

6.1

Amendment

30

ARTICLE 7 - TERMINATION

31

7.1

Termination

31

7.2

Notice and Cure Provisions

32

7.3

Termination Fee

33

7.4

Damages and Remedies

33

ARTICLE 8 - CONFIDENTIALITY

34

8.1

Confidentiality

34

ARTICLE 9 - NOTICES

35

9.1

Notices

35

ARTICLE 10 - GENERAL

37

10.1

Binding Effect

37

10.2

Assignment

37

10.3

Disclosure

37

10.4

Costs

37

10.5

Severability

37

10.6

Further Assurances

37

10.7

Time of Essence

38

10.8

Governing Law

38

10.9

Waiver

38

10.10

Obligations

38

10.11

Counterparts

38

EXHIBIT A -

FORM OF PLAN OF ARRANGEMENT

A-1

EXHIBIT B -

FORM OF INDEMNITY AGREEMENT

B-1

EXHIBIT C -

REQUIRED APPROVALS

C-1

EXHIBIT D -

FORMS OF ARRANGEMENT RESOLUTIONS

D-1

EXHIBIT E -

FORM OF DIVESTITURE AGREEMENT

E-1

1.1

Definitions

(a)

any and all proprietary rights provided under:

(i)

patent law;

(ii)

copyright law (including moral rights);

(iii)

trade-▇▇▇▇ law;

(iv)

design patent or industrial design law;

(v)

semi-conductor chip or mask work or integrated circuit topography law; or

(vi)

any other statutory provision or common law principle applicable to this Agreement, including trade secret law, which may provide a right in either hardware, software, information (including Confidential Information), trademarks, ideas, formulae, algorithms, concepts, inventions, processes or know-how generally, or the expression or use of the same;

(b)

any and all applications, registrations, licences, sub-licences, franchises, agreements or any other evidence of a right in any of the foregoing; and

(c)

all licences and waivers and benefits of waivers of the intellectual property rights set out in (a) and (b) above, all future income and proceeds from the intellectual property rights set out in (a) and (b) above, and all rights to damages and profits by reason of the infringement or violation of any of the intellectual property rights set out in (a) and (b) above;

(i)

any change in general economic, business, regulatory, market or political conditions, in each case whether regional, domestic or international, including changes or disruptions in international capital, financial, currency exchange or commodities markets;

(ii)

natural disasters, acts of God, any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism or civil unrest;

(iii)

subject to Section 5.2(e), any change in Applicable Laws of any Governmental Entity or interpretations thereof by any Governmental Entity or in GAAP (as defined below);

(iv)

any change generally affecting the industries in which a Party conducts its business;

(v)

the execution, announcement or performance of this Agreement or consummation of the transactions contemplated hereby, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of a Party with any of its customers, employees, shareholders, financing sources, vendors, distributors, partners or suppliers as a direct result thereof or in connection therewith;

(vi)

in respect of Vasogen, any change in the market price or trading volume of the securities of Vasogen, or any suspension of trading in securities generally on any securities exchange on which the securities of Vasogen trade or any delisting of securities on the NASDAQ Capital Market;

(vii)

the failure of a Party in and of itself to meet any internal or public projections, forecasts or estimates of revenues or earnings (but it being understood that the causes underlying such failure may be taken into account in determining whether a Material Adverse Effect has occurred);

(viii)

in respect of Vasogen, any actions taken (or omitted to be taken) by Vasogen or its Subsidiaries at the written request of Cervus;

(ix)

in respect of Vasogen, any actions taken (or omitted to be taken) by Vasogen or its Subsidiaries pursuant to the terms and conditions of the IPC Agreements provided they are on the terms and in the order set out in the Arrangement and are not inconsistent with Vasogen’s obligations to Cervus and Cervus GP under this Agreement;

(x)

in respect of Cervus, any actions taken (or omitted to be taken) by Cervus or its Subsidiaries at the written request of Vasogen or its Subsidiaries;

(xi)

any action taken by any Party that is required pursuant to this Agreement; or

(xii)

any of the matters specifically disclosed in the Vasogen Disclosure Letter;

1.2

Interpretation Not Affected by Headings, etc.

1.3

Number, etc.

1.4

Date for Any Action

1.5

Entire Agreement

1.6

Currency

1.7

Accounting Matters

1.8

Disclosure in Writing

1.9

Interpretation Not Affected by Party Drafting

1.10

Cervus GP Power and Authority

1.11

Exhibits

2.1

Plan of Arrangement

2.2

Interim Order

(a)

for the purpose of the Cervus Meeting:

(i)

the securities of Cervus for which holders shall be entitled to vote on the Cervus Resolution at the Cervus Meeting shall be the Cervus Units;

(ii)

each of the Cervus Unitholders shall be entitled to one vote for each Cervus Unit held by such holder;

(iii)

the requisite majority for the approval of the Cervus Resolution shall be two-thirds of the votes cast by Cervus Unitholders present in person or represented by proxy at Cervus Meeting; and

(iv)

if the Court provides Cervus Unitholders with a right to dissent, such rights shall be provided on terms similar to Section 190 of the CBCA provided that such rights must be exercised not less than 48 hours prior to the Cervus Meeting.

(b)

for the purpose of the Vasogen Meeting:

(i)

the securities of Vasogen for which holders shall be entitled to vote on the Vasogen Resolution at the Vasogen Meeting shall be the Vasogen Shares;

(ii)

each of the Vasogen Shareholders shall be entitled to one vote for each Vasogen Share held by such shareholder;

(iii)

the requisite majority for the approval of the Vasogen Resolution shall be two-thirds of the votes cast by the Vasogen Shareholders present in person or represented by proxy at the Vasogen Meeting; and

(iv)

the Vasogen Shareholders will be given a right to dissent on terms similar to Section 190 of the CBCA, provided that such rights must be exercised not less than 48 hours prior to the Vasogen Meeting.

(c)

for the purpose of the Cervus GP Resolution:

(i)

the securities of Cervus GP for which holders shall be entitled to vote on the Cervus GP Resolution at the Cervus GP Meeting shall be the Cervus GP Shares;

(ii)

each of the Cervus GP Shareholders shall be entitled to one vote for each Cervus GP Share held by such shareholder; and

(iii)

the requisite majority for the approval of the Cervus GP Resolution shall be two-thirds of the votes cast by the Cervus GP Shareholders present in person or represented by proxy at the Cervus GP Meeting; and

(iv)

the Cervus GP Shareholders will be given a right to dissent on terms similar to Section 191 of the Business Corporation Act (Alberta), provided that such rights must be exercised not less than 48 hours prior to the Cervus GP Meeting.

2.3

Information Circulars and Meetings

(a)

As promptly as practical following the execution of this Agreement and in compliance with the Interim Order and Applicable Laws:

(i)

Cervus shall:

(A)

prepare the Cervus Information Circular and cause such circular to be mailed to Cervus Unitholders and filed with applicable regulatory authorities and other governmental authorities in all jurisdictions where the same are required to be mailed and filed; and

(B)

convene the Cervus Meeting; and

(ii)

Vasogen shall:

(A)

prepare the Vasogen Information Circular and cause such circular to be mailed to the Vasogen Shareholders and filed with applicable regulatory authorities and other governmental authorities in all jurisdictions where the same are required to be mailed and filed; and

(B)

convene the Vasogen Meeting.

(iii)

Cervus GP shall:

(A)

prepare the Cervus GP Information Circular and cause such circular to be mailed to Cervus GP Shareholders and filed with applicable regulatory authorities and other governmental authorities in all jurisdictions where the same are required to be mailed and filed; and

(B)

convene the Cervus GP Meeting.

2.4

Effective Date

3.1

Covenants of Cervus and Cervus GP

(a)

Cervus and Cervus GP will not take any action that could reasonably be expected to preclude, delay or have an adverse effect on the Arrangement or would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect;

(b)

Cervus and Cervus GP will promptly disclose in writing to Vasogen any Material Adverse Change which may reasonably be expected to preclude, delay or have an adverse effect on the Arrangement or on the ability of either Cervus or Cervus GP to consummate the Arrangement, or any change in any representation or warranty provided by Cervus or Cervus GP in this Agreement which change is or may be of such a nature to render any representation or warranty misleading or untrue in any material respect and Cervus and Cervus GP shall in good faith discuss with Vasogen any change in circumstances (actual, anticipated, contemplated, or to the knowledge of Cervus or Cervus GP, threatened) which is of such a nature that there may be a reasonable question as to whether disclosure in writing need to be given to Vasogen pursuant to this provision;

(c)

Cervus will ensure that it has available funds, whether under its lines of credit or other bank facilities or otherwise, to permit (i) the payment of the maximum amount which may be required by Section 7.3, having regard to its other liabilities and obligations and (ii) funding of the interest bearing loan to Vasogen as evidenced by the Cervus Loan Promissory Note (as defined in the Plan of Arrangement), and shall take all such actions as may be necessary to ensure that it maintains such availability to ensure that it is able to pay such amounts if required;

(d)

Cervus and Cervus GP will use their reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in Sections 5.1 and 5.3 as soon as reasonably possible following execution of this Agreement to the extent that the satisfaction of the same is within the control of Cervus or Cervus GP (provided that neither Cervus nor Cervus GP shall be obligated to take, or cause to be taken, any action or do, or cause to be done, any other thing with respect to the transactions contemplated in the Arrangement between New Vasogen and its Subsidiaries and the IPC Parties);

(e)

Cervus and Cervus GP will provide notice to Vasogen and the IPC Parties of the Cervus Meeting and the Cervus GP Meeting and allow Vasogen's and the IPC Parties’ representatives to attend such meetings;

(f)

Subject to compliance by Vasogen with Section 3.2(k), Cervus and Cervus GP will ensure that the Cervus Information Circular and the Cervus GP Information Circular provides the Cervus Unitholders and the Cervus GP Shareholders, respectively, with information required by Applicable Law, and will set out the Vasogen Information in such information circulars in the form approved by Vasogen and shall include or incorporate by reference, without limitation: (i) any financial statements in respect of prior acquisitions made by it that are required to be included therein in accordance with Applicable Laws, and (ii) the determination of the Cervus Board of Directors that the Arrangement is fair to the Cervus Unitholders and the Cervus GP Shareholders and is in the best interests of Cervus, the Cervus Unitholders, Cervus GP and the Cervus GP Shareholders and include the unanimous recommendation of the Cervus Board of Directors that the Cervus Unitholders and the Cervus GP Shareholders vote in favour of the Cervus Resolution and the Cervus GP Resolution, as applicable; provided that, for greater certainty, the Cervus Board of Directors shall only be entitled to withdraw, modify or change the recommendation regarding the Arrangement in response to an Alternative Proposal where Cervus has complied with the provisions of Section 3.4 and 7.2;

(g)

Cervus and Cervus GP will assist Vasogen in the preparation of the Vasogen Information Circular and provide to Vasogen, in a timely and expeditious manner, all Cervus Information and Cervus GP Information for inclusion in the Vasogen Information Circular and any amendments or supplements thereto, in each case complying in all material respects with all applicable legal requirements on the date of issue thereof and, in particular, to enable Vasogen to meet the standard in Item 14 of form 51-102F5 to National Instrument 51-102 - Continuous Disclosure Obligations, including without limitation, required financial statements and any associated audit reports, review engagement reports and auditor consents;

