Exhibit 10.1
 
MASS HYSTERIA ENTERTAINMENT COMPANY, INC.

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (“Agreement”) is made as of April __, 2011, but is
only effective as of the date of acceptance of the “Purchaser Signature Page” by
and between Mass Hysteria Entertainment Company, Inc., a Nevada corporation (the
“Company”), and Daniel Grodnik (the “Purchaser”).
 
R E C I T A L S

A.           The Company has previously entered into an Employment Agreement
with the Purchaser under which the Company agreed to pay Purchaser $360,000 per
year.

B.           The Company has accrued salary due Purchaser for fiscal 2010 of
$62,930 (the “Accrued Salary”) through November 30, 2010.

C.           In consideration of forgiveness by Purchaser of $10,000 of such
Accrued Salary, the Company is offering 10,000 shares (the “Shares”) of its
series A preferred stock, par value $0.001 per share (the “Series A Preferred”)
on the terms and subject to the conditions set forth herein.

AGREEMENT

It is agreed as follows:

1.   PURCHASE AND SALE OF SHARES. In reliance upon the representations and
warranties of the Company and the Purchaser contained herein and subject to the
terms and conditions set forth herein, at Closing, the Purchaser shall purchase,
and the Company shall sell and issue to the Purchaser the Shares in exchange
forgiveness of $10,000 in Accrued Salary (the “Purchase Price”).  The aggregate
Purchase Price for the sale of the Shares contemplated hereby shall be in
consideration of, and shall constitute payment of $10,000 in Accrued Salary.
 
2.   CLOSING.
 
2.1   Date and Time.  The closing of the sale of the Shares contemplated by this
Agreement (the “Closing”) shall take place at the offices of Indeglia & Carney,
P.C., counsel for the Purchaser, on or before April __, 2011.
 
2.2   Deliveries by Purchaser.  Purchaser shall deliver the following at
Closing:
 
2.2.1 a completed and executed Purchaser Signature Page; and
 
2.3   Deliveries by Company.  The Company shall deliver the following at
Closing:
 
 
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2.3.1 a completed and executed copy of this Agreement; and
 
2.3.2 the certificates representing the Shares purchased by Purchaser, with each
Shares being in definitive form and registered in the name of Purchaser.
 
3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
As a material inducement to the Purchaser to enter into this Agreement and to
purchase the Shares, the Company represents and warrants that the following
statements are true and correct in all material respects as of the date hereof
and will be true and correct in all material respects at Closing, except as
expressly qualified or modified herein.

3.1   Organization and Good Standing.  The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada and has full corporate power and authority to enter into and perform its
obligations under this Agreement, and to own its properties and to carry on its
business as presently conducted and as proposed to be conducted.
 
3.2   Valid Issuance of Shares.  The Shares that are being issued to Purchaser
hereunder, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, will be duly and validly issued, fully
paid and nonassessable and free of restrictions on transfer, other than
restrictions on transfer under this Agreement and under applicable federal and
state securities laws, will be free of all other liens and adverse claims.

3.3   SEC Reports and Financial Statements.
 
3.3.1 The Company has delivered or made available to each Purchaser accurate and
complete copies (excluding copies of exhibits) of each report, registration
statement, and definitive proxy statement filed by the Company with the United
States Securities and Exchange Commission (“SEC”) since August 1, 2009
(collectively, with all information incorporated by reference therein or deemed
to be incorporated by reference therein, the “SEC Reports”). All statements,
reports, schedules, forms and other documents required to have been filed by the
Company with the SEC have been so filed on a timely basis, except as indicated
in such SEC Reports.  As of the time it was filed with the SEC (or, if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing): (i) each of the SEC Reports complied in all material respects
with the applicable requirements of the Securities Act of 1933, as amended (the
“1933 Act”), or the Securities Exchange Act of 1934, as amended (the “1934
Act”); and (ii) none of the SEC Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
 
 
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3.3.2 Except for the pro forma financial statements, the consolidated financial
statements contained in the SEC Reports: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such
financial statements and, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to normal and recurring year-end audit
adjustments which will not, individually or in the aggregate, be material in
amount); and (iii) fairly present, in all material respects, the consolidated
financial position of the Company and its consolidated subsidiaries as of the
respective dates thereof and the consolidated results of operations of the
Company and its consolidated subsidiaries for the periods covered thereby.  All
adjustments considered necessary for a fair presentation of the financial
statements have been included.
 
