Document:

Exhibit

Exhibit 10.1

CLUBCORP USA, INC. CHANGE OF CONTROL SEVERANCE PLAN
And Summary Plan Description
Effective July 9, 2017

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Exhibit 10.1

	
					
	TABLE OF CONTENTS

	 
	 
	 
	 

	ARTICLE I TITLE AND DEFINITIONS
	2
	

	 
	 
	 
	 

	 
	1.1
	Title
	2
	

	 
	1.2
	Definitions
	2
	

	 
	 
	 
	 

	ARTICLE 2 PARTICIPATION
	7
	

	 
	 
	 
	 

	ARTICLE 3 SEVERANCE PAYMENT
	7
	

	 
	 
	 
	 

	 
	3.1
	Time of payment
	7
	

	 
	3.2
	Other Severance Provions
	8
	

	 
	 
	 
	 

	ARTICLE 4 ADDITIONAL BENEFITS
	8
	

	 
	 
	 
	 

	ARTICLE 5 HEALTH CARE COVERAGE CONTINUATION
	9
	

	 
	 
	 
	 

	ARTICLE 6 ADMINISTRATION
	10
	

	 
	 
	 
	 

	 
	6.1
	Powers and Duties of the Administrator
	10
	

	 
	6.2
	Construction and Interpretation
	11
	

	 
	6.3
	Information
	12
	

	 
	6.4
	Compensation, Expenses and Indemnity
	12
	

	 
	 
	 
	 

	ARTICLE 7 MISCELLANEOUS
	13
	

	 
	 
	 
	 

	 
	7.1
	Unsecured General Creditor
	13
	

	 
	7.2
	Restriction Against Assignment
	13
	

	 
	7.3
	Withholding
	14
	

	 
	7.4
	Amendment, Modification, Suspension or Termination
	14
	

	 
	7.5
	Governing Law
	15
	

	 
	7.6
	Receipt or Release
	15
	

	 
	7.7
	Payments on Behalf of Persons Under Incapacity
	16
	

	 
	7.8
	Headings
	16
	

	 
	7.9
	Statement of ERISA Rights
	16
	

	 
	7.10
	Claims Procedure
	19
	

	 
	7.11
	Plan Information
	22
	

	 
	7.12
	Code Section 409A
	24
	

ii

Exhibit 10.1

CLUBCORP USA, INC. CHANGE OF CONTROL SEVERANCE PLAN

WHEREAS, ClubCorp USA, Inc. (the “Company”), has established this ClubCorp, Inc. Change of Control Severance Plan (the “Plan”), effective July 9, 2017 (the “Effective Date”), for the benefit of certain Eligible Employees.  The purpose of this Plan is to provide severance benefits to Participants who experience a qualifying termination in connection with a Change of Control occurring on or after the Effective Date.
NOW, THEREFORE, the Plan is hereby established, on the terms and conditions hereinafter set forth:

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Exhibit 10.1

ARTICLE 1  
TITLE AND DEFINITIONS
1.1    Title.
This Plan shall be known as the ClubCorp USA, Inc. Change of Control Severance Plan.
1.2    Definitions.
Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.
 “Administrator” shall mean ClubCorp USA, Inc. and its successors, including without limitation any purchaser of a majority of its assets.
“Annual Base Pay” shall mean the annual rate of base pay in effect for a Participant immediately prior to the Change of Control or (if greater) the annual rate of base pay in effect at the time of a Participant Triggering Termination, as shown on the payroll records of the Company.  Without limiting the generality of the foregoing, Annual Base Pay does not include bonuses, non-cash compensation or other non-base compensation.  
“Base Pay Severance” shall have the meaning set out in the Appendix.
 “Board” shall mean the Board of Directors of Holdings.
“Bonus Severance” shall have the meaning set out in the Appendix.
“Cause” shall mean any occurrence of the following: (a) the Participant’s engagement in any personal misconduct involving willful dishonesty, illegality, or moral turpitude that is materially detrimental to the business interests, reputation or goodwill of the Company; (b) the Participant’s engagement in any act involving willful dishonesty, disloyalty, or infidelity against 