(h)

except for proxies and other non-substantive communications with securityholders, Cervus and Cervus GP will furnish promptly to Vasogen or Vasogen's counsel and the IPC Parties or their counsel, a copy of each notice, report, schedule or other document delivered, filed or received by Cervus or Cervus GP in connection with: (i) the Arrangement; (ii) the Cervus Meeting or the Cervus GP Meeting; (iii) any filings under Applicable Laws in connection with the transactions contemplated hereby; and (iv) any dealings with Governmental Entities in connection with the transactions contemplated hereby;

(i)

Cervus will solicit proxies to be voted at the Cervus Meeting in favour of matters to be considered at the Cervus Meeting, including the Cervus Resolution and Cervus GP will solicit proxies to be voted at the Cervus GP Meeting in favour of matters to be considered at the Cervus GP Meeting, including the Cervus GP Resolution;

(j)

Cervus will conduct the Cervus Meeting in accordance with the Cervus LP Agreement and any instrument governing the Cervus Meeting (including, without limitation, the Interim Order) as applicable, and as otherwise required by Applicable Laws and Cervus GP will conduct the Cervus GP Meeting in accordance with its articles and by-laws and any instrument governing the Cervus GP Meeting (including, without limitation, the Interim Order), as applicable, and as otherwise required by Applicable Laws;

(k)

Cervus and Cervus GP will make all necessary filings and applications under Applicable Laws required to be made on the part of Cervus and Cervus GP, as applicable, in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in compliance with such Applicable Laws;

(l)

Cervus will promptly advise Vasogen and the IPC Parties of the number of Cervus Units for which Cervus receives notices of dissent, if any and if dissent rights are provided pursuant to the Interim Order or written objections to the Arrangement and provide Vasogen and the IPC Parties with copies of such notices and written objections and Cervus GP will promptly advise Vasogen of the number of Cervus GP Shares for which Cervus GP receives notices of dissent or written objections to the Arrangement; and

(m)

To the extent necessary to complete the Arrangement pursuant to the provisions of the CBCA, Cervus and Cervus GP will use their reasonable commercial efforts to obtain the approval of the Cervus GP Shareholders to a continuance of Cervus GP under the provisions of the CBCA before the date the Final Order is obtained and, assuming such approval is received, to use their reasonable commercial efforts to cause Cervus GP to be continued under the provisions of the CBCA before the date the Final Order is obtained.

3.2

Covenants of Vasogen

(a)

Vasogen will not (except to the extent currently contemplated in any of the IPC Agreements that are currently reflected in the Arrangement, in the order currently contemplated in the Arrangement, and with respect thereto only to the extent and in a manner consistent with the Arrangement and not inconsistent with Vasogen’s obligations to Cervus and Cervus GP under this Agreement, provided any action or matter related thereto does not result in any material impairment of, or materially adversely affect Cervus under this Agreement, or the completion, of the Arrangement, to the extent that it relates to Cervus): (i) amend its constating documents; (ii) split, combine or reclassify any of its common shares; (iii) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or reorganization of Vasogen; (iv) reorganize, amalgamate, merge or otherwise combine Vasogen with any other Person; or (v) enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing; except, in each case, to the extent that such action or matter would not preclude, delay or have an adverse effect on, the Arrangement;

(b)

Vasogen will not: (i) declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of the outstanding Vasogen Shares; (ii) issue, grant, sell or pledge any Vasogen Shares or other securities of Vasogen, including, without limitation, securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Vasogen Shares (other than the issuance of Vasogen Shares on the exercise of currently outstanding Vasogen Rights); (iii) redeem, purchase or otherwise acquire any of the outstanding Vasogen Shares or other securities; or (iv) enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing; except, in each case, (A) to the extent that such action or matter would not preclude, delay or have an adverse effect on, the Arrangement; or (B) as currently contemplated in any of the IPC Agreements that are currently reflected in the Arrangement, in the order currently contemplated in the Arrangement, and with respect thereto only to the extent and in a manner consistent with the Arrangement and not inconsistent with Vasogen’s obligations to Cervus and Cervus GP under this Agreement, provided any action or matter related thereto does not result in any material impairment of, or materially adversely affect (A) the benefit to Cervus, or the completion, of the Arrangement, to the extent that it relates to Cervus;

(c)

Vasogen will not: (i) acquire (whether by consolidation or acquisition of shares or assets or otherwise) any corporation, trust, partnership or other business organization or division thereof, which is not a Subsidiary or affiliate of Vasogen, or make any investment therein either by purchase of shares or securities, contributions of capital or property transfer; (ii) incur any indebtedness for borrowed money that is not repaid prior to Closing or incur any other material liability or obligation; (iii) issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other individual or entity; (iv) enter into any ▇▇▇▇▇▇, swaps or other financial instruments or like transactions; (v) enter into any material contract; or (vi) authorize or propose any of the foregoing, or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing; except: (A) with the consent of Cervus, not to be unreasonably withheld; (B) as contemplated in any of the IPC Agreements that are currently reflected in the Arrangement, in the order currently contemplated in the Arrangement, and with respect thereto only to the extent and in a manner consistent with the Arrangement and not inconsistent with Vasogen’s obligations to Cervus under this Agreement, provided any action or matter related thereto does not preclude or delay the Arrangement or does not result in any material impairment of, or materially adversely affect Cervus under this Agreement or the completion of the Arrangement to the extent that it relates to Cervus if in connection with any such action or matter Vasogen obtains contractual covenants by the counterparty or counterparties which allow it to assign any and all rights and obligations it acquires or assumes as a result of such transaction to Vasogen Subco without consent of the counterparty or counterparties and which provides that there is no further recourse to Vasogen in respect of any such obligations after such assignment (and such rights and obligations are assigned to Vasogen Subco at the Effective Time under the Divestiture Agreement);

(d)

Vasogen will not take any action that could reasonably be expected to preclude, delay or have an adverse effect on the Arrangement or would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect;

(e)

Vasogen will promptly disclose in writing to Cervus any Material Adverse Change or any change in any representation or warranty provided by Vasogen in this Agreement which change is or may be of such a nature to render any representation or warranty misleading or untrue in any material respect and Vasogen shall in good faith discuss with Cervus any change in circumstances (actual, anticipated, contemplated, or to the knowledge of Vasogen, threatened) which is of such a nature that there may be a reasonable question as to whether disclosure in writing need to be given to Cervus pursuant to this provision;

(f)

Vasogen will ensure that it has available funds, whether under its lines of credit or other bank facilities or otherwise, to permit the payment of the maximum amount which may be required by Section 7.3 having regard to its other liabilities and obligations, and shall take all such actions as may be necessary to ensure that it maintains such availability to ensure that it is able to pay such amount if required;

(g)

Vasogen will use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in Sections 5.1 and 5.2 as soon as reasonably possible following execution of this Agreement to the extent that the satisfaction of the same is within the control of Vasogen;

(h)

in seeking any consents to complete the transactions contemplated by the Divestiture Agreement, Vasogen will use its reasonable commercial efforts to obtain a release from such counterparties of any of Vasogen's obligations and liabilities which are to be assigned to or assumed by Vasogen Subco from such counterparties, such release to be effective at the Effective Time;

(i)

Vasogen will provide notice to Cervus of the Vasogen Meeting and allow Cervus' representatives to attend such meeting;

(j)

subject to compliance by Cervus and Cervus GP with Section 3.1(g), Vasogen will ensure that the Vasogen Information Circular provides Vasogen Shareholders with information required by Applicable Laws, and will set out the Cervus Information and the Cervus GP Information in the Vasogen Information Circular in the form approved by Cervus and Cervus GP and shall include or incorporate by reference, without limitation: (i) any financial statements in respect of prior acquisitions made by it that are required to be included therein in accordance with Applicable Laws, and (ii) the determination of the Vasogen Board of Directors that the Arrangement is in the best interests of Vasogen and Vasogen Shareholders, and include the unanimous recommendation of the Vasogen Board of Directors that the Vasogen Shareholders vote in favour of the Arrangement Resolution; provided that, for greater certainty, the Vasogen Board of Directors shall only be entitled to withdraw, modify or change the recommendation regarding the Arrangement in response to an Alternative Proposal where Vasogen has complied with the provisions of Section 3.4 and 7.2;

(k)

Vasogen will assist Cervus and Cervus GP in the preparation of the Cervus Information Circular and the Cervus GP Information Circular and provide to Cervus and Cervus GP, in a timely and expeditious manner, all Vasogen Information for inclusion in the Cervus Information Circular and any amendments or supplements thereto, and in the Cervus GP Information Circular and any amendments or supplements thereto, in each case complying in all material respects with all applicable legal requirements on the date of issue thereof and, in particular, to enable Cervus to meet the standard in Item 14 of form 51-102F5 to National Instrument 51-102 - Continuous Disclosure Obligations, including without limitation, required financial statements and any associated audit reports, review engagement reports and auditor consents and to enable Cervus GP to comply with all Applicable Laws;

(l)

except for proxies and other non-substantive communications with securityholders, Vasogen will furnish promptly to Cervus or Cervus' counsel, a copy of each notice, report, schedule or other document delivered, filed or received by Vasogen in connection with: (i) the Arrangement; (ii) the Vasogen Meeting; (iii) any filings under Applicable Laws in connection with the transactions contemplated hereby; and (iv) any dealings with Governmental Entities in connection with the transactions contemplated hereby;

(m)

Vasogen will solicit proxies to be voted at the Vasogen Meeting in favour of matters to be considered at the Vasogen Meeting, including the Vasogen Resolution;

(n)

Vasogen will conduct the Vasogen Meeting in accordance with its articles and by-laws and any instrument governing the Vasogen Meeting (including, without limitation, the Interim Order), as applicable, and as otherwise required by Applicable Laws;

(o)

Vasogen will make all necessary filings and applications under Applicable Laws, required to be made on the part of Vasogen in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in compliance with such Applicable Laws;

(p)

Vasogen will, within 24 hours of Vasogen receiving from a taxing authority any audit inquiry, assessment, reassessment, confirmation or variation of an assessment, indication that a tax assessment or reassessment is being considered or is pending, request for filing of a waiver or extension of time or any other notice in writing related to Taxes (an "Assessment"), deliver to Cervus a copy thereof together with a statement setting out, to the extent then determinable, an estimate of the obligations, if any, of Vasogen on the assumption that the Assessment is valid;

(q)

Vasogen shall ensure that except in the ordinary course in a manner consistent with current practice, each of VIL and VUS will not engage in any business activity provided that this will not restrict Vasogen in requiring its Subsidiaries from undertaking such actions as may be required hereunder; and

(r)

Vasogen will promptly advise Cervus of the number of Vasogen Shares for which Vasogen receives notices of dissent or written objections to the Arrangement.

