NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


	 	Right
    to Purchase 1,262,500,000 shares of Common Stock of MASS HYSTERIA ENTERTAINMENT COMPANY, INC.(subject to adjustment as provided
    herein)


 


Issue
Date: October 28, 2014


 


COMMON
STOCK PURCHASE WARRANT


 


THIS
CERTIFIES THAT, for value received, KBM WORLDWIDE, INC., a New York
corporation, or its registered assigns, is entitled to purchase from MASS HYSTERIA ENTERTAINMENT COMPANY, INC., a Nevada
corporation (the “Company”), at any time or from time to time during the period specified in Paragraph 2 hereof, 1,262,500,000
fully paid and non-assessable shares of the Company’s Common Stock, par value $0.00001 per share (the “Common Stock”),
at an exercise price per share equal to $0.0003 (the “Exercise Price”). The term “Warrant Shares,” as
used herein, refers to the shares of Common Stock purchasable hereunder. The Warrant Shares and the Exercise Price are subject
to adjustment as provided in Paragraph 5 hereof. The term “Warrants” means this Warrant and the other warrants issued
pursuant to that certain Securities Purchase Agreement, dated the date hereof, by and among the Company and the Buyer listed on
the execution page thereof (the “Securities Purchase Agreement”).


 


This
Warrant is subject to the following terms, provisions, and conditions:


 


1. Manner
of Exercise; Issuance of Certificates; Payment for Shares. Subject
to the provisions hereof, this Warrant may be exercised by the holder hereof, in whole or in part, by the surrender of this
Warrant, together with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”), to
the Company during normal business hours on any business day at the Company’s principal executive offices (or such
other office or agency of the Company as it may designate by notice to the holder hereof), and upon payment to the Company in
cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall
have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the
aggregate number of shares specified in the Exercise Agreement, shall be delivered to the holder hereof within a reasonable
time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered
shall be in such denominations as may be requested by the holder hereof and shall be registered in the name of such holder or
such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the
holder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.
In addition to all other available remedies at law or in equity, if the Company fails to deliver certificates for the Warrant
Shares within five (5) business days after this Warrant is exercised, then the Company shall pay to the holder in cash a
penalty (the “Penalty”) equal to 2% of the number of Warrant Shares that the holder is entitled to multiplied by
the Market Price (as hereinafter defined) for each day that the Company fails to deliver certificates for the Warrant Shares.
For example, if the holder is entitled to 100,000 Warrant Shares and the Market Price is $2.00, then the Company shall pay to
the holder $4,000 for each day that the Company fails to deliver certificates for the Warrant Shares. The Penalty shall be
paid to the holder by the fifth day of the month following the month in which it has accrued.


 




    	 



    	 



    







 


2.
Period of Exercise. This Warrant is exercisable at any time or from time to time on or after the date on which this Warrant
is issued and delivered pursuant to the terms of the Securities Purchase Agreement and before 6:00 p.m., New York, New York time
on the fifth (5th) anniversary of the date of issuance (the “Exercise Period”).


 


3.
Certain Agreements of the Company. The Company hereby covenants and agrees as follows:


 


(a)
Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued,
fully paid, and non-assessable and free from all taxes, liens, and charges with respect to the issue thereof.


 


(b)
Reservation of Shares. During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose
of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.


 


(c)
Certain Actions Prohibited. The Company will not, by amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in
the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by
the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company
(i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant.


 




    	 



    	 



    





 


(d)
Successors and Assigns. This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition
of all or substantially all the Company’s assets.


 


4.
Market Price. Market Price of a share of Common Stock as of a particular date (the “Determination Date”) shall
mean:


 


(a)
If the Company’s Common Stock is traded on an exchange or is quoted on the NASDAQ Global Market, NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange or the American Stock Exchange, LLC, then the average of the highest three
(3) closing bid prices for the Common Stock during the ten (10) trading day period ending one trading day prior to the Determination
Date;


 


(b)
If the Company’s Common Stock is not traded on an exchange or on the NASDAQ Global Market, NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange or the American Stock Exchange, Inc., but is traded on the OTC Bulletin
Board or in the over-the-counter market or Pink Sheets, then the average of the highest three (3) closing bid prices for the Common
Stock during the ten (10) trading day period ending one trading day prior to the Determination Date;


 


(c)
Except as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American
Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to
pass on the matter to be decided; or


 


(d)
If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of
the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.