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Exhibit 10.1

the Company;  (c) the Participant’s willful and continued material breach or failure to perform under any policy established by the Company with respect to the operation of the Company’s business and affairs, or the conduct of the Company’s employees; or (d) the Participant’s failure to substantially perform his or her reasonably assigned duties, but only if such failure remains uncured, in the sole discretion of the Company, thirty (30) days after the Company has provided written notice to the Participant identifying the specific performance deficiency (or deficiencies).  For purposes of this definition of Cause, no act or failure to act by the Participant shall be considered “willful” unless it occurs without a good faith belief that such act or failure to act was in, or not contrary to, the best interests of the Company.
“Company” shall mean ClubCorp USA, Inc., any successor company and each company which is a member of a controlled group of corporations (within the meaning of Code section 414(b)) of which ClubCorp USA, Inc. is a component member.  
“Change of Control” means the event that is deemed to have occurred upon:  
(a)    a dissolution or liquidation of Holdings;
(b)    a merger or consolidation (other than a merger effecting a re-incorporation of Holdings in another state or any other merger or a consolidation in which the shareholders of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the shareholders of Holdings and their proportionate interests therein immediately prior to the merger or consolidation) in which Holdings is not the surviving corporation (or survives only as a subsidiary of another corporation in a transaction in which the shareholders of the parent of Holdings and their proportionate interests therein 

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Exhibit 10.1

immediately after the transaction are not substantially identical to the shareholders of Holdings and their proportionate interests therein immediately prior to the transaction); provided, that the Board may at any time prior to such a merger or consolidation provide by resolution that the foregoing provisions of this parenthetical shall not apply if a majority of the board of directors of such parent immediately after the transaction consists of individuals who constituted a majority of the Board immediately prior to the transaction); or
(c)    a transaction in which any person becomes the owner of fifty percent (50%) or more of the total combined voting power of all classes of stock of Holdings; provided that the Board may at any time prior to such transaction provide by resolution that this Subsection shall not apply if such acquiring person is a corporation and a majority of the board of directors of the acquiring corporation immediately after the transaction consists of individuals who constituted a majority of the Board immediately prior to the acquisition of such fifty percent (50%) or more total combined voting power.
“Closing Date” shall mean the date upon which a consummation of a Change of Control occurs.
“Club Benefits” shall have the meaning set out in the Appendix.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Effective Date” shall mean the date set forth above.
“Eligible Employee” shall mean an employee of the Company, or its affiliate ClubCorp Financial Management Corp., whose Level/Grade is as a Senior Vice President or higher; provided, 

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Exhibit 10.1

that the term Eligible Employee shall not include any employee of the Company who previously has executed a Change in Control Severance Agreement with Holdings.
 “Holdings” shall mean ClubCorp Holdings, Inc.
“Level/Grade” shall mean the corporate title, as shown on the Company’s payroll records. 
“Outplacement Services” shall have the meaning set out in the Appendix.
“Partial Year Bonus” shall have the meaning set out in the Appendix.
“Participant” shall mean an Eligible Employee who participates in this Plan pursuant to Article 2.
“Plan” shall mean the ClubCorp USA, Inc. Change of Control Severance Plan set forth herein, in effect as of the Effective Date, or as amended from time to time.
“Plan Year” shall mean the twelve (12) consecutive month period beginning on January 1.
 “Severance Calculation Period” shall have the meaning set out in the Appendix.
“Severance Payment” shall have the meaning set out in the relevant Appendix; provided, that a Participant is not entitled to a Severance Payment under the Plan unless and until such Participant properly executes a Severance Payment and Release Agreement and any applicable rescission period has expired.
“Severance Payment and Release Agreement” shall mean a payment and release agreement in the form designated by the Company.
“Substantially Similar Position” shall mean a position within the Company in which:
(a)    the new position is substantially similar in level of responsibility to the Participant’s prior position;

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Exhibit 10.1

(b)    the Annual Base Pay for the new position is not more than ten percent (10%) less than the Annual Base Pay for the Participant’s prior position; and
(c)    the location of the new position is within reasonable commuting distance (not more than fifty (50) miles) from the location of the Participant’s prior position.
In addition to the foregoing and not by way of limitation, a Participant will be deemed to have been offered a Substantially Similar Position if such Participant has the option of remaining in the position such Participant held prior to the Closing Date for a period of at least one (1) year after the Closing Date, with the same level of responsibility, the same Annual Base Pay and in the same location.
“Triggering Termination” shall mean the Participant’s termination of employment by the Company as the result of the Closing Date of a Change of Control where such Participant’s last day of employment is no later than one (1) year of the Closing Date; provided, that a termination for Cause is not a Triggering Termination, and provided further that the Participant did not decline an offer of a Substantially Similar Position.  
"Triggering Termination Date" shall mean the Participant's last day of employment as a result of a Triggering Termination.
“Year of Service” shall mean the twelve (12) month period beginning on the date the Participant was hired by the Company and ending on the anniversary of that date each following year; provided, that the Participant remains employed by the Company on that date.  Bridge in Service will be recognized for purposes of calculating Years of Service. Accordingly, if a Participant 