3.3

Mutual Covenants Regarding the Arrangement

(a)

to obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases and other contracts;

(b)

to obtain all necessary consents, assignments, waivers and amendments to or terminations of any instruments and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated hereby;

(c)

to prepare and deliver all documents and take all actions required to implement the Arrangement at the Effective Time including, the assignment by Vasogen of all of its assets and the assumption of all of its liabilities to Vasogen Subco, the transfer of the Cervus Units to Vasogen for Vasogen Shares, the transfer of the Cervus GP Shares to Vasogen for Vasogen Shares and the other transactions contemplated in the Plan of Arrangement;

(d)

to effect all necessary registrations and filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the Arrangement, and each of Cervus, Cervus GP and Vasogen will use its reasonable commercial efforts to cooperate with the others in connection with the performance by the others of their obligations under this Section 3.3 including, without limitation, continuing to provide reasonable access to information and to maintain ongoing communications as between officers of Cervus GP and Vasogen;

(e)

reasonably cooperate with the Other Party and its tax advisors in structuring the Arrangement in a tax effective manner (including, in respect of Vasogen, providing the Other Party with access to its Books and Records), and in particular, in a manner to better ensure the Tax Pools set forth in the Disclosure Letter of Vasogen are available for use by Vasogen after the Effective Time, and assist the Other Party and its tax advisors in making such investigations and inquiries with respect to such Party in that regard, as the Other Party and its tax advisors shall consider necessary, acting reasonably, provided that such Party shall not be obligated to consent or agree to any structuring that, in its opinion, acting reasonably: (i) would require it to obtain approval of its securityholders other than at the Vasogen Meeting or the Cervus Meeting or the Cervus GP Meeting, as the case may be; (ii) would prejudice its securityholders; (iii) would prevent, delay or have an adverse effect on the Arrangement; (iv) would have an adverse effect on the benefits to be received under the Arrangement by such Party or any of its securityholders, or (v) would be inconsistent with the remaining terms and conditions of this Agreement;

(f)

reasonably cooperate and consult with the Other Party and its tax advisors on the preparation of the information for the Tax Return of Vasogen for the year ended November 30, 2008 (including, in respect of Vasogen, providing the Other Party with access to its Books and Records) and in particular, in a manner to better ensure the Tax Pools set forth in the Disclosure Letter are available for use by Vasogen after the Effective Time and assist the Other Party and its tax advisors in making such investigations and inquiries with respect to such Party in that regard, as the Other Party and its tax advisors shall consider necessary, acting reasonably, and shall cause the Tax Return of Vasogen for the year ended November 30, 2008 to be filed prior to the Effective Date;

(g)

use their reasonable commercial efforts to cause the mailing of each of the Cervus Information Circular, the Cervus GP Information Circular and Vasogen Information Circular to their respective securityholders, as applicable, to occur on or about September 15, 2009 or, if the mailing is not completed by that date, then as soon as reasonably practicable following that date and in any event not later than September 30, 2009; and

(h)

to obtain and maintain the Vasogen Required Approvals and Cervus Required Approvals which must be obtained from third parties and Governmental Entities, including making as promptly as practicable all filings and submissions that are required or are otherwise advisable in order to obtain such approvals and will reasonably cooperate with each other in the preparation of such filings and submissions and the provision of any supplemental information that may be requested or required by Governmental Entities including (i) providing each other with drafts of documentation for review and reasonable comment prior to submission with Governmental Entities and (ii) keeping each other informed as to developments regarding the obtaining of such regulatory approvals.

3.4

Acquisition Proposal

(a)

Each Party shall immediately cease and cause to be terminated all existing discussions and negotiations (including, without limitation, through any advisors or other parties on its behalf), if any, with any parties conducted before the date of this Agreement with respect to any Acquisition Proposal and shall immediately terminate access to and 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 and shall use all reasonable commercial efforts to ensure that such requests are honoured (provided however this will in no way restrict Vasogen from taking such action as may be required in order to satisfy its requirements under the IPC Agreements and with respect thereto only to the extent and in a manner consistent with the Arrangement and not inconsistent with Vasogen’s obligations to Cervus and Cervus GP under this Agreement, provided any action or matter related thereto does not result in any material impairment of, or materially adversely affect Cervus under this Agreement, or the completion, of the Arrangement to the extent that it relates to Cervus).

(b)

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:

(i)

solicit, facilitate, initiate or encourage any Acquisition Proposal;

(ii)

enter into or participate in any discussions or negotiations regarding an Acquisition Proposal, 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 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;

(iii)

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, including, without limitation, any "standstill provisions" thereunder; or

(iv)

accept, recommend, approve or enter into an agreement to implement an Acquisition Proposal;

(v)

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 this Agreement, by such Party or any of its officers, directors 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 or a transaction that would constitute an Acquisition Proposal but for the fact that such transaction does not preclude, delay or have an adverse effect on, the Arrangement) has made a written bona fide Material Acquisition Proposal which the Vasogen Board of Directors or Cervus Board of Directors, as the case may be, determines in good faith that funds or other consideration necessary for the Material Acquisition Proposal are likely to be available (an "Alternative Proposal") and, subject to execution of a confidentiality agreement with a standstill covenant that prevents such third party from making an Acquisition Proposal without the written consent of the Vasogen Board of Directors or Cervus Board of Directors, 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:

(A)

the Vasogen Board of Directors or Cervus Board of Directors, as the case may be, has received the advice of outside counsel that 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

(B)

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 tchird 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

(vi)

accept, recommend, approve or enter into an agreement to implement an Alternative Proposal, if the Vasogen Board of Directors or Cervus Board of Directors, 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 forth in Section 3.4(c) and terminates this Agreement in accordance with Section 7.1(a) and concurrently therewith pays the amount required by Section 7.3 to the Other Party.

(c)

Each Party in receipt of an Alternative Proposal (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 of Directors or Cervus Board of Directors, as the case may be, to accept, recommend, approve or enter into an agreement to implement an Alternative Proposal, which notice shall confirm that the Vasogen Board of Directors or Cervus Board of Directors, as the case may be, of the Receiving Party has determined that such Acquisition Proposal constitutes an Alternative Proposal, shall identify the third party making the Alternative Proposal 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 and not to release the third party making the Alternative Proposal from any standstill provisions and shall not withdraw, redefine, modify or change its recommendation in respect of the Arrangement.

(d)

Each Party agrees that all information that may be provided to it by the Other Party with respect to any Alternative Proposal pursuant to this Section 3.4 shall be confidential and shall not be disclosed or used except in order to enforce its rights under this Agreement in legal proceedings.

(e)

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 provisions of this Section 3.4. Cervus shall be responsible for any breach of this Section 3.4 by Cervus GP’s officers, directors, employees, investment bankers, advisers or representatives, and Vasogen shall be responsible for any breach of this Section 3.4 by its officers, directors, employees, investment bankers, advisers or representatives.

3.5

Provision of Information; Access

(a)

From and after the date hereof, Vasogen shall provide Cervus and its representatives access, during normal business hours and at such other time or times as Cervus may reasonably request, to its premises, books, contracts, records, computer systems, properties, employees and management personnel and shall furnish promptly to Cervus all information concerning its business, properties and personnel as Cervus may reasonably request in the context of completing the Arrangement.

(b)

From and after the date hereof, Cervus shall provide Vasogen and its representatives access, during normal business hours and at such other time or times as Vasogen may reasonably request, to its premises, books, contracts, records, computer systems, properties, employees and management personnel and shall furnish promptly to Vasogen all information concerning its business, properties and personnel as Vasogen may reasonably request in the context of completing the Arrangement.

4.1

Representations and Warranties of Cervus

(a)

Organization and Qualification. Cervus has been duly formed and is validly existing under the laws of the Province of Alberta and has the requisite power and authority to own its assets and to carry on its business as now conducted. Copies of the constating documents of Cervus (including the Cervus LP Agreement) and Cervus GP made available to Vasogen, together with all amendments to date, are accurate and complete in all material respects of the date hereof and have not been amended or superceded.

(b)

General Partner. Cervus GP (i) is the sole general partner of Cervus, (ii) has been duly appointed as the general partner of Cervus, (iii) is authorized to execute agreements for and on behalf of Cervus, (iv) has full corporate power and capacity to act as general partner of Cervus; and (v) has the power and authority to bind Cervus to this Agreement and all other agreements required in connection with the Arrangement pursuant to the terms and conditions of the Cervus LP Agreement. Further, Cervus GP is (i) a corporation incorporated under the laws of the Province of Alberta and is validly existing under the laws of the Province of Alberta; and (ii) has the corporate power to own property and assets, carry on business, act as general partner of Cervus and enter into and perform its obligations under the Cervus LP Agreement and this Agreement.

(c)

Authority Relative to this Agreement. Each of Cervus, via Cervus GP, and Cervus GP has the requisite power and authority to execute this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement has been duly authorized by the Cervus Board of Directors and no other proceedings on the part of either Cervus or Cervus GP are necessary to authorize this Agreement. This Agreement has been duly executed and delivered by each of Cervus, via Cervus GP, and Cervus GP and constitutes a legal, valid and binding obligation of each of Cervus and Cervus GP enforceable against it in accordance with its terms, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application relating to or affecting rights of creditors and that equitable remedies, including specific performance, are discretionary and may not be ordered.

(d)

No Violations. Except as contemplated by this Agreement, other than in connection with or in compliance with the provisions of Applicable Laws or which are required to be filed post Arrangement: i) there is no legal impediment to either Cervus' or Cervus GP’s consummation of the Arrangement; and ii) no filing or registration with, or authorization, consent or approval of, any domestic or foreign public body or authority is required of either Cervus or Cervus GP in connection with the consummation of the Arrangement, except for such filings or registrations which, if not made, or for such authorizations, consents or approvals which, if not received, would not have a Material Adverse Effect which may reasonably be expected to preclude, delay or have an adverse effect on the Arrangement or on the ability of either Cervus or Cervus GP to consummate the Arrangement.

(e)

Board Approval. The Cervus Board of Directors has approved the Arrangement and approved this Agreement, has determined that the Arrangement and this Agreement are in the best interests of Cervus and the Cervus Unitholders, and of Cervus GP and the Cervus GP Shareholders, and has unanimously determined that the Arrangement is fair to the Cervus Unitholders and the Cervus GP Shareholders and has resolved to unanimously recommend approval of the Cervus Resolution by the Cervus Unitholders and of the Cervus GP Resolution by the Cervus GP Shareholders.

(f)

Litigation. There are no actions, suits or proceedings in existence or pending or, to the knowledge of Cervus or Cervus GP, threatened or for which there is a reasonable basis, affecting or that would affect Cervus or Cervus GP at law or in equity or before or by any court or Governmental Entity which action, suit or proceeding involves a possibility of any judgment against or liability of Cervus or Cervus GP which, if successful would have a Material Adverse Effect which may reasonably be expected to preclude, delay or have an adverse effect on the Arrangement or which would adversely affect the ability of either Cervus or Cervus GP to consummate the Arrangement.

(g)

Funds Available. The aggregate cash to be loaned by Cervus to Vasogen pursuant to the Arrangement is available to Cervus and will be available at the Effective Time so that Cervus will be able to make such loan in accordance with the terms of the Plan of Arrangement.

(h)

Reporting Issuer Status. Cervus is a reporting issuer in British Columbia and Alberta and in no other province or territory. Cervus is in material compliance with all applicable Canadian Securities Laws and the rules and policies of the TSXV. Cervus GP is not a reporting issuer in any province or territory.

(i)

Disclosure. To the knowledge of Cervus, Cervus has not withheld from Vasogen any material information that would reasonably be expected to disclose that either Cervus or Cervus GP is unable to complete all or any material part of the transactions contemplated as part of the Arrangement.