 


5.
Anti-dilution Provisions. During the Exercise Period, the Exercise Price and the number of Warrant Shares shall be subject
to adjustment from time to time as provided in this Paragraph 5.


 


In
the event that any adjustment of the Exercise Price as required herein results in a fraction of a cent, such Exercise Price shall
be rounded up to the nearest cent.


 




    	 



    	 



    





 


(a)
Adjustment of Exercise Price and Number of Shares upon Issuance of Common Stock. Except as otherwise provided in Paragraphs 5(c)
and 5(e) hereof, if and whenever on or after the date of issuance of this Warrant, the Company issues or sells, or in accordance
with Paragraph 5(b) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration
per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith)
less than the Market Price on the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance,
the Exercise Price will be reduced to a price determined by multiplying the Exercise Price in effect immediately prior to the
Dilutive Issuance by a fraction, (i) the numerator of which is an amount equal to the sum of (x) the number of shares of Common
Stock actually outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of the aggregate consideration, calculated
as set forth in Paragraph 5(b) hereof, received by the Company upon such Dilutive Issuance divided by the Market Price in effect
immediately prior to the Dilutive Issuance, and (ii) the denominator of which is the total number of shares of Common Stock Deemed
Outstanding (as defined below) immediately after the Dilutive Issuance.


 


(b)
Effect on Exercise Price of Certain Events. For purposes of determining the adjusted Exercise Price under Paragraph 5(a) hereof,
the following will be applicable:


 


(i)
Issuance of Rights or Options. If the Company in any manner issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock
(“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or Convertible Securities are
hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise
of such Options is less than the Market Price on the date of issuance or grant of such Options, then the maximum total number
of shares of Common Stock issuable upon the exercise of all such Options will, as of the date of the issuance or grant of such
Options, be deemed to be outstanding and to have been issued and sold by the Company for such price per share. For purposes of
the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options”
is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance
or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Company
upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon
the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion
or exchange of Convertible Securities issuable upon exercise of such Options.


 


(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of Options) and the price per share for which Common Stock
is issuable upon such conversion or exchange is less than the Market Price on the date of issuance, then the maximum total number
of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities will, as of the date of
the issuance of such Convertible Securities, be deemed to be outstanding and to have been issued and sold by the Company for such
price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon
such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Company
as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment to the Exercise Price will be made upon the actual issuance
of such Common Stock upon conversion or exchange of such Convertible Securities.


 






    	 



    	 



    




 


(iii)
Change in Option Price or Conversion Rate. If there is a change at any time in (i) the amount of additional consideration payable
to the Company upon the exercise of any Options; (ii) the amount of additional consideration, if any, payable to the Company upon
the conversion or exchange of any Convertible Securities; or (iii) the rate at which any Convertible Securities are convertible
into or exchangeable for Common Stock (other than under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the Exercise Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or sold.


 


(iv)
Treatment of Expired Options and Unexercised Convertible Securities. If, in any case, the total number of shares of Common Stock
issuable upon exercise of any Option or upon conversion or exchange of any Convertible Securities is not, in fact, issued and
the rights to exercise such Option or to convert or exchange such Convertible Securities shall have expired or terminated, the
Exercise Price then in effect will be readjusted to the Exercise Price which would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of shares of Common Stock issued upon exercise or conversion thereof), never been
issued.


 


(v)
Calculation of Consideration Received. If any Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any Common Stock, Options or Convertible Securities are issued
or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received
by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company will be the Market Price thereof as of the date of receipt. In case any
Common Stock, Options or Convertible Securities are issued in connection with any acquisition, merger or consolidation in which
the Company is the surviving corporation, the amount of consideration therefor will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving corporation as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined in good faith
by the Board of Directors of the Company.


 




    	 



    	 



    





 


(vi)
Exceptions to Adjustments of Exercise. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities granted, issued and outstanding on the date of issuance of this Warrant; (ii) upon the grant
or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan, stock option
plan or restricted stock plan of the Company now existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of
the members of a committee of independent directors established for such purpose; or (iii) upon the exercise of the Warrants.


 


(c)
Subdivision or Combination of Common Stock. If the Company at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a greater number of shares,
then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the
date of record for effecting such combination, the Exercise Price in effect immediately prior to such combination will be proportionately
increased.