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Exhibit 10.1

has worked for the Company following such Participant’s return to the Company for a longer amount of time than the period between such Participant‘s date of return to the Company and the last date on which the Participant was employed by the Company prior to such date of return, then whole years of such Participant’s prior service will be counted for purposes of calculating Years of Service.
ARTICLE 2   
PARTICIPATION
Each Eligible Employee shall automatically participate in this Plan; provided, that only a Participant who suffers a Triggering Termination is eligible for a Severance Payment.

ARTICLE 3   
SEVERANCE PAYMENT
3.1    Time of Payment.
In the event a Participant suffers a Triggering Termination, such Participant shall receive Severance Payment as follows:  
The portion of the Severance Payment attributable to Base Pay Severance and Bonus Severance, if any, will be paid no later than the regular payday next following the fifth (5th) business day after receipt by the Company of the Participant’s properly executed Severance Payment and Release Agreement; provided, that such payment will not be paid until after the end of any applicable rescission period (without the executed Severance Payment and Release Agreement having been revoked).

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Exhibit 10.1

The portion of the Severance Payment attributable to Partial Year Bonus, if any, will be paid no later than the later than March 15th of the year following the Triggering Termination Date; provided, that such payment will not be paid until after the end of any applicable rescission period (without the executed Severance Payment and Release Agreement having been revoked).
 Other Severance Provisions.
The Participant must pay any money owed to the Company and return all Company-owned property.  Any monies owed to the Company, if not paid, will be deducted from the Participant’s Severance Payment.
The Severance Payment is in lieu of notice that the Participant’s employment will end, and therefore the Participant may not be considered or reported as eligible for unemployment compensation for the period of time covered by any Severance Payment received.

ARTICLE 4   
ADDITIONAL BENEFITS
A Participant shall also be entitled to the Club Benefits and Outplacement Services, if any, upon a Triggering Termination.    
Participants will be paid all wages earned through their last day worked in accordance with applicable law.  Participants will be paid for any earned and/or accrued but unused vacation, up to a maximum of twenty (20) days, as provided in the Company’s employee handbook.  Vacation will be paid in accordance with the Company’s vacation policy.  Any benefits/rights under the following plans/agreements will be governed by such plans/agreements:  the Individual Investment 

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Exhibit 10.1

Plan, Long Term Disability Program, the Group Term Life and Accidental Death and Dismemberment Insurance, the Supplemental Life Insurance, the 2012 Amended and Restated Stock Plan and any stockholder agreements.

ARTICLE 5   
HEALTH CARE COVERAGE CONTINUATION
In the event a Participant who suffers a Triggering Termination elects under Code Section 4980B to continue health care coverage under the Company’s Health Benefits Plan or the voluntary vision and dental plans, such Participant will be required to pay the premiums for that coverage, but a portion of such premiums will be reimbursed by the Company for a period of time equal to the Severance Calculation Period (beginning on the date such premiums begin) or until the Participant secures other employment such that the Participant shall continue to pay the same amount of monthly premium as in effect for an active employee with the same coverage. Notwithstanding the foregoing, (1) if any plan pursuant to which the Company is providing such coverage is not, or ceases prior to the expiration of the Severance Calculation Period to be, exempt from the application of Code Section 409A under Treasury Regulation Section 1.409A-1(a)(5), or (2) the Company is otherwise unable to continue to cover the Participant under its group health plans or the continuation of such coverage would result in adverse tax consequences for the Participant or the imposition of fines or penalties on the Company, then, in either case, an amount equal to the difference between the full monthly COBRA premium payment and the current monthly premium the Participant would have paid as an active employee shall thereafter be paid to the 