4.2

Representations and Warranties of Vasogen

(a)

Organization and Qualification. Vasogen is a corporation duly incorporated or amalgamated and validly existing under the Laws of its jurisdiction of incorporation and has the requisite corporate power and authority to own its assets as now owned and to carry on its business as now conducted. Copies of the constating documents of Vasogen and any material contracts of Vasogen made available to Cervus, together with all amendments to date, are accurate and complete in all material respects as of the date hereof and have not been amended or superseded.

(b)

Authority Relative to this Agreement. Vasogen has the requisite corporate power and authority to execute this Agreement carry out its obligations hereunder. The execution and delivery of this Agreement has been duly authorized by the Vasogen Board of Directors and no other proceedings on the part of Vasogen are necessary to authorize this Agreement. This Agreement has been duly executed and delivered by Vasogen and constitutes a legal, valid and binding obligation of Vasogen enforceable against it in accordance with its terms, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, reorganization or other Laws of general application relating to or affecting rights of creditors and that equitable remedies, including specific performance, are discretionary and may not be ordered.

(c)

No Violations. Except as contemplated by this Agreement, other than in connection with or in compliance with the provisions of Applicable Laws or which are required to be filed post Arrangement: (i) there is no legal impediment to Vasogen's consummation of the Arrangement; and (ii) no filing or registration with, or authorization, consent or approval of, any domestic or foreign public body or authority is required of Vasogen in connection with the consummation of the Arrangement, except for such filings or registrations which, if not made, or for such authorizations, consents or approvals which, if not received, would not have a Material Adverse Effect.

(d)

Board Approval. The Vasogen Board of Directors has approved the Arrangement and approved this Agreement, has determined that the Arrangement and this Agreement are in the best interests of Vasogen and the Vasogen Shareholders, and has determined that the Arrangement is fair to Vasogen Shareholders and has resolved to recommend approval of the Arrangement Resolution by Vasogen Shareholders.

(e)

Litigation. Except as listed in Section 4.2(e) of the Disclosure Letter, there are no actions, suits or proceedings in existence or pending or, to the knowledge of Vasogen, threatened or for which there is a reasonable basis, affecting or that would affect Vasogen at law or in equity or before or by any court or Governmental Entity which action, suit or proceeding involves a possibility of any judgment against or liability of Vasogen which, if successful, would have a Material Adverse Effect.

(f)

Reporting Issuer Status. Vasogen is a reporting issuer (where such concept exists) in all provinces and territories of Canada. The Vasogen Shares are registered pursuant to Section 12 of the U.S. Exchange Act. Except as listed in Section 4.2(f) of the Disclosure Letter, Vasogen is in material compliance with all applicable Canadian Securities Laws, U.S. Securities Laws (including the Sarbanes Oxley Act of 2002), and the rules and policies of each of the TSX and NASDAQ.

(g)

Capitalization. As of the date hereof, the authorized capital of Vasogen consists of an unlimited number of Vasogen Shares. As of July 31, 2009, there were issued and outstanding 22,623,195 Vasogen Shares and an aggregate of up to 8,514,495 Vasogen Shares were issuable pursuant to the Vasogen Rights (of which up 7,094,973 Vasogen Shares were issuable upon exercise of the Vasogen Warrants). Except as set forth in this Agreement, there are no options, warrants or other rights, agreements or commitments of any character whatsoever requiring the issuance, sale or transfer by Vasogen of any securities of Vasogen (including Vasogen Shares) or any securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any securities of Vasogen (including Vasogen Shares). All outstanding Vasogen Shares have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to, nor were they issued in violation of, any preemptive rights.

(h)

Financial Statements. As of their respective dates, the Vasogen Financial Statements did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading and complied in all material respects with all Applicable Laws. The Vasogen Financial Statements were prepared in accordance with GAAP (except (x) as otherwise indicated in such financial statements and the notes thereto or, in the case of audited statements, in the related report of Vasogen's independent auditors or (y) in the case of unaudited interim statements, to the extent they may not include footnotes, are subject to normal year end adjustments or may be condensed or subject to summary statements), and present fairly in all material respects in accordance with GAAP the consolidated financial position, results of operations and changes in financial position of Vasogen on a consolidated basis as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments) and reflect appropriate and adequate reserves in all material respects in respect of contingent liabilities, if any, of Vasogen on a consolidated basis.

(i)

Absence of Liabilities. Vasogen will, after Closing, not have any have any debts, liabilities, commitments or obligations of any nature (whether matured or unmatured, accrued, fixed, contingent or otherwise) of any kind whatsoever that is material to Vasogen resulting from any matters, actions, events, facts or circumstances related to the activities, affairs or business of Vasogen which occurred prior to Closing, 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 the 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 Person; (ii) Claims relating to Taxes of Vasogen for any period of time prior to Closing; (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 the Cervus Information Circular, for any period of time prior to Closing; (iv) any violation by Vasogen of Applicable Laws, including without limitation applicable Canadian Securities Laws or U.S. Securities Laws, that occurred prior to Closing; (v) any failure by Vasogen to comply with the terms 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 or its constating documents; (v) Claims relating to the operation, performance, warranty, maintenance, service, malfunction or liability of Vasogen's products prior to Closing; (vii) Claims relating to Vasogen's non-compliance with workers' compensation legislation, including without limitation, premiums in Canada or the United States; (viii) Claims relating to personal injuries or property damage caused by Vasogen; or (ix) Claims relating to Vasogen's violation of Environmental Laws or the release of Hazardous Substances; except, in each case; or (x) as has been assumed by Vasogen Subco and is the subject of the trust conditions of the Divestiture Agreement.

(j)

Disclosure. To the knowledge of Vasogen, Vasogen has not withheld from Cervus any material information or documents concerning Vasogen or its Subsidiaries (i) concerning the Tax Pools set out in the Disclosure Letter or (ii) that would reasonably be expected to disclose that a Material Adverse Change in respect of Vasogen had occurred after May 30, 2009.

(k)

No Material Adverse Change. Since November 30, 2008, other than as disclosed in the Public Record, there has not been any Material Adverse Change in respect of Vasogen.

(l)

Tax Representations:

(i)

Place of Principal Offices. The principal office of Vasogen is not located within the United States;

(ii)

Investment Company. Vasogen is not an "investment company" within the meaning of the United States Investment Company Act of 1940, as amended;

(iii)

Tax Returns. With the exception of the Canadian federal and provincial tax returns for the taxation year ended November 30, 2008, Vasogen has duly and timely filed in the prescribed manner and within the prescribed time with all appropriate Governmental Entities all Tax Returns that it is required to file in respect of any Taxes in respect of any provision in applicable tax legislation, for all fiscal and other reporting periods ending prior to the date hereof, and all of which are, to the best of Vasogen's knowledge, true, correct and complete in all material respects;

(iv)

Sales Tax. Vasogen has complied with all registration, reporting, collection and remittance requirements in respect of all federal and provincial sales tax legislation including but not limited to the Excise Tax Act (Canada);

(v)

Tax Information. Vasogen has provided to Cervus copies of all tax related materials requested by Cervus, including Tax Returns, electronic copies of the general ledger and copies of legal entity financial statements, elections, designations, audit undertakings, notices of determination of loss, all working papers, calculations and schedules relating thereto, together with all communications relating thereto from any Governmental Entities and the response, if any, from Vasogen to such communications;

(vi)

Assessments or Reassessments. (A) There are no assessments or reassessments of any Taxes that have been issued and are outstanding pursuant to which there are any material amounts owing; (B) Vasogen is not negotiating any draft assessment or reassessment with any Governmental Entity; (C) except as set out in the Disclosure Letter, Vasogen is not aware of any contingent liabilities for Taxes or any grounds for an assessment or reassessment including, without limitation, aggressive treatment of income, expenses, deductions, credits or other claims for deduction or credit under any Tax Returns; and (D) Vasogen has not received any indication from any Governmental Entity that an assessment or reassessment is proposed in respect of any Taxes, regardless of its merits. Vasogen has not executed or filed with any Governmental Entity any agreement extending the period for the filing of any Tax Returns or for the assessment, reassessment or collection of any Taxes. No Governmental Entity has challenged or disputed the tax account balances set forth in the Disclosure Letter with Vasogen;

(vii)

Acquisition of Control. Based on the generally accepted interpretation of the ITA as of the date hereof, during the period commencing December 1, 1998 and ending immediately prior to the date hereof, there has not been any "acquisition of control" of Vasogen, as that term is used for purposes of the ITA; and

(viii)

Residency. Vasogen is and has been since its inception, resident in Canada and a "taxable Canadian corporation", both for purposes of the ITA.

5.1

Mutual Conditions Precedent

(a)

the Interim Order: i) shall have been granted in form and substance satisfactory to each of Cervus, Cervus GP and Vasogen, acting reasonably; ii) shall provide that the obligation to comply with any dissent rights granted to Vasogen Shareholders 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 Cervus, Cervus GP and Vasogen, acting reasonably, on appeal or otherwise;

(b)

the Arrangement Resolutions shall have been passed by the requisite majorities specified in the Interim Order and in form and substance satisfactory to each of Cervus, Cervus GP and Vasogen, acting reasonably;

(c)

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

(d)

the Articles of Arrangement to be filed with the Director in accordance with the Arrangement shall be in form and substance satisfactory to each of Cervus, Cervus GP and Vasogen, 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 Law, nor any statute, rule, regulation or order which is enacted, enforced, promulgated or issued by any Governmental Entity, 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.

5.2

Additional Conditions to Obligations of Cervus and Cervus GP

(a)

except as affected by the transactions contemplated by this Agreement, the representations and warranties of Vasogen contained in Section 4.2 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 this 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 respective personal capacities, 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, not more than 5% of the outstanding Cervus Units shall have exercised rights of dissent in respect of the Arrangement that have not been withdrawn as of the Effective Date;

(c)

immediately prior to the Effective Time, the aggregate of the tax account balances in respect of the Tax Pools set out in the Disclosure Letter shall not be less than 95% of the amounts set out in the Disclosure Letter, and the applicable expiry horizons will not be materially different than as set out in the 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 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 terminated or transferred to Vasogen Subco or New Vasogen, whether pursuant to the Arrangement or otherwise; (iii) Vasogen will have no officers, employees or consultants other than those whose arrangement are being terminated or transferred to Vasogen Subco or New Vasogen in connection with the 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 to be transferred to Vasogen Subco or New Vasogen, whether pursuant to the Arrangement or otherwise) except for any benefits under run off directors’ and officer’s liability insurance maintained by Vasogen for the current and former directors and officers of Vasogen on terms and conditions that the current Vasogen Board reasonably determines;

(e)

there shall not have been after the date hereof and prior to the Effective Time any legislative enactment, promulgation, or public announcement of any change or proposed change in law (including a specific proposal to amend the ITA publicly announced by the Department of Finance of Canada) or applicable case law, or written and published interpretative guidance or policy of the Canada Revenue Agency or provincial equivalent that, in the opinion of Cervus acting reasonably, could be expected to result in any material impairment of, or materially adversely affect (i) the benefit to Cervus, or the completion, of the Arrangement, or (ii) the ability of Vasogen to utilize the Tax Pools referred to in the 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 ITA, with the exception of any "acquisition of control" that has occurred on or after the date hereof as a result of the execution of this 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 TSXV 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 an indemnity agreement indemnifying Vasogen in the form attached hereto as Exhibit "B";

(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.