 


(d)
Adjustment in Number of Shares. Upon each adjustment of the Exercise Price pursuant to the provisions of this Paragraph 5, the
number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.


 


(e)
Consolidation, Merger, or Sale. In case of any consolidation of the Company with, or merger of the Company into any other corporation,
or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a
plan of complete liquidation of the Company, then as a condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the holder of this Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure that the provisions of this Paragraph 5 hereof
will thereafter be applicable as nearly as may be in relation to any shares of stock or securities thereafter deliverable upon
the exercise of this Warrant. The Company will not effect any consolidation, merger or sale or conveyance unless prior to the
consummation thereof, the successor corporation (if other than the Company) assumes by written instrument the obligations under
this Paragraph 5 and the obligations to deliver to the holder of this Warrant such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the holder may be entitled to acquire.


 




    	 



    	 



    





 


(f)
Distribution of Assets. In case the Company shall declare or make any distribution of its assets (including cash) to holders of
Common Stock as a partial liquidating dividend, by way of return of capital or otherwise, then, after the date of record for determining
shareholders entitled to such distribution, but prior to the date of distribution, the holder of this Warrant shall be entitled
upon exercise of this Warrant for the purchase of any or all of the shares of Common Stock subject hereto, to receive the amount
of such assets which would have been payable to the holder had such holder been the holder of such shares of Common Stock on the
record date for the determination of shareholders entitled to such distribution.


 


(g)
Upon the occurrence of any event which requires any adjustment of the Exercise Price, then, and in each such case, the Company
shall give notice thereof to the holder of this Warrant, which notice shall state the Exercise Price resulting from such adjustment
and the increase or decrease in the number of Warrant Shares purchasable at such price upon exercise, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is based. Such calculation shall be certified by the
Chief Financial Officer of the Company.


 


(h)
No Fractional Shares. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but the Company
shall pay a cash adjustment in respect of any fractional share which would otherwise be issuable in an amount equal to the same
fraction of the Market Price of a share of Common Stock on the date of such exercise.


 


(i)
Other Notices. In case at any time:


 


(i)
the Company shall declare any dividend upon the Common Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings) to the holders of the Common Stock;


 


(ii)
the Company shall offer for subscription pro rata to the holders of the Common Stock any additional shares of stock of any class
or other rights;


 


(iii)
there shall be any capital reorganization of the Company, or reclassification of the Common Stock, or consolidation or merger
of the Company with or into, or sale of all or substantially all its assets to, another corporation or entity; or


 


(iv)
there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in each such case, the
Company shall give to the holder of this Warrant (a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive any such dividend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of the date (or, if not then known, a reasonable approximation
thereof by the Company) when the same shall take place. Such notice shall also specify the date on which the holders of Common
Stock shall be entitled to receive such dividend, distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be given at least 30 days prior to the record date or the date
on which the Company’s books are closed in respect thereto. Failure to give any such notice or any defect therein shall
not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.


 




    	 



    	 



    





 


(j)
Certain Events. If any event occurs of the type contemplated by the adjustment provisions of this Paragraph 5 but not expressly
provided for by such provisions, the Company will give notice of such event as provided in Paragraph 5(g) hereof, and the Company’s
Board of Directors will make an appropriate adjustment in the Exercise Price and the number of shares of Common Stock acquirable
upon exercise of this Warrant so that the rights of the holder shall be neither enhanced nor diminished by such event.


 


(k)
Certain Definitions.


 


(i)
“Common Stock Deemed Outstanding” shall mean the number of shares of Common Stock actually outstanding (not including
shares of Common Stock held in the treasury of the Company), plus (x) pursuant to Paragraph 5(b)(i) hereof, the maximum total
number of shares of Common Stock issuable upon the exercise of Options, as of the date of such issuance or grant of such Options,
if any, and (y) pursuant to Paragraph 5(b)(ii) hereof, the maximum total number of shares of Common Stock issuable upon conversion
or exchange of Convertible Securities, as of the date of issuance of such Convertible Securities, if any.