3.4   Securities Law Compliance.  Assuming the accuracy of the representations
and warranties of Purchaser set forth in Section 4 of this Agreement, the offer,
issue, sale and delivery of the Shares will constitute an exempted transaction
under the 1933 Act, and registration of the Note under the 1933 Act is not
required.  The Company shall make such filings as may be necessary to comply
with the Federal securities laws, which filings will be made in a timely manner
 
4.   REPRESENTATIONS AND WARRANTIES OF PURCHASER.
 
Purchaser hereby represents, warrants, and covenants with the Company as
follows:

4.1   Legal Power.  Purchaser has the requisite individual, corporate,
partnership, limited liability company, trust, or fiduciary power, as
appropriate, and is authorized, if such Purchaser is a corporation, partnership,
limited liability company, or trust, to enter into this Agreement, to purchase
the Shares hereunder, and to carry out and perform its obligations under the
terms of this Agreement.
 
4.2   Due Execution.  This Agreement has been duly authorized, if such Purchaser
is a corporation, partnership, limited liability company, trust or fiduciary,
executed and delivered by such Purchaser, and, upon due execution and delivery
by the Company, this Agreement will be a valid and binding agreement of
Purchaser.
 
4.3   Access to Information.  Purchaser represents that it has been given full
and complete access to the Company for the purpose of obtaining such information
as such Purchaser or its qualified representative has reasonably requested in
connection with the decision to purchase the Shares.  Purchaser represents that
it has received and reviewed copies of the SEC Reports. Purchaser represents
that it has been afforded the opportunity to ask questions of the officers of
the Company regarding its business prospects and the Shares, all as Purchaser or
Purchaser’s qualified representative have found necessary to make an informed
investment decision to purchase the Shares.
 
4.4   Restricted Securities.
 
4.4.1 Purchaser has been advised that none of the Shares has been registered
under the Securities Act or any other applicable securities laws and that Shares
are being offered and sold pursuant to Section 4(2) of the Securities Act and/or
Rule 506 of Regulation D thereunder, and that the Company’s reliance upon
Section 4(2) and/or Rule 506 of Regulation D is predicated in part on Purchaser
representations as contained herein. Purchaser acknowledges that the Shares will
be issued as “restricted securities” as defined by Rule 144 promulgated pursuant
to the Securities Act.  None of the Shares may be resold in the absence of an
effective registration thereof under the Securities Act and applicable state
securities laws unless, in the opinion of the Company’s counsel, an applicable
exemption from registration is available.
 
 
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4.4.2 Purchaser represents that it is acquiring the Shares for Purchaser’s own
account, and not as nominee or agent, for investment purposes only and not with
a view to, or for sale in connection with, a distribution, as that term is used
in Section 2(11) of the Securities Act, in a manner which would require
registration under the Securities Act or any state securities laws.
 
4.4.3 Purchaser understands and acknowledges that the Shares, when issued, will
bear the following legend:
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE
SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
 
4.4.4 Purchaser acknowledges that an investment in the Shares is not liquid and
is transferable only under limited conditions.  Purchaser acknowledges that such
securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available.  Purchaser is aware of the provisions of Rule 144 promulgated under
the Securities Act, which permits limited resale of restricted securities
subject to the satisfaction of certain conditions and that such Rule is not now
available and, in the future, may not become available for resale of any of the
Shares.
 
4.4.5 Purchaser is an “accredited investor” as defined under Rule 501 under the
Securities Act.  The representations made by Purchaser on the Purchaser
Signature Page are true and correct.
 
4.5   Purchaser Sophistication and Ability to Bear Risk of Loss.  Purchaser
acknowledges that it is able to protect its interests in connection with the
acquisition of the Shares and can bear the economic risk of investment in such
securities without producing a material adverse change in such Purchaser’s
financial condition.  Purchaser, either alone or with such Purchaser’s
representative(s), otherwise has such knowledge and experience in financial or
business matters that such Purchaser is capable of evaluating the merits and
risks of the investment in the Shares.
 
 
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4.6   Preexisting Relationship.  Purchaser has a preexisting personal or
business relationship with the Company, one or more of its officers, directors,
or controlling persons.
 
4.7   Purchases by Groups.  Purchaser represents, warrants and covenants that it
is not acquiring the Shares as part of a group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
 
5.   COVENANTS OF THE COMPANY.
 
5.1   Public Filings.   The Company shall file the reports required to be filed
by it under the Securities Act of 1933, as amended and the Securities Exchange
Act of 1934, as amended and the rules and regulations adopted by the Securities
and Exchange Commission thereunder, and will take such further action as
Purchaser may reasonably request, all to the extent required from time to time
to enable Purchaser to sell Shares of held by it without registration under the
Securities Act within the limitation of the exemption provided by Rule 144.
 
6.   MISCELLANEOUS.
 
6.1   Indemnification.  Purchaser agrees to defend, indemnify and hold the
Company harmless against any liability, costs or expenses arising as a result of
any dissemination of any of the Shares by Purchaser in violation of the 1933 Act
or applicable state securities law.
 