5.3

Additional Conditions to Obligations of Vasogen

(a)

except as affected by the transactions contemplated by this Agreement, the representations and warranties of Cervus and Cervus GP contained in Section 4.1 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 Cervus shall have complied in all material respects with its covenants in this 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 the general partner of Cervus, and not in their personal capacity, 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 Arrangement that have not been withdrawn as of the Effective Date;

(d)

Vasogen shall have entered into an indemnity agreement indemnifying New Vasogen in the form attached hereto as Exhibit "B"; and

(e)

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

5.4

Notice and Effect of Failure to Comply with Conditions

(a)

Each of Cervus, Cervus GP and Vasogen shall give prompt notice to the others of the occurrence, or failure to occur, at any time from the date hereof to the Effective Date of any event or state of facts which occurrence or failure would, or would be likely to: (i) cause any of the representations or warranties of any Party contained herein to be untrue or inaccurate in any material respect, or (ii) result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder; provided, however, that no such notification will affect the representations or warranties of the Parties or the conditions to the obligations of the Parties hereunder.

(b)

Subject to the provisions of Section 7.2 and 7.3, if any of the conditions precedents set forth in Sections 5.1, 5.2 or 5.3 hereof shall not be complied with or waived by the Party or Parties for whose benefit such conditions are provided on or before the date required for the performance thereof, then a Party for whose benefit the condition precedent is provided may terminate this Agreement as provided in Section 7.1 hereof; provided that, prior to the filing of the Articles of Arrangement for the purpose of giving effect to the Arrangement, the Party intending to rely thereon has delivered a written notice to the Other Party, specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the non-fulfillment of the applicable conditions precedent. More than one such notice may be delivered by a Party.

5.5

Satisfaction of Conditions

6.1

Amendment

(a)

This Agreement (including the Plan of Arrangement) may at any time and from time to time before or after the holding of the Vasogen Meeting, the Cervus Meeting and Cervus GP Meeting be amended by written agreement of the Parties without, subject to Applicable Law, further notice to or authorization on the part of their respective securityholders and any such amendment may, without limitation:

(i)

change the time for performance of any of the obligations or acts of the Parties;

(ii)

waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;

(iii)

waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; or

(iv)

waive compliance with or modify any other conditions precedent contained herein;

(b)

If the transactions involving, or for the benefit of, New Vasogen or the IPC Parties that are currently contemplated in the IPC Agreements and that are currently reflected in the Arrangement, in the order set out in the Arrangement, are not capable of being completed on or before the Deadline, whether by failure of one of the parties to the IPC Agreements or otherwise, the Arrangement shall be amended to remove the transactions currently contemplated in sections 2.2(x) through to and including (ee) of the Plan of Arrangement and the remainder of the Plan of Arrangement shall be amended to make it consistent with the foregoing provision.

7.1

Termination

(a)

This Agreement may be terminated at any time prior to the Effective Time by mutual written consent of Cervus and Vasogen.

(b)

This Agreement may be terminated 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 required Vasogen 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 Arrangement or the transactions contemplated by this 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 in accordance with Section 3.4(b)(vi), provided that such Party has complied with its obligations set forth in Section 3.4(c) and concurrently therewith pays the Other Party the Termination Fee.

(c)

This Agreement may be terminated by Vasogen at any time prior to the Effective Time if Vasogen is not in material breach of its obligations under this 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 (i) would cause a default under Section 3.1 or the failure of the one of the conditions precedent in Section 5.1 or 5.3 to be satisfied and (ii) is incapable of being cured or, if curable, is not cured in accordance with Section 7.2.

(d)

This Agreement may be terminated 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 this 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 (i) would cause a default under Section 3.2 or the failure of the one of the conditions precedent in Section 5.1 or 5.2 to be satisfied and (ii) is incapable of being cured or, if curable, is not cured in accordance with Section 7.2.

7.2

Notice and Cure Provisions

(a)

Each Party will give prompt notice to the other of the occurrence, or failure to occur, at any time prior to the Effective Time of any event or state of facts which occurrence or failure would, or would be likely to:

(i)

cause any of the representations or warranties of any Party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Time; or

(ii)

result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder prior to the Effective Time.

(b)

Cervus may not exercise its right to terminate this Agreement pursuant to Section 7.1(d) and Vasogen may not exercise its right to terminate this Agreement pursuant to Section 7.1(c) unless the Party seeking to terminate the Agreement shall have delivered a written notice to the Other Party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the termination right. If any such notice is delivered, provided that the Other Party is proceeding diligently to cure such matter and such matter is capable of being cured on or prior to the Deadline, no Party may exercise such termination right until the earlier of (i) the Deadline, and (ii) the date that is fifteen (15) Business Days following receipt of such notice by the Other Party to whom the notice was delivered, if such matter has not been cured by such date. If such notice has been delivered prior to the date of the Cervus Meeting and/or the Vasogen Meeting, each such meeting, as applicable, shall, unless the Parties agree otherwise, be postponed or adjourned until the expiry of such period (without causing any breach of any other provision contained herein). If such notice has been delivered prior to the filing of the Articles of Arrangement, such filing shall be postponed until two (2) Business Days after the expiry of such period.

(c)

Each Party shall promptly notify the Other Party of (i) any communication from any person alleging that the consent of such person (or another person) is or may be required in connection with the transactions contemplated by this Agreement (and the response thereto from such Party, its subsidiaries or its representatives), (ii) any material communication from any Government Entity in connection with the transactions contemplated by this Agreement (and the response thereto from such Party, its subsidiaries or its representatives), and (iii) any material Claim threatened or commenced against or otherwise affecting such Party or any of its subsidiaries that are related to the transaction contemplated by the Agreement.

7.3

Termination Fee

(a)

if Vasogen terminates this Agreement pursuant to:

(i)

Section 7.1(b)(iii) (i.e. Cervus Resolution or Cervus GP Resolution not approved) or Section 7.1(c) (i.e. breach of Agreement by Cervus or Cervus GP), Cervus will pay, or cause to be paid, to Vasogen by wire transfer of immediately available funds an amount equal to the Termination Fee; or

(ii)

Section 7.1(b)(ii) (i.e. Vasogen Resolution not approved) or Section 7.1(b)(v) (i.e. Alternative Proposal), Vasogen will pay, or cause to be paid, to Cervus by wire transfer of immediately available funds an amount equal to the Termination Fee;

(b)

If Cervus terminates this Agreement pursuant to:

(i)

Section 7.1(b)(ii) (i.e. Vasogen Resolution not approved) or Section 7.1(d) (i.e. breach of Agreement by Vasogen), Vasogen will pay, or cause to be paid, to Cervus by wire transfer of immediately available funds an amount equal to the Termination Fee; or

(ii)

Section 7.1(b)(iii) (i.e. Cervus Resolution or Cervus GP Resolution not approved) or Section 7.1(b)(v) (i.e. Alternative Proposal), Cervus will pay, or cause to be paid, to Vasogen by wire transfer of immediately available funds an amount equal to the applicable Termination Fee.

7.4

Damages and Remedies

8.1

Confidentiality

(a)

Each Party will, and will cause its Subsidiaries and its and their directors, officers, employees and agents to, keep all information provided to it hereunder or in connection with the Arrangement (collectively, the "Confidential Information") confidential and will not use or disclose such Confidential Information to any Person except to the extent:

(i)

such use or disclosure is expressly permitted or contemplated pursuant to this Agreement or any agreement contemplated herein;

(ii)

such use or disclosure is strictly necessary to enable the recipient of such Confidential Information to exercise its rights and perform its obligations under this Agreement or any agreement contemplated in this Agreement;

(iii)

such use or disclosure is required by Applicable Laws;

(iv)

such information is in the public domain other than as a result of a breach of this Agreement or any agreement contemplated in this Agreement; or

(v)

such use or disclosure is required pursuant to a final order or judgment of a court of competent jurisdiction and in such case the Parties will cooperate with one another to obtain an appropriate protective order or other reliable assurance that the confidentiality of such Confidential Information will be maintained.

(b)

Each Party acknowledges that the Confidential Information of the Other Party consists in part of information vital to the business and commercial prospects of that Other Party and that such information is the special, valuable and unique property of that Other Party and would not normally be disclosed to it. Accordingly, each Party agrees to use all commercially reasonable efforts to protect such Confidential Information and keep it confidential using a standard of care no less than the degree of care that such Party would be reasonably expected to employ for its own similar Confidential Information. In particular, each Party has instructed and shall continue to instruct those employees or advisors responsible for processing Personal Information to protect the confidentiality of such information in a manner consistent with the Parties' obligations hereunder and has ensured and shall continue to ensure that access to the Personal Information shall be restricted to those employees or advisors of the respective Party who have a bona fide need to access such information in order to complete the Arrangement.

(c)

Neither Party has or hereafter shall use any Personal Information for any purposes other than those related to the performance of this Agreement and the completion of the Arrangement and each Party acknowledges and confirms that the disclosure of Personal Information is necessary for the purposes of determining if the Parties shall proceed with the Arrangement, and that any disclosure of Personal Information relates solely to the carrying on of the business and the completion of the Arrangement.

(d)

Each Party acknowledges and confirms that it has and shall continue to employ appropriate technology and procedures in accordance with Applicable Laws to prevent accidental loss or corruption of the Personal Information, unauthorized input or access to the Personal Information, or unauthorized or unlawful collection, storage, disclosure, recording, copying, alteration, removal, deletion, use or other processing of such Personal Information.

(e)

Each Party shall promptly notify the Other Party to this Agreement of all inquiries, complaints, requests for access, and claims of which the Party is made aware in connection with the Personal Information. The Parties shall fully co-operate with one another, with the persons to whom the Personal Information relates, and any authorized authority charged with enforcement of applicable privacy laws, in responding to such inquiries, complaints, requests for access, and claims.

(f)

Upon the expiry or termination of this Agreement, or otherwise upon the reasonable request of either Party, the Other Party shall forthwith cease all use of the Personal Information acquired by it in connection with this Agreement and will return to Other Party or, at the Other Party's request, destroy in a secure manner, the Personal Information (and any copies).

(g)

Without prejudice to any other rights or remedies, in the event of litigation relating to a breach of the provisions of this Article 8, if a court of competent jurisdiction determines in a final, non-appealable order that any of such provisions has been breached, the Party in breach will reimburse the Other Party for its costs and expenses (including reasonable legal fees and expenses) incurred in connection with all such litigation.

9.1

Notices

(a)

in the case of Cervus, to:

E-mail:

▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇

Attention: ▇▇▇▇▇ ▇▇▇▇▇, President and Chief Executive Officer

(b)

in the case of Vasogen, to:

(c)

in the case of Cervus GP Ltd., to:

E-mail:

▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇

Attention: ▇▇▇▇▇ ▇▇▇▇▇, President and Chief Executive Officer

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

10.1

Binding Effect

10.2

Assignment

10.3

Disclosure

10.4

Costs

10.5

Severability

(a)

the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and

(b)

the invalidity, illegality or unenforceability of any provision or part thereof contained in this Agreement in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Agreement in any other jurisdiction.

10.6

Further Assurances

10.7

Time of Essence

10.8

Governing Law

10.9

Waiver

10.10

Obligations

10.11

Facsimile and Counterparts

CERVUS LP, by its general partner Cervus GP Ltd.

VASOGEN INC.

