Mass Hysteria Entertainment Co. (fka MHYS)

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I am not sure if either of you were completely accurate. They had to raise the authorized to insure new financing.

August 3, 2011


Mass Hysteria Entertainment Company, Inc.
Attn: Dan Grodnik
8899 Beverly Blvd, Suite 710
West Hollywood, CA 90048

Dear Mr. Grodnik,

Following the engagement of Three Point Capital, LLC ("Three Point") by Mass Hysteria Entertainment Company, Inc. (“MHE”) to develop a working business plan, Three Point would like to be engaged to raise the capital necessary for MHE to execute the initial build out phase as will be described in the business plan.


Our professional fees for this engagement would be $100,000 or shares of common stock of MHE such that the common stock held by Three Point (or its designee(s)) shall equal two and one-half percent (2.5%) of the issued and outstanding common stock of MHE. The shares shall be restricted under the federal securities laws. This is on the basis of the initial raise being $1.5mm (in proceeds of cash or the customary and reasonable value of services to be provided by the investor, on terms to be mutually agreed upon among the parties). If the raise is larger or smaller than the fees will be adjusted accordingly (e.g., a raise of $3mm would have fees of $200,000 or a 5% economic interest in MHE). In addition, MHE will be responsible for reimbursing Three Point any reasonable expenses incurred in order to perform its role, not to exceed $10,000 without the prior written consent of MHE. Reasonable expenses may include travel and lodging to cities within the U.S. for client meetings.

We look forward to working with you on taking MHE to the next level. Please let us know if you have any questions or comments.


Sincerely,



Britt Fletcher
President

Agreed:



____________________________
Daniel Grodnik
Mass Hysteria Entertainment Company, Inc.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8200596

You can not assume that the company will dilute to the 300,000,000 authorized, as well as, assume a "reverse split"(part of the pre is for either a forward or reverse split..."without approval"). They do however need to have available shares to issue upon a conversion of debt. They could obtain new financing and close out the existing short term debt to Asher et al the other $60,000 held by a shareholder. You would then have an immediate cease to short term dilution and a 180 day grace period. Either or, going into something knowing possible outcomes is very important. Know what may come to market, and play it accordingly.

Following is a poor choice. Do for yourself, and there is never anything to fret about.