LOTO INC. STANDBY COMMITMENT AGREEMENT
NOVATION
This
Novation to the Standby Commitment Agreement (this “Novation”) is made as
of April 19, 2010, by and between Loto Inc. (the “Company”), Mhalka Capital Investments
Ltd. (“Mhalka”), 1476448
Ontario Inc. (“1476448
Ontario”) (“1476448 Ontario”) and
2238646 Ontario Inc. (“2238646 Ontario” and
together with the Company, Mhalka, and 1476448 Ontario, the “Parties”).
WHEREAS, on August 3, 2009,
the Company, 1476448 Ontario and Mhalka entered into a Standby Commitment
Agreement (the “Commitment
Agreement”), pursuant to which 1476448 Ontario and Mhalka irrevocably
agreed, that they would jointly and severally provide the Company up to an
aggregate of One Million Five Hundred Thousand U.S. Dollars (US$1,500,000) (the
“Commitment
Amount”) pursuant to the terms and conditions set forth
therein;
WHEREAS, simultaneously
herewith, Mhalka and 2238646 Ontario are entering into an agreement pursuant to
which Mhalka shall sell to 2238646 Ontario all of the shares of the Company’s
common stock owned by Mhalka; and
WHEREAS, the Parties have now
determined that it is advisable that 2238646 Ontario replace Mhalka as a party
to the Commitment Agreement;
NOW, THEREFORE, the Parties
hereby covenant and agree that:
1. 2238646
Ontario shall fully and completely assume all rights, obligations and
liabilities under the Commitment Agreement, to the full extent set forth
therein, including all prior and future Mhalka obligations to the Company with
respect to loans of the Commitment Amount.
2. Mhalka
is hereby released from any and all rights, obligations and liabilities under
the Commitment Agreement, and shall have no further duty thereunder to either
2238646 Ontario or the Company; and the Company hereby agrees to indemnify and
hold Mhalka harmless in respect of any and all prior or future obligations under
the Commitment Agreement.
3. All
other terms and conditions of the Commitment Agreement shall be and remain in
full force and effect as therein written.
4. This
Novation may be executed in multiple counterparts, each of which shall
constitute an original, but all of which together shall constitute but one
instrument.
5. In
the event of any conflict or inconsistency between the provisions of this
Novation and the provisions of the Commitment Agreement, the provisions of this
Novation shall govern and control to the extent of such conflict or
inconsistency.
IN
WITNESS WHEREOF, the Parties have caused this Novation to be duly executed by
the authorized officer set forth below as of the date first above
stated.
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By:
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/s/ Xxxxxxx Xxxxxx
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Name:
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Xxxxxxx
Xxxxxx
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Title:
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Chief
Financial Officer
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MHALKA
CAPITAL INVESTMENTS LTD.
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By:
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/s/ Perpetum Finance
Inc.
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Name:
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Perpetum
Finance Inc.
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Title:
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Director
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1476448
ONTARIO
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By:
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/s/
Xxx Xxxxx
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Name:
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Xxx
Xxxxx
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Title:
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President
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2238646
ONTARIO
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By:
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/s/ Xxxxx Xxxxxxx Xxxxx
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Name:
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Xxxxx
Xxxxxxx Xxxxx
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Title:
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