Per:

(signed) “▇▇▇▇▇ ▇▇▇▇▇”

Per:

(signed) “▇▇▇▇▇ ▇▇▇▇▇▇▇”

▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer

▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive
Officer of Vasogen Inc.

Per:

(signed) “▇▇▇▇▇▇ ▇▇▇▇”

▇▇▇▇▇▇ ▇▇▇▇

VP Finance and Chief Financial Officer

CERVUS GP LTD.

Per:

(signed) “▇▇▇▇▇ ▇▇▇▇▇”

▇▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer

(i)

the Company, New Vasogen, Vasogen Subco, Cervus, Cervus GP, IPC Opco, IPC US, IPC Newco US, IPC Newco, IPC US Mergerco and Amalco,

(ii)

all holders of Cervus Deferred Units and Cervus Options,

(iii)

all holders of Vasogen Warrants, Vasogen Options and Vasogen DSUs,

(iv)

all holders of IPC US Options, and

(v)

all holders and beneficial owners of each of Vasogen Shares, Cervus Units, Cervus GP Shares, New Vasogen Shares, IPC Opco Shares, IPC US Shares, Amalco Shares, IPC Newco Shares and Vasogen Subco Shares

(i)

at the Effective Time, the Vasogen Shares held by Dissenting Vasogen Shareholders in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred without any further act or formality to the Company (free and clear of any Liens) and:

(i)

such Dissenting Shareholders shall cease to be the holders of such Vasogen Shares and to have any rights as holders of such Vasogen Shares other than the right to be paid fair value for such Vasogen Shares by New Vasogen (and not by the Company) as set out in Section 4.1 of this Plan of Arrangement;

(ii)

such Dissenting Shareholders’ names shall be removed as the holders of such Vasogen Shares from the registers of Vasogen Shares maintained by or on behalf of the Company; and

(iii)

the Company shall be deemed to be the transferee of such Vasogen Shares (free and clear of any Liens) and shall cancel such Vasogen Shares;

(ii)

one minute following the Effective Time, the Cervus GP Shares held by Dissenting Cervus GP Shareholders in respect of which Cervus Dissent Rights have been validly exercised shall be deemed to have been transferred without any further act or formality to Cervus GP (free and clear of any Liens) and:

(i)

such Dissenting Cervus GP Shareholders shall cease to be the holders of such Cervus GP Shares and to have any rights as holders of such Cervus GP Shares other than the right to be paid fair value for such Cervus GP Shares as set out in Section 4.3 of this Plan of Arrangement;

(ii)

such Dissenting Cervus GP Shareholders’ names shall be removed as the holders of such Cervus GP Shares from the registers of Cervus GP Shares maintained by or on behalf of Cervus GP; and

(iii)

Cervus GP shall be deemed to be the transferee of such Cervus GP Shares (free and clear of any Liens) and shall cancel such Cervus GP Shares;

(iii)

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 herein all as may be reflected in a further amended and restated Cervus LP Agreement to be dated as of the Effective Date;

(iv)

three minutes following the Effective Time, the Company shall transfer, assign and convey (the “Transfer”) the Divested Assets to Vasogen Subco and, in consideration thereof, Vasogen Subco shall assume (the “Assumption”) the Transferred Liabilities as well as issue to the Company of 100 fully paid and non-assessable Vasogen Subco Shares, all on terms and conditions set forth in the Divestiture Agreement. The Transfer and the Assumption shall be deemed to:

(i)

operate as a novation by substitution of the Company by Vasogen Subco with respect to all Transferred Liabilities such that the Company shall be fully and irrevocably released and forever discharged by all Persons with respect to all Transferred Liabilities by the effect of such novation;

(ii)

transfer, assign and convey to Vasogen Subco all rights, defences and counterclaims, of any kind whatsoever, that the Company ever had, now has or may have in the future or prior to the Effective Time in connection with the Transferred Liabilities; and

(iii)

operate as a novation by substitution of the Company by Vasogen Subco as a creditor of all rights, benefits and interests in connection with the Divested Assets that the Company ever had, now has or may have in the future or prior to the Effective Time;

(v)

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

(vi)

five minutes following the Effective Time, each Vasogen Share (excluding those held by Dissenting Vasogen Shareholders) issued and outstanding immediately prior to the Effective Time shall be transferred to New Vasogen free and clear of all Liens in exchange for the issuance of one New Vasogen Share;

(vii)

upon the exchange of Vasogen Shares for New Vasogen Shares in Section 3.2(vi) of this Plan of Arrangement:

(i)

each former Vasogen Shareholder shall cease to be a Vasogen Shareholder and the name of each such former Vasogen Shareholder shall be removed from the registers of Vasogen Shareholder;

(ii)

each former Vasogen Shareholder shall become a New Vasogen Shareholder and shall be added to the register of New Vasogen Shareholders; and

(iii)

New Vasogen shall become the holder of the Vasogen Shares so exchanged and shall be added to the register of Vasogen Shareholders in respect thereof;

(viii)

six minutes following the Effective Time,

(i)

New Vasogen will adopt, and be deemed to have adopted, the New Vasogen Option Plan;

(ii)

each outstanding Vasogen Option that has not been duly exercised prior to the Effective Time, whether or not vested, will 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 and 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, and thereupon the Vasogen Options so exchanged shall be cancelled;

(▇▇▇)

▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ outstanding immediately prior to the Effective Time and not exercised shall, without any further action on behalf of each holder of such Vasogen 2005 Warrants, 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 US$0.021 multiplied by the number of Vasogen Shares to which such Vasogen Warrants relate;

(iv)

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;

(v)

each of the Vasogen DSUs outstanding immediately prior to the Effective Time will be exercised and deemed to be exercised for such number of 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 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; and

(vi)

any and all other rights to acquire Vasogen Shares, if any, other than those contemplated in this Plan of Arrangement, shall be, and shall be deemed to be, terminated and cancelled for no consideration;

(ix)

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

(x)

eight minutes following the Effective Time, the Company 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;

(xi)

nine minutes following the Effective Time, the articles of the Company will be amended to (i) change the name of the Company to “Cervus Corporation”; (ii) amend the Vasogen Shares to become the “Vasogen Redeemable Shares”; (iii) create an unlimited number of the “Cervus Corporation New Common Shares”, a new class of common shares of the Company; (iv) designate that the rights, privileges, conditions and restrictions attaching to the share classes of the Company are as set forth on Schedule “A” to this Plan of Arrangement, and (v) change the province in Canada where the registered office of the Company is situated to the Province of Alberta;

(xii)

ten minutes following the Effective Time, the Cervus Units issued and outstanding immediately prior to the Effective Time shall be sold, assigned and transferred to the Company (free and clear of any Liens) in exchange for Cervus Corporation New Common Shares issued on the basis of three Cervus Corporation New Common Shares for each two Cervus Units so sold, assigned and transferred;

(xiii)

upon the exchange of Cervus Units for Cervus Corporation New Common Shares in Section 3.2(xii) of this Plan of Arrangement:

(i)

each former Cervus Unitholder shall cease to be a Cervus Unitholder and the name of each such former Cervus Unitholder shall be removed from the registers of Cervus Unitholders;

(ii)

each former Cervus Unitholder shall become a Cervus Corporation New Common Shareholder and shall be added to the register of Cervus Corporation New Common Shareholders; and

(iii)

the Company shall become the holder of the Cervus Units so exchanged and shall be added to the register of Cervus Unitholders in respect thereof;

(xiv)

eleven minutes after the Effective Time, the Cervus GP Shares issued and outstanding immediately prior to the Effective Time (excluding those held by Dissenting Cervus GP Shareholders) shall be sold, assigned and transferred to the Company (free and clear of any Liens) in exchange for cash consideration of $1.00 per Cervus GP Share so sold, assigned and transferred;

(xv)

upon the exchange of Cervus GP Shares for cash consideration in Section 3.2(xiv) of this Plan of Arrangement:

(i)

each former Cervus GP Shareholder shall cease to be a Cervus GP Shareholder and the name of each such former Cervus GP Shareholder shall be removed from the registers of Cervus GP Shareholders; and

(ii)

the Company shall become the holder of the Cervus GP Shares so exchanged and shall be added to the register of Cervus GP Shareholders in respect thereof;

(xvi)

twelve minutes after the Effective Time, each Cervus Out-of-the-Money Option outstanding and not exercised prior to the Effective Time shall, without any further action on behalf of each Cervus Optionholder, be amended to remove any restrictions on transferability and be transferred to Cervus (free and clear of any Liens) and thereupon be 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;

(xvii)

thirteen minutes after the Effective Time, each Cervus In-the-Money Option outstanding and not exercised prior to the Effective Time shall, without any further action on behalf of each Cervus Optionholder, be amended to remove any restrictions on transferability and be transferred to Cervus (free of any claims) and thereupon be cancelled in exchange for:

(i)

in the case of the Cervus In-the-Money Options of each Cervus Optionholder which have vested on or prior to the Effective Time, a Cervus Exchange Right entitling each such Optionholder the right to acquire, at a purchase price of $0.01 per Cervus Corporation New Common Share, exercisable at any time during the period of one month from the Effective Time, a number of Cervus Corporation New Common Shares equal to the aggregate Cervus Corporation Exercise Price Differential of each of the Cervus Optionholder's vested Cervus In-the-Money Options divided by the product of the Cervus Weighted Average Trading Price multiplied by 1.5; and

(ii)

in the case of the Cervus In-the-Money Options of each Cervus Optionholder which have not vested on or prior to the Effective Time, a Cervus Exchange Right entitling each such Cervus Optionholder the right to acquire, at a purchase price of $0.01 per Cervus Corporation New Common Share, a number of Cervus Corporation New Common Shares equal to the aggregate Exercise Price Differential of each of the Cervus Optionholder's unvested Cervus In-the-Money Options divided by the product of the Cervus Weighted Average Trading Price multiplied by 1.5. Such Cervus Exchange Rights shall be exercisable, in respect of each Cervus Corporation Common New Share, at any time during the period from the date on which each Cervus In-the-Money Option to which the Cervus Corporation New Common Share relates would have vested had it not been cancelled pursuant to the Arrangement and ending on the date that the Cervus In-the-Money Option would have expired had it not been cancelled pursuant to Arrangement;

(xviii)

fourteen minutes after the Effective Time, each three Cervus Deferred Units that are outstanding at the Effective Date shall be exchanged for two Cervus Corporation Deferred Share Rights;

(xix)

upon the exchange of the Cervus Deferred Units for Cervus Corporation Deferred Share Rights:

(i)

each former holder of Cervus Deferred Units shall cease to be a holder of Cervus Deferred Units and the name of each such holder shall be removed from the register of holders of Cervus Deferred Units;

(ii)

each former holder of Cervus Deferred Units shall become a holder of Cervus Corporation Deferred Share Rights and shall be added to the register of holders of Cervus Corporation Deferred Share Rights; and

(iii)

all Cervus Deferred Units shall be cancelled;

(xx)

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

(xxi)

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

(xxii)

seventeen minutes following the Effective Time, Vasogen Subco shall be and will be deemed to have been wound-up and shall transfer, assign and convey to New Vasogen all of the property, liabilities and assets of Vasogen Subco;

(xxiii)

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

(xxiv)

nineteen minutes following the Effective Time:

(i)

all of the IPC US Special Voting Shares issued and outstanding immediately prior to the Effective Time shall be sold, assigned and transferred to IPC Newco free and clear of any Liens in exchange for one IPC Newco Share; and

