CANCELLATION AGREEMENT


 


CANCELLATION AGREEMENT,
dated December 22, 2010 (this “Agreement”), by and among, California Gold Corp., a Nevada corporation
(the “Company”), and James Davidson (the “Cancelling Party”).


 


BACKGROUND


 


WHEREAS, the Cancelling
Party is the record and beneficial owner of 35,727,625 shares of the Company's common stock, par value $0.001 per share, including
31,000,000 shares purchased from the Company on November 12, 2007 for a purchase price of $31,000 (the "2007 Shares");


 


WHEREAS, in an effort
to enhance the Company’s ability to raise financing in order to proceed with the implementation of its new business plan,
and to induce certain prospective investors to acquire securities of the Company in an ongoing private placement that is expected
to close (the “Closing”) no later than December 31, 2010, the Cancelling Party desires to have cancelled
and the Company desires to cancel 13,000,000 of the 2007 Shares (the "Subject Shares") in exchange for
$13,000 (the "Cash Consideration").


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:


 


1.           Consideration.
In consideration for cancellation of the Subject Shares, the Company agrees to pay to the Cancelling Party the Cash Consideration,
by wire transfer of immediately available funds, concurrently with the Closing.


 


2.           Cancellation
of Subject Shares. The Cancelling Party has delivered to the Company for cancellation stock certificates representing the Subject
Shares along with duly executed medallion guaranteed stock powers covering the Subject Shares (or such other documents acceptable
to the Company’s transfer agent) and hereby irrevocably instructs the Company and the Company’s transfer agent to cancel
the Subject Shares, immediately following the Closing, such that the Subject Shares will no longer be outstanding on the stock
ledger of the Company and such that the Cancelling Party shall no longer have any interest in the Subject Shares whatsoever. The
Company shall immediately deliver to the Company’s transfer agent irrevocable instructions providing for the cancellation
of the Subject Shares.


 


3.           Release.
For and in consideration of the covenants and promises contained herein, the Cancelling Party,
together with his heirs, executors, administrators, and assigns, does hereby remise, release and forever discharge the Company,
its respective directors, officers, shareholders, employees and agents, and their respective successors and assigns, of and from
all claims, causes of action, suits and demands whatsoever which the Cancelling Party ever had,
now or may have howsoever arising out of the original purchase and this cancellation of the Subject Shares. 


 




    	 



    	 



    




 


4.           Representations
by the Cancelling Party.


 


(a)          The
Cancelling Party owns the Subject Shares, of record and beneficially, free and clear of all liens, claims, charges, security interests,
and encumbrances of any kind whatsoever. The Cancelling Party has sole control over the Subject Shares or sole discretionary authority
over any account in which they are held. Except for this Agreement, no person has any option or right to purchase or otherwise
acquire the Subject Shares, whether by contract of sale or otherwise, nor is there a “short position” as to the Subject
Shares.


 


(b)          The
Cancelling Party has full right, power and authority to execute, deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly executed and delivered by the Cancelling Party and constitutes a
valid, binding obligation of the Cancelling Party, enforceable against it in accordance with its terms (except as such enforceability
may be limited by laws affecting creditor's rights generally).


 


5.           Further
Assurances. Each party to this Agreement will use his or its best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including the execution
and delivery of such other documents and agreements as may be necessary to effectuate the cancellation of the Subject Shares).


 


6.           Amendment
and Waiver. Any term, covenant, agreement or condition of this Agreement may be amended, with the written consent of the Company
and the Cancelling Party, or compliance therewith may be waived (either generally or in a particular instance and either retroactively
or prospectively), by one or more substantially concurrent written instruments signed by the Company and the Cancelling Party.


 


7.           Survival
of Agreements, Representations and Warranties, etc. All representations and warranties contained herein shall survive the execution
and delivery of this Agreement.


 


8.           Successors
and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by the Company and the Cancelling Party,
and their respective successors and assigns.


 


9.           Governing
Law. This Agreement (including the validity thereof and the rights and obligations of the parties hereunder and thereunder)
and all amendments and supplements hereof and thereof and all waivers and consents hereunder and thereunder shall be construed
in accordance with and governed by the internal laws of the State of New York without regard to its conflict of laws rules, except
to the extent the laws of Nevada are mandatorily applicable.


 




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10.          Miscellaneous.
This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. In case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. This
Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts but all such counterparts
shall together constitute but one and the same instrument. This Agreement may be reproduced by any electronic, photographic, photostatic,
magnetic, microfilm, microfiche, microcard, miniature photographic, facsimile or other similar process and the original thereof
may be destroyed. The parties agree that any such reproduction shall, to the extent permitted by law, be as admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or
not the reproduction was made in the regular course of business) and that any enlargement, facsimile or further reproduction shall
likewise be admissible in evidence. Facsimile execution and delivery of this Agreement is legal, valid and binding execution and
delivery for all purposes.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.


 


	 	CALIFORNIA GOLD CORP.
	 	 
	 	By:	/s/ James Davidson
	 	 	Name: James Davidson
	 	 	Title: President and CEO
	 	 	 
	 	 	/s/ James Davidson
	 	 	JAMES DAVIDSON


 


[Signature Page to Cancellation Agreement]