6.2   Governing Law.  This Agreement shall be governed by and construed under
the laws of the State of California.
 
6.3   Successors and Assigns.  Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
 
6.4   Entire Agreement.  This Agreement and the Exhibits hereto and thereto, and
the other documents delivered pursuant hereto and thereto, constitute the full
and entire understanding and agreement among the parties with regard to the
subjects hereof and no party shall be liable or bound to any other party in any
manner by any representations, warranties, covenants, or agreements except as
specifically set forth herein or therein.  Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto and
their respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
 
6.5   Severability.  In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, it shall to the extent practicable, be modified so as
to make it valid, legal and enforceable and to retain as nearly as practicable
the intent of the parties, and the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
 
 
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6.6   Amendment and Waiver.  Except as otherwise provided herein, any term of
this Agreement may be amended, and the observance of any term of this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Purchasers, or,
to the extent such amendment affects only one Purchaser, by the Company and such
Purchaser.  Any amendment or waiver effected in accordance with this Section
shall be binding upon each future holder of any security purchased under this
Agreement (including securities into which such securities have been converted)
and the Company.
 
6.7   Notices.  All notices and other communications required or permitted
hereunder or the Note shall be in writing and shall be effective when delivered
personally, or sent by telex or telecopier (with receipt confirmed), provided
that (other than Conversion Notices under the Note) a copy is mailed by
registered mail, return receipt requested, or when received by the addressee, if
sent by Express Mail, Federal Express or other express delivery service (receipt
requested) in each case to the appropriate address set forth below:
 

  If to the Company:  Mass Hysteria Entertainment Company, Inc.     5555 Melrose
Avenue, Swanson Building, Suite 400     Hollywood, CA  90038     Attention:
President         If to the Purchaser: At the address set forth on the
Purchaser’s Signature Page

 
6.8   Faxes and Counterparts.  This Agreement may be executed in one or more
counterparts.  Delivery of an executed counterpart of the Agreement or any
exhibit attached hereto by facsimile transmission shall be equally as effective
as delivery of an executed hard copy of the same.  Any party delivering an
executed counterpart of this Agreement or any exhibit attached hereto by
facsimile transmission shall also deliver an executed hard copy of the same, but
the failure by such party to deliver such executed hard copy shall not affect
the validity, enforceability or binding nature effect of this Agreement or such
exhibit.
 
6.9   Titles and Subtitles.  The titles of the paragraphs and subparagraphs of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth on the Purchase Signature Page hereto.
 
 
 

  PURCHASER           (By Counterpart Form - SP Pages)           COMPANY        
  MASS HYTERIA ENTERTAINMENT COMPANY, INC.            
By:
/s/      Name:  Daniel Grodnik     Title: President  

 
 
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PURCHASER SIGNATURE PAGE

The undersigned Purchaser has read the Stock Purchase Agreement dated as of
April __, 2011 and acknowledges that execution of this Purchaser Signature Page
shall constitute the undersigned’s execution of such agreement.
 
I hereby subscribe for 10,000 Shares of Series A Preferred for a purchase price
of $10,000 and hereby deliver good funds with respect to this subscription for
the Shares.

I am a resident of the Los Angeles, California.

Daniel Grodnik                                
Please print above the exact name(s) in which the Notes are to be held

My address is:

 
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Executed this ___th day April, 2011 at Los Angeles, California.

SIGNATURES
 
INDIVIDUAL
 
 

          Name             Signature (Individual)   Street address          
Address to Which Correspondence Should be Directed             Signature (All
record holders should sign)   City, State and Zip Code             Name(s) Typed
or Printed   Tax Identification or Social Security Number          
(            )      Telephone Number       Name(s) Typed or Printed (All
recorded holders should sign)          

 
 
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CORPORATION, PARTNERSHIP, TRUST ENTITY OR OTHER
 
 

    Address to Which Correspondence Should be Directed: Name of Entity          
      Type of Entity (i.e., corporation, partnership, etc.)   Street Address    
  By:                       *Signature   Tax Identification or Social Security
Number             Jurisdiction of Formation of Entity   City, State and Zip
Code             Name Typed or Printed                 Its:    
                   Title   Telephone Number; Fax Number      

 
*If Shares are being subscribed for by an entity, the Certificate of Signatory
must also be completed.
 
 
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CERTIFICATE OF SIGNATORY

To be completed if Shares is being subscribed for by an entity.

I, ______________, am the _______________of _________________ (the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and
carry out the terms of the Stock Purchase Agreement and to purchase and hold the
Shares.  The Stock Purchase Agreement has been duly and validly executed on
behalf of the Entity and constitutes a legal and binding obligation of the
Entity.

IN WITNESS WHEREOF, I have hereto set my hand this ___th day of _________, 20__.
 
 

            Signature  

 
 
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ACCEPTANCE

AGREED AND ACCEPTED:

MASS HYSTERIA ENTERTAINMENT COMPANY, INC.

By:                                                                                    
Name:  Daniel Grodnik
Title: President

Date:  April __, 2011

 
 
 
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