(ii)

all of the IPC Opco Convertible Voting Shares issued and outstanding immediately prior to the Effective Time shall be sold, assigned and transferred to IPC Newco free and clear of any Liens 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 sold, assigned and transferred;

(xxv)

upon the exchange of the IPC US Special Voting Shares and IPC Opco Convertible Voting Shares for IPC Newco Shares in Section 2.2(x) of this Plan of Arrangement:

(i)

IntelliPharmaCeutics Inc. shall cease to be a holder of the IPC Opco Convertible Voting Shares and the IPC US Special Voting Shares so transferred and its name shall be removed from the register of holders of the IPC Opco Convertible Voting Shares and of the IPC US Special Voting Shares;

(ii)

IPC Newco shall become the holder of the IPC US Special Voting Shares and the IPC Opco Convertible Voting Shares and shall be added to the register of holders of the IPC US Special Voting Shares and the IPC Opco Convertible Voting Shares in respect thereof; and

(iii)

IPC Newco will execute a joint tax election prepared by IntelliPharmaCeutics Inc. such that these exchanges occur on a tax-deferred rollover basis under subsection 85(1) of the Tax Act;

(xxvi)

twenty minutes following the Effective Time the IPC US Common Shares issued and outstanding immediately prior to the Effective Time held by Canadian resident shareholders shall be sold, assigned and transferred to IPC Newco free and clear of any Liens in exchange for IPC Newco Shares having a fair market value equal to the value of the exchanged IPC US Common Share on the basis of one IPC Newco Share for each IPC US Common Share so sold, assigned and transferred;

(xxvii)

upon the exchange of IPC US Common Shares for IPC Newco Shares in Section 3.2(xxvi) of this Plan of Arrangement:

(i)

each such former IPC US Shareholder shall cease to be a holder of IPC US Common Shares and the name of each such former IPC US Shareholder shall be removed from the registers of IPC US Common Shares;

(ii)

each such former IPC US Shareholder shall become an IPC Newco Shareholder and shall be added to the register of IPC Newco Shareholders;

(iii)

IPC Newco shall become the holder of the IPC US Common Shares so exchanged and shall be added to the register of holders of IPC US Common Shares in respect thereof; and

(iv)

IPC Newco will execute joint tax elections if required by the Canadian resident shareholder such that the exchanges occur on a tax deferred rollover basis under subsection 85(1) of the Tax Act;

(xxviii)

twenty-one minutes after the Effective Time IPC Newco and New Vasogen shall be amalgamated (the “Amalgamation”) with the same effect as provided in Section 181 of the CBCA and, as such, shall continue in existence as one and the same company, being Amalco, under the CBCA on the following terms and conditions:

(i)

the name of Amalco shall be “IntelliPharmaCeutics International Inc.”;

(ii)

the registered office of Amalco shall be situated in the Province of Ontario;

(iii)

Amalco shall be authorized to issue an unlimited number of Amalco Shares;

(iv)

there shall be no restrictions on the activities that Amalco is authorized to carry on, nor any restrictions on the transfer of Amalco Shares;

(v)

the board of directors of Amalco will consist of not less than three and not more than ten directors, the exact number of which shall be determined by the directors from time to time;

(vi)

the directors of Amalco shall have the right to appoint one or more additional directors, who shall hold office for a term expiring no later than the close of the next annual meeting of shareholders, but the total number of directors so appointed shall not exceed one-third of the number of directors elected at the previous annual meeting of the shareholders;

(vii)

the first directors of Amalco who shall hold office until the next annual meeting of shareholders of Amalco or until their successors are elected or appointed, shall be the persons whose names appear below:

Dr. Isa Odidi

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(viii)

the by-laws of Amalco shall be the by-laws of IPC Newco in effect prior to the Effective Date;

(ix)

all of the rights and properties of IPC Newco and New Vasogen immediately before the Amalgamation become the rights and properties of Amalco by virtue of the Amalgamation;

(x)

all of the liabilities of IPC Newco and New Vasogen immediately before the Amalgamation become the liabilities of Amalco by virtue of the Amalgamation; and

(xi)

on the Amalgamation:

(A)

each IPC Newco Share issued and outstanding immediately prior to the Amalgamation shall become ● Amalco Shares;

(B)

each New Vasogen Share issued and outstanding immediately prior to the Amalgamation shall become ● Amalco Shares;

(C)

Amalco will adopt, and be deemed to have adopted, the New Vasogen Option Plan;

(D)

subject to Section 2.3, each outstanding New Vasogen Option, whether or not vested, will be exchanged for such number of Amalco Options for each Amalco Vasogen Option held as is determined on the basis of the same exchange ratio as is specified in Section 3.2(xxviii)(xi)(B) of this Plan of Arrangement for each New Vasogen Option, and the exercise price per Amalco Share issuable upon exercise of each Amalco 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 whole cent;

(E)

each of the New Vasogen Warrants will become such number of Amalco Warrants for each New Vasogen Warrant as is determined on the basis of the same exchange ratio as is specified in Section 3.2(xxviii)(xi)(B) of this Plan of Arrangement. All terms and conditions of such Amalco Warrants will be the same as the terms and conditions of the New Vasogen Warrants mutatis mutandis. Warrant certificates previously evidencing such New Vasogen Warrants shall thereafter evidence and be deemed to evidence such Amalco Warrants outstanding in replacement therefor;

(xxix)

twenty-two minutes following the Effective Time and subject to the completion of the Merger and pursuant to the terms of the Merger Agreement, Amalco will issue Amalco Shares to the former IPC US Shareholders in respect of the IPC US Shares that were outstanding immediately prior to giving effect to the Merger (which for greater certainty shall not include any IPC US Common Shares exchanged pursuant to Section 3.2(xxvi) of this Plan of Arrangement) with such Amalco Shares issued for each such IPC US Common Share on the basis of the same exchange ratio as is specified in Section 3.2(xxviii)(xi)(A) of this Plan of Arrangement;

(xxx)

also twenty-two minutes following the Effective Time, subject to the completion of the Merger and pursuant to the terms of the Merger Agreement and subject to Section 2.3, outstanding IPC US Options, whether or not vested, that have not been duly exercised prior to the effective time as determined in this Section 3.2(xxx) will be exchanged for Amalco Options on the following basis:

(i)

the number of Amalco Shares subject to each Amalco Option shall be determined by applying the exchange ratio specified in Section 2.2(bb)(xi)(A) of this Plan of Arrangement to the number of IPC US Common Shares subject to each IPC US Option; and

(ii)

the exercise price per Amalco Share issuable upon exercise of each Amalco Option shall 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 whole cent;

(xxxi)

the initial auditors of Amalco will be Deloitte and Touche LLP who shall continue in the office until the close of business of the first annual meeting of the holders of Amalco Shares, and the directors of Amalco are authorized to fix the remuneration of such auditors; and

(xxxii)

the auditors of the Company will be KPMG LLP, who shall continue in the office until the close of business of the next annual meeting of the holders of Cervus Corporation New Common Shares, and the directors of the Company are authorized to fix the remuneration of such auditors.

(i)

With respect to any New Vasogen Option, if the directors of Amalco determine in good faith that the excess of the aggregate fair market value of the Amalco Shares subject to the Amalco Option immediately after the issuance of the Amalco Option over the aggregate option exercise price for such shares pursuant to the Amalco Option (such excess, referred to as the “Vasogen Post-Exchange Option Value”) would otherwise exceed the excess of the aggregate fair market value of the New Vasogen Shares subject to such New Vasogen Option immediately before the issuance of the Amalco Option over the aggregate option exercise price for such shares pursuant to such New Vasogen Option (such excess, referred to as the “Vasogen Pre-Exchange Option Value”), the provisions in Section 2.2(bb)(xi)(D) shall be modified, but only to extent necessary and in a manner that does not otherwise adversely affect the holder of the Amalco Option, so that the Vasogen Post-Exchange Option Value does not exceed the Vasogen Pre-Exchange Option Value.

(ii)

With respect to any IPC US Option, if the directors of Amalco determine in good faith that the excess of the aggregate fair market value of the Amalco Shares subject to the Amalco Option immediately after the issuance of the Amalco Option over the aggregate option exercise price for such shares pursuant to the Amalco Option (such excess, referred to as the “IPC Post-Exchange Option Value”) would otherwise exceed the excess of the aggregate fair market value of the IPC US Shares subject to such IPC US Option immediately before the issuance of the Amalco Option over the aggregate option exercise price for such shares pursuant to such IPC US Option (such excess, referred to as the “IPC Pre-Exchange Option Value”), the provisions in Section 2.2(dd) shall be modified, but only to extent necessary and in a manner that does not otherwise adversely affect the holder of the Amalco Option, so that the IPC Post-Exchange Option Value does not exceed the IPC Pre-Exchange Option Value.

(iii)

With respect only to a New Vasogen Option or an IPC US Option that is held by a resident or citizen of the United States, the exercise price and the number of Amalco Shares subject to an Amalco Option shall be determined in a manner consistent with the requirements of Section 409A of the Internal Revenue Code; provided, further, that in the case of any such New Vasogen Option or IPC US Option which was an incentive stock option (as defined in Section 422 of the Internal Revenue Code) immediately prior to the time specified in Section 2.2(bb)(xi)(D) or 2.2(dd), as applicable, the exercise price, the number of Amalco Shares and the terms and conditions of the Amalco Option shall be determined in a manner consistent with the requirements of Section 424(a) of the Internal Revenue Code.

(i)

 In lieu of any fractional Cervus Corporation New Common Shares, each former holder of Cervus Units otherwise entitled to a fractional interest in Cervus Corporation New Common Shares will receive the nearest whole number of Cervus Corporation New Common Shares, as the case may be, with fractions of 0.50 rounded down.  No certificates representing fractional Cervus Corporation New Common Shares shall be issued pursuant to the Plan of Arrangement.

(ii)

In lieu of any fractional Amalco Shares, each former holder of Vasogen Shares or IPC Shares otherwise entitled to a fractional interest in Amalco Shares will receive the nearest whole number of Amalco Shares, as the case may be, with fractions of 0.50 rounded down. No certificates representing fractional Amalco Shares shall be issued pursuant to the Plan of Arrangement.

(i)

ultimately are entitled to be paid fair value for such Vasogen Shares, will be entitled to be paid the fair value of such Vasogen Shares by New Vasogen (and not by the Company), and will not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holders not exercised their Vasogen Dissent Rights in respect of such Vasogen Shares; or

(ii)

ultimately are not entitled, for any reason, to be paid fair value for such Vasogen Shares shall be deemed to have participated in the Arrangement on the same basis as a non-dissenting holder of Vasogen Shares.

(i)

In no circumstances shall the Company or any other Person be required to recognize a Person exercising Vasogen Dissent Rights unless such Person is the holder of those Vasogen Shares in respect of which such rights are sought to be exercised.

(ii)

In no case shall the Company or any other Person be required to recognize Dissenting Vasogen Shareholders as holders of Vasogen Shares in respect of which Vasogen Dissent Rights have been validly exercised after the Effective Time, and the names of such Dissenting Vasogen Shareholders shall be removed from the registers of holders of Vasogen Shares in respect of which Vasogen Dissent Rights have been validly exercised at the Effective Time. In addition to any other restrictions under Section 190 of the CBCA, none of the following shall be entitled to exercise Vasogen Dissent Rights: (i) holders of Vasogen Options, (ii) holders of Vasogen DSUs, (iii) holders of Vasogen Warrants, and (iv) holders of Vasogen Shares who vote or have instructed a proxyholder to vote such Vasogen Shares in favour of the Vasogen Arrangement Resolution (but only in respect of such Vasogen Shares).

