Document:

NOVATION

     

    LOTO
INC.

     

    FOUNDERS’
AGREEMENT

    

    This
Novation to the Founders’ Agreement (this “Novation”) is made as
of April 19, 2010, by and between Loto Inc. (the “Company”), Mhalka Capital Investments
Ltd. (“Mhalka”), A Few
Brilliant Minds Inc. (the “Inventor”) and 2238646 Ontario Inc. (the “Ontario Company” and
together with the Company, Mhalka, and the Inventor, the “Parties”).

    

    WHEREAS, on May 13, 2009, the
Company, the Inventor and Mhalka entered into a Founders’ Agreement (the “Founders’
Agreement”), pursuant to which the Inventor and Mhalka entered into
certain agreements regarding the funding, development and management of the
Company;

    

    WHEREAS, simultaneously
herewith, Mhalka and Ontario Company are entering into an agreement pursuant to
which Mhalka shall sell to Ontario Company 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 Ontario Company replace Mhalka as a party
to the Founders’ Agreement;

    

    NOW, THEREFORE, the Parties
hereby covenant and agree that:

    

    1.           Ontario
Company shall fully and completely assume all rights, obligations and
liabilities under the Founders’ Agreement, to the full extent set forth
therein.

    

    2.           Mhalka
is released from any and all obligations and liabilities under the Founders’
Agreement, and shall have no further duty thereunder.

    

    3.           Mhalka
hereby transfers any and all rights under Founders’ Agreement to Ontario
Company, including but not limited to continuing rights regarding the governance
of the Company and the appointment of its Board of Directors.

    

    4.           The
Inventor hereby irrevocably waives any and all rights set forth in Sections 4, 5
and 6 of the Founders’ Agreement concerning Mhalka’s sale to Ontario Company,
including any and all Rights of First Refusal, Tag-Along Rights or similar
rights.

    

    5.           All
other terms and conditions of the Founders’ Agreement shall be and remain in
full force and effect as therein written, including those provisions waived
hereby.

    

    6.           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.

    

    7.           In
the event of any conflict or inconsistency between the provisions of this
Novation and the provisions of the Founders’ Agreement, the provisions of this
Novation shall govern and control to the extent of such conflict or
inconsistency.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Novation-
Loto Inc. -Founders’ Agreement

    

    
      
        

      

    

    

    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.

    

    LOTO
INC.

    

    
      
        
          
            
              
                
                  
                    	
                            By:

                          	
                            /s/ Stephen Knight

                          	 
      
	 
      	
                            Name:

                          	
                            Stephen
      Knight

                          	 
      
	 
      	
                            Title:

                          	
                            Chief
      Financial Officer

                          	 
      
	 
      	 
      	 
      	 
      
	
                            MHALKA
      CAPITAL INVESTMENTS LTD.

                          	 
      
	 
      	 
      	 
      	 
      
	
                            By:

                          	
                            /s/ Perpetum Finance Inc.

                          	 
      
	 
      	
                            Name:

                          	
                            Perpetum
      Finance Inc.

                          	 
      
	 
      	
                            Title:

                          	
                            Director

                          	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                            A
      FEW BRILLIANT MINDS INC.

                          	 
      
	 
      	 
      	 
      	 
      
	
                            By:

                          	
                            /s/ Gino Porco

                          	 
      
	 
      	
                            Name:

                          	
                            Gino
      Porco

                          	 
      
	 
      	
                            Title:

                          	
                            President

                          	 
      
	 
      	 
      	 
      	 
      
	
                            2238646
      ONTARIO INC.

                          	 
      
	 
      	 
      	 
      	 
      
	
                            By:

                          	
                            /s/ Jason Randall Barrs

                          	 
      
	 
      	
                            Name:

                          	
                            Jason
      Randall Barrs

                          	 
      
	 
      	
                            Title:NOVATION

     

    LOTO
INC.

     

    STANDBY
COMMITMENT AGREEMENT

     

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      Novation
- Loto Inc.- Standby Commitment Agreement 

        
          

        

      

    

     

    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.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  LOTO
      INC.

                                
	 
      	 
      	 
      
	
                                  By:

                                	
                                  /s/ Stephen Knight

                                
	 
      	
                                  Name: 

                                	
                                  Stephen
      Knight

                                
	 
      	
                                  Title:

                                	
                                  Chief
      Financial Officer

                                
	 
      	 
      	 
      
	
                                  MHALKA
      CAPITAL INVESTMENTS LTD.

                                
	 
      	 
      	 
      
	
                                  By:

                                	
                                  /s/ Perpetum Finance
Inc.

                                
	 
      	
                                  Name:

                                	
                                  Perpetum
      Finance Inc.

                                
	 
      	
                                  Title:

                                	
                                  Director

                                
	 
      	 
      	 
      
	
                                  1476448
      ONTARIO

                                
	 
      	 
      	 
      
	
                                  By: 

                                	      
                                  /s/
      Joe Ertel

                                
	 
      	
                                  Name:

                                	      
                                  Joe
      Ertel

                                
	 
      	
                                  Title:

                                	      
                                  President

                                
	 
      	 
      	 
      
	
                                  2238646
      ONTARIO

                                
	 
      	 
      	 
      
	
                                  By:

                                	
                                  /s/ Jason Randall Barrs

                                
	 
      	
                                  Name:

                                	
                                  Jason
      Randall Barrs

                                
	 
      	
                                  Title:

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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