 


(ii)
“Common Stock,” for purposes of this Paragraph 5, includes the Common Stock, par value $0.00001 per share, and
any additional class of stock of the Company having no preference as to dividends or distributions on liquidation, provided
that the shares purchasable pursuant to this Warrant shall include only shares of Common Stock in respect of which this
Warrant is exercisable, or shares resulting from any subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the character referred to in Paragraph 5(e) hereof, the
stock or other securities or property provided for in such Paragraph.


 


6.
Issue Tax. The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge
to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of
any certificate in a name other than the holder of this Warrant.


 


7.
No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the holder hereof to any voting rights or other
rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the holder hereof
to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to
any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.


 




    	 



    	 



    


 


8.
Transfer, Exchange, and Replacement of Warrant. 


 


(a)
This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant,
together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in
Paragraph 8(e) below, provided, however, that any transfer or assignment shall be subject to the conditions set forth in Paragraph
8f) hereof and to the applicable provisions of the Securities Purchase Agreement. Until due presentment for registration of transfer
on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes,
and the Company shall not be affected by any notice to the contrary.


 


(b)
Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the holder hereof
at the office or agency of the Company referred to in Paragraph 8(e) below, for new Warrants of like tenor representing in the
aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants
to represent the right to purchase such number of shares as shall be designated by the holder hereof at the time of such surrender.


 


(c)
Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.


 


(d)
Cancellation; Payment of Expenses. Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement
as provided in this Paragraph 8, this Warrant shall be promptly canceled by the Company. The Company shall pay all taxes (other
than securities transfer taxes) and all other expenses (other than legal expenses, if any, incurred by the holder or transferees)
and charges payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Paragraph 8.


 


(e)
Register. The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address
of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner
of this Warrant.


 




    	 



    	 



    





 


(f)
Exercise or Transfer Without Registration. If, at the time of the surrender of this Warrant in connection with any exercise, transfer,
or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not
be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities
or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder
or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel
are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under
said Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver
to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited
investor” as defined in Rule 501(a) promulgated under the Securities Act; provided that no such opinion, letter or status
as an “accredited investor” shall be required in connection with a transfer pursuant to Rule 144 under the Securities
Act. The first holder of this Warrant, by taking and holding the same, represents to the Company that such holder is acquiring
this Warrant for investment and not with a view to the distribution thereof.


 


9.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: 


 


If
to the Company, to:


 


MASS HYSTERIA
ENTERTAINMENT COMPANY, INC.


2920 West
Olive Avenue - Suite 208


Burbank,
CA 91505


Attn: DANIEL
GRODNIK, Chief Executive Officer


facsimile:
[enter fax number]


 


With
a copy by fax only to (which copy shall not constitute notice):


 


[enter
name of law firm]


Attn:
[attorney name]


[enter
address line 1]


[enter
city, state, zip]


facsimile:
[enter fax number]


 


If
to the Holder:


 


KBM
WORLDWIDE, INC.


80
Cuttermill Road – Suite 410


Great
Neck, NY. 11021


Attn:
Seth Kramer, President


facsimile:
[enter fax number]


 


With
a copy by fax only to (which copy shall not constitute notice):


 


Naidich
Wurman Birnbaum & Maday, LLP


Attn:
Judah A. Eisner, Esq.


Attn:
Bernard S. Feldman, Esq.


facsimile:
516-466-3555


e-mail:
dyork@nwbmlaw.com


 




    	 



    	 



    


 


10.
Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state of New York
and county of Nassau. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum
non conveniens. The Company and Holder waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this
Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified
to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other
Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.


 


11.
Miscellaneous. 


 


(a)
Amendments. This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the
holder hereof.


 


(b)
Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions hereof.


 


(c)
Cashless Exercise. Notwithstanding anything to the contrary contained in this Warrant, this Warrant may be exercised by presentation
and surrender of this Warrant to the Company at its principal executive offices with a written notice of the holder’s intention
to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such exercise
in accordance with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the holder shall surrender this Warrant for that number of shares of Common Stock determined by multiplying
the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference
between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominator of which shall
be the then current Market Price per share of Common Stock. For example, if the holder is exercising 100,000 Warrants with a per
Warrant exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share
is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock.


 




    	 



    	 



    





 


(d)
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder,
by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the holder shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.


 


IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.


 





MASS
HYSTERIA ENTERTAINMENT COMPANY, INC.


 


	By:	/s/
    Daniel Grodnik	 
	 	DANIEL GRODNIK	 
	 	Chief Executive
    Officer