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Exhibit 10.1

Participant as currently taxable compensation in substantially equal monthly installments over the Continuation Period, or the remaining portion thereof (and such payment shall be paid to the Participant on a fully tax grossed up basis).
ARTICLE 6   
ADMINISTRATION
6.1    Powers and Duties of the Administrator.  
(a)    The Administrator, on behalf of the Participants and their beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:
(i)    To construe and interpret the terms and provisions of this Plan and to make factual determinations;
(ii)    To compute and certify to the amount and kinds of benefits payable to Participants;
(iii)    To maintain all records that may be necessary for the administration of the Plan;
(iv)    To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants or governmental agencies as shall be required by law;
(v)    To make and publish such rules for the regulation of the Plan and procedures 

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Exhibit 10.1

for the administration of the Plan as are not inconsistent with the terms hereof;
(vi)    To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Administrator may from time to time prescribe
(vii)    To correct any defect or supply any omission or reconcile any inconsistency in the Plan; and
(viii)    To determine who shall be a Participant.
6.2    Construction and Interpretation.  
(a)    The Administrator shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to, the Company and any Participant or any beneficiary.  The Administrator shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.
(b)    Nothing contained in the Plan shall be construed to prevent the Company from taking any action which is deemed by it to be appropriate or in its best interest.  No Participant, beneficiary, or other person shall have any claim against the Company as a result of such action.  Any decisions, actions or interpretations to be made under the Plan by the Company or the Board, or the Administrator acting on behalf of the Company, shall be made in its respective sole discretion, not as a fiduciary, need not be uniformly applied to similarly situated individuals and shall be final, binding and conclusive on all persons interested in the Plan.

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Exhibit 10.1

6.3    Information.  
To enable the Administrator to perform its functions, the Company shall supply full and timely information to the Administrator on all matters relating to all Participants, their death, or other cause of termination, and such other pertinent facts as the Administrator may require.
6.4    Compensation, Expenses and Indemnity.  
(a)    The Administrator is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the administration of the Plan shall be paid by the Company.
(b)    To the extent permitted by applicable state law, the Company shall indemnify and save harmless the Administrator and each member thereof, the Board and any delegate of the Administrator who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct.  This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.

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Exhibit 10.1

ARTICLE 7   
MISCELLANEOUS
7.1    Unsecured General Creditor.  
Participants and their beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company.  No assets of the Company shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  Any and all of the Company’s assets shall be, and remain, the general unpledged, unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and beneficiaries shall be no greater than those of unsecured general creditors.
7.2    Restriction Against Assignment.  
The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation.  No Participant shall be liable for the debts, contracts, or engagements of any Participant, his or her beneficiary, or successors in interest, nor shall Participant’s benefits under this Plan be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.  If any Participant, beneficiary or successor-in-interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or 

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Exhibit 10.1

charge any distribution or payment from the Plan, voluntarily or involuntarily, the Administrator, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, beneficiary or successor-in-interest in such manner as the Administrator shall direct.
7.3    Withholding.  
There shall be deducted from each payment made under the Plan or other compensation payable to the Participant (or beneficiary) all taxes which are required to be withheld by the Company in respect to such payment of the Plan.  The Company shall have the right to reduce any payment (or other compensation) by the amount of cash sufficient to provide the amount of said taxes.
7.4    Amendment, Modification, Suspension or Termination.  
Prior to the Closing Date, the Board may at any time, or from time to time, in its sole discretion amend or terminate the Plan in any manner that the Board deems appropriate, including amending or terminating all or any portion of the Plan, if necessary or appropriate to comply with changes to applicable law, without the consent of any Participant.  During the one-year period following the Closing Date, no such amendment or termination is permitted if it decreases or impairs the rights of Participants under the Plan.

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Exhibit 10.1

7.5    Governing Law.  
It is intended that the Plan be an “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA, and the Plan shall be administered in a manner consistent with such intent.  The Plan and all rights hereunder shall be governed, construed and interpreted in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent not preempted by federal law, the laws of the State of Texas.
7.6    Receipt or Release.  
Any payment to a Participant or the Participant’s beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Administrator and the Company.  The Administrator may require such Participant or beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect, including but not limited to a Severance Payment and Release Agreement.
Severance offers will generally remain open until twenty-one (21) days after the Participant’s receipt of the Severance Payment and Release Agreement, unless a longer period is required under the Older Workers Benefit Protection Act.  If the Severance Payment and Release Agreement has not been fully executed and received by the Company by that date, the offer in the Severance Payment and Release Agreement, including but not limited to the benefits available under this Plan (if any), will automatically expire and be withdrawn without further notice to the Participant, and without further action required by the Company.

