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| Form:   | The Rights Plan is an agreement dated December 5, 2013 between Caledonia and Computershare Investor Services Inc. (the "Rights Agent").                                                                                                                         |
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| Rights: | One Right is issued for each common share. Initially, the Rights are attached to and trade with the common shares and have an artificial exercise price in excess of the market price. Rights are not exercisable before the Separation Time (described below). |

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| Flip-In Event:      | Upon a person (an "Acquiring Person") acquiring 20% or more of the outstanding common shares (a "Flip-In-Event"), each Right then entitles the holder to purchase one additional common share at 50% (or less) of the market price of the common shares as at the date which is ten trading days after the Flip-In Event. Rights held by the Acquiring Person, however, would be null and void. This massive dilution of the Acquiring Person's shareholdings is the "poison pill" in the Plan.  Two other conditions must be in place before the poison pill defence is fully activated: the Separation Time must have occurred and no waiver by the board of the dilution clause or other exempting steps shall have occurred. |
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| Separation Time:    | The "Separation Time" occurs on the tenth trading day following the earlier of an announcement that a person has become an Acquiring Person or the public announcement that someone proposes to make a take-over bid other than a Permitted Bid (or such later time as may be determined by the board). After the Separation Time, the Rights become exercisable at the dilutive exercise price and become transferable separately from the shares.                                                                                                                                                                                                                                                                                   |
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| Permitted Bid:      | The poison pill provisions of the Rights Plan can be avoided if the prospective acquirer makes a Permitted Bid.  A Permitted Bid may be for all or less than all the outstanding common shares and must have the following characteristics:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|                | a)      it must be made by way of take-over bid circular;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|                | b)     it must be made to all shareholders;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                | c)      it must provide that no shares will be taken up or paid for until the bid has been open for at least 60 days, and then only if 50% of the shares held by independent shareholders (being shareholders not affiliated or acting jointly or in concert with the bidder) have been tendered; and                                                                                                                                                                                                                                                                                                                                                                                                        |
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|                | d)     if the 50% deposit condition described above is met, the bidder must announce that fact and allow the bid to remain open for tender of shares for at least a further 10 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Portfolio Managers: | The provisions of the Rights Plan relating to portfolio managers are designed to prevent the occurrence of a Flip-In Event solely by virtue of the customary activities of such managers, including trust companies and other such persons, where a substantial portion of the ordinary business of such person is the management of funds for unaffiliated investors, so long as any such person does not propose to make a take-over bid either alone or jointly with others.                                                                                                                                                                                                                                                       |
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| Redemption:         | At any time prior to the Separation Time, the Board may with the approval of shareholders redeem the Rights for nominal consideration.   This is a method for winding up and terminating the Rights Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

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| Amendments: | After the effective date of the Rights Plan, all substantive amendments can only be made with shareholder approval.                                                           |
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| Expiration: | The Rights Plan expires unless approved by Caledonia's shareholders on or before the third anniversary of the date of the last shareholder approval of the Rights Plan.  |

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