(i)

ultimately are entitled to be paid fair value for such Cervus GP Shares, will be entitled to be paid the fair value of such Cervus GP Shares, and will not be entitled to any other payment or consideration, including any payment that would be payable under the Arrangement had such holders not exercised their Cervus GP Dissent Rights in respect of such Cervus GP Shares; or

(ii)

ultimately are not entitled, for any reason, to be paid fair value for such Cervus GP Shares shall be deemed to have participated in the Arrangement on the same basis as a non-dissenting holder of Cervus GP Shares.

(i)

In no circumstances shall Cervus GP or any other Person be required to recognize a Person exercising Cervus GP Dissent Rights unless such Person is the holder of those Cervus GP Shares in respect of which such rights are sought to be exercised.

(ii)

In no case shall Cervus GP or any other Person be required to recognize Dissenting Cervus GP Shareholders as holders of Cervus GP Shares in respect of which Cervus GP Dissent Rights have been validly exercised after the Effective Time, and the names of such Dissenting Cervus GP Shareholders shall be removed from the registers of holders of Cervus GP Shares in respect of which Cervus GP Dissent Rights have been validly exercised at the Effective Time. In addition to any other restrictions under Section 190 of the CBCA, none of the following shall be entitled to exercise Cervus GP Dissent Rights: (i) holders of Cervus Options, (ii) holders of Cervus Units, (iii) holders of Cervus Deferred Units, and (iv) holders of Cervus GP Shares who vote or have instructed a proxyholder to vote such Cervus GP Shares in favour of the Cervus GP Arrangement Resolution (but only in respect of such Cervus GP Shares).

(i)

As soon as practicable following the Effective Date, the Company shall cause to be delivered for the benefit of the former holders of Cervus Units and to the former holders of Cervus GP Shares, certificates representing, in the aggregate, the Cervus Corporation New Common Shares or cash to which such holders are entitled to pursuant to Section 3.2 of this Plan of Arrangement. The Company will, as soon as practicable following the later of the Effective Date and the date of deposit (by a former holder of Cervus Units or a former holder of Cervus GP Shares exchanged under the Arrangement) of a duly completed Letter of Transmittal and the certificates representing such Cervus Units or Cervus GP Shares, as applicable, either:

(i)

forward or cause to be forwarded by first class mail (postage prepaid) or, the case of postal disruption, by such other means as the Cervus Depositary may deem prudent, to such former holder of Cervus Units and/or to such former holder of Cervus GP Shares, as applicable, at the address specified in the letter of transmittal; or

(ii)

if requested by such holders in the Letter of Transmittal, make available or cause to be made available at the Cervus Depositary for pickup by such holder

(ii)

Where a certificate formerly representing Cervus Units or Cervus GP Shares is not deposited with all other documents as provided for in Section 5.1(i) of this Plan of Arrangement on or prior to the sixth anniversary date of the Effective Time, it will cease to represent a right or claim of any kind or nature against or in the Company and shall be deemed to have been surrendered to the Company together with all distributions and sale proceeds thereon held for such holder. All such certificates surrendered to the Company shall be cancelled.

(iii)

No holder of Cervus Units, Cervus GP Shares, Cervus Options or Cervus Deferred Units shall be entitled to receive any consideration with respect to such Cervus Units, Cervus GP Shares, Cervus Options or Cervus Deferred Units other than the consideration to which such holder is entitled to receive in accordance with Section 3.2 and Section 5.1 of this Plan of Arrangement and, for greater certainty, no such holder with be entitled to receive any interest, dividends, premium or other payment in connection therewith, other than any declared but unpaid dividends.

(i)

As soon as practicable following the Effective Date, Amalco shall cause to be delivered for the benefit of the former holders of Vasogen Shares, IPC Opco Shares and IPC US Shares, certificates representing, in the aggregate, the Amalco Shares to which such holders are entitled to pursuant to Section 3.2 of this Plan of Arrangement. Amalco will, as soon as practicable following the later of the Effective Date and the date of deposit (by a former holder of Vasogen Shares, IPC US Shares, or IPC Opco Shares exchanged under the Arrangement) of a duly completed Letter of Transmittal and the certificates representing such Vasogen Shares, IPC US Shares or IPC Opco Shares, as applicable, either:

(i)

forward or cause to be forwarded by first class mail (postage prepaid) or, the case of postal disruption, by such other means as the Amalco Depositary may deem prudent, to such former holder of Vasogen Shares, IPC US Shares or IPC Opco Shares at the address specified in the Letter of Transmittal; or

(ii)

if requested by such holders in the Letter of Transmittal, make available or cause to be made available at the Amalco Depositary for pickup by such holder;

(ii)

Where a certificate formerly representing Vasogen Shares, IPC US Shares or IPC Opco Shares is not deposited with all other documents as provided for in Section 5.2(i) of this Plan of Arrangement on or prior to the sixth anniversary date of the Effective Time, it will cease to represent a right or claim of any kind or nature against or in Amalco and shall be deemed to have been surrendered to Amalco together with all distributions and sale proceeds thereon held for such holder. All such certificates surrendered to Amalco shall be cancelled.

(iii)

No former holder of IPC Opco Shares, IPC US Shares or Vasogen Shares shall be entitled to receive any consideration with respect to such IPC Opco Shares, IPC US Shares or Vasogen Shares other than the consideration to which such holder is entitled to receive in accordance with Section 5.2 of this Plan of Arrangement and, for greater certainty, no such holder with be entitled to receive any interest, dividends, premium or other payment in connection therewith, other than any declared but unpaid dividends.

(iv)

No former holder of Vasogen Options, Vasogen DSUs, Vasogen Warrants or IPC Options shall be entitled to receive any consideration in respect of such Vasogen Options, Vasogen DSUs, Vasogen Warrants or IPC Options, other than the rights such holder is entitled to receive in accordance with Section 3.2 of this Plan of Arrangement.

(i)

The Company, Cervus and IPC Opco may amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Time, provided that each such amendment, modification and/or supplement must (i) comply with the terms of the IPC Arrangement Agreement and the Cervus Arrangement Agreement; (ii) be set out in writing; (iii) be filed with the Court and, if made following any of the Cervus Meeting, the Cervus GP Meeting, the IPC US Meeting or the Vasogen Meeting, approved by the Court; and (iv) communicated to holders of Vasogen Shares, IPC Shares the Cervus Units and/or the Cervus GP Shares, if and as required by the Court.

(ii)

Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company, IPC Opco and Cervus at any time prior to each of the Cervus Meeting, the Cervus GP Meeting, the IPC US Meeting and the Vasogen Meeting with or without any other prior notice or communication, and if so proposed and accepted by the Persons voting at each of the Cervus Meeting, the Cervus GP Meeting, the IPC US Meeting and the Vasogen Meeting (as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.

(iii)

Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following any of the Cervus Meeting, the Cervus GP Meeting, the IPC US Meeting or the Vasogen Meeting shall be effective only if (i) such amendment, modification or supplement is made in accordance with the terms and conditions of the IPC Arrangement Agreement and the Cervus Arrangement Agreement, as applicable; and (ii) if required by the Court, it is consented to by the requisite number of holders of the Vasogen Shares, the Cervus Units and/or the Cervus GP Shares, voting in the manner directed by the Court.

(iv)

Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date unilaterally by the Company, provided that it is consented to by Amalco and it concerns a matter which, in the reasonable opinion of the Company, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the economic interest of any former holder of Vasogen Shares, Vasogen Options, Vasogen DSUs, Vasogen Warrants, IPC US Shares, IPC Opco Shares or IPC Deferred Options.

(v)

This Plan of Arrangement or portions thereof may be withdrawn prior to the Effective Time in accordance with the terms of the IPC Arrangement Agreement and Cervus Arrangement Agreement, as applicable.

(i)

Payment of Dividends:  The holders of the common shares will be entitled to receive dividends if, as and when declared by the board of directors of the Corporation out of the assets of the Corporation properly applicable to the payment of dividends in such amounts and payable in such manner as the board of directors may from time to time determine.  Subject to the rights of the holders of any other class of shares of the Corporation entitled to receive dividends in priority to or concurrently with the holders of the common shares, the board of directors may in its sole discretion declare dividends on the common shares to the exclusion of any other class of shares of the Corporation.

(ii)

Participation upon Liquidation, Dissolution or Winding Up:  In the event of the liquidation, dissolution or winding up of the Corporation or other distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs, the holders of the common shares will, subject to the rights of the holders of any other class of shares of the Corporation entitled to receive assets of the Corporation upon such a distribution in priority to or concurrently with the holders of the common shares, be entitled to participate in the distribution. Such distribution will be made in equal amounts per share on all the common shares at the time outstanding without preference or distinction.

(iii)

Voting Rights:  The holders of the common shares will be entitled to receive notice of and to attend all annual and special meetings of the shareholders of the Corporation and to one vote in respect of each common share held at all such meetings.

(i)

Payment of Dividends:  The holders of the redeemable preferred shares will not be entitled to receive any dividends thereon.

(ii)

Participation upon Liquidation, Dissolution or Winding Up:  In the event of the liquidation, dissolution or winding up of the Corporation or other distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs, the holders of the redeemable preferred shares will be entitled to receive from the assets of the Corporation the Redemption Amount (as defined below) before any amount is paid or any assets of the Corporation are distributed to the holders of any common shares or shares of any other class ranking junior to the redeemable preferred shares.  After payment to the holders of the redeemable preferred shares of the amount so payable to them as above the holders of the redeemable preferred shares will not be entitled to receive any further assets of the Corporation in any further distribution of assets of the Corporation among its shareholders for the purpose of winding up its affairs.

(iii)

Redemption by Corporation:  The Corporation shall, subject to the requirements of the Canada Business Corporations Act, at the time specified in articles of arrangement of the Corporation in respect of which this Schedule “A” is incorporated, redeem each redeemable preferred share in accordance with Section 2.2(u) of the plan of arrangement forming part of such articles of arrangement and distribute to the holder of the redeemable preferred shares the assets of the Corporation specified in such plan of arrangement (the “Redemption Amount”). No notice of redemption or other act or formality on the part of the Corporation shall be required to call the redeemable preferred shares for redemption.

(iv)

Voting Rights:  The holders of the redeemable preferred shares will not be entitled to receive notice of and to attend all annual and special meetings of the shareholders of the Corporation and will not be entitled to vote in respect of each redeemable preferred share held at all such meetings.

A.

Cervus LP, Cervus GP Ltd. and Vasogen Inc. are parties to an arrangement agreement (the “Arrangement Agreement”) dated August 14, 2009 pursuant to which the parties to this agreement (the “Parties”) will engage in an arrangement of Vasogen (the “Arrangement”) under the provisions of the Canada Business Corporations Act;

B.

It was a condition of the Arrangement Agreement that the Parties enter into this agreement in connection with the Arrangement; and

C.

The Parties have entered into this Agreement in connection with, and as one of the steps of, the Arrangement.

1.1

Definitions