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Exhibit 10.1

7.7    Payments on Behalf of Persons Under Incapacity.  
In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Administrator, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Administrator may direct that such payment be made to any person found by the Administrator, in its sole judgment, to have assumed the care of such person .  Any payment made pursuant to such determination shall constitute a full release and discharge of the Administrator and the Company.
7.8    Headings.  
Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.
7.9    Statement of ERISA Rights.  
Participants in the Plan are entitled to certain rights and protections under ERISA.  ERISA provides that all Participants shall be entitled to:
		
	1)
	Examine, without charge, at the Administrator’s office and at other specified locations, such as worksites and union halls, all documents governing the Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

		
	2)
	Obtain, upon written request to the Administrator, copies of documents governing the operation of the Plan, including insurance contracts and collective bargaining 

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Exhibit 10.1

agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description.  The Administrator may make a reasonable charge for the copies.
		
	3)
	Receive a summary of the Plan’s annual financial report.  The Administrator is required by law to furnish each Participant with a copy of this summary annual report.

In addition to creating rights for Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan.  The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of all Plan Participants and beneficiaries.  No one, including the Company, a union, or any other person, may fire a Participant or otherwise discriminate against a Participant in any way to prevent a Participant from obtaining a pension benefit under the Plan or for exercising his or her rights under ERISA.
If a Participant’s claim for a pension benefit is denied or ignored, in whole or in part, such Participant has a right to know why this was done, to obtain copies of documents relating to the decisions without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps a Participant can take to enforce the above rights.  For instance, if a Participant requests a copy of plan documents or the latest annual report from the Plan and does not receive them within thirty (30) days, the Participant may file suit in a Federal court.  In such a case, the court may require the Administrator to provide the materials and pay the Participant up to $110 a day until the Participant receives the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.  If a Participant has a claim for benefits 

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Exhibit 10.1

which is denied or ignored, in whole or in part, the Participant may file suit in a state or Federal court after exhausting all administrative appeals provided under the Plan.  If it should happen that the Plan fiduciaries misuse the Plan’s assets, or if a Participant is discriminated against for asserting his or her rights, the Participant may seek assistance from the U.S. Department of Labor, or may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If the Participant is successful, the court may order the person who was sued to pay these costs and fees.  If the Participant loses, the court may order the Participant to pay these costs and fees, for example, if it finds his or her claim is frivolous.
If a Participant has any questions about your Plan, he or she should contact the Administrator.  If a Participant has any questions about this statement or about his or her rights under ERISA, or if assistance is needed in obtaining documents from the Administrator, the Participant should contact the nearest office of the Employee Benefits Security Administration at the U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  Participants may also obtain certain publications about their rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

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Exhibit 10.1

7.10    Claims Procedure.  
Normally, whenever you or your beneficiary becomes entitled to receive benefits under the Plan, procedures will automatically be initiated to provide for the payment of such benefits.
If you are not contacted when you become entitled to benefits, or if you have any questions or concerns about actions taken by the Administrator, you may file a written claim with the Administrator for the benefits to which you (or your beneficiary) feel entitled.  In addition, if you (or your beneficiary) feel you are being denied any benefit or right provided under the Plan, you (or your beneficiary) (as the “Claimant”) must file a written claim with the Administrator.  All such claims shall be submitted on a form provided by the Administrator which shall be signed by the Claimant and shall be considered filed on the date the claim is received by the Administrator.
The Administrator will respond to a claim for benefits within ninety (90) days after it receives such claim, unless special circumstances require an extension of time for processing the claim.  If an extension is required, the Claimant will be notified, in writing, of such extension prior to the termination of the initial ninety (90) day period.  If an extension is required, the Administrator will notify Claimant of a decision no later than one hundred and eighty (180) days after the claim for benefits is filed.
Any time a claim for benefits is denied by the Administrator in whole or in part, the Administrator will notify the Claimant in writing.  The notification will set forth:  (i) the specific reason or reasons for the adverse determination, (ii) the specific reference to Plan provisions on which the determination is based, (iii) a description of any additional material or information necessary for the Claimant to perfect his claim and an explanation of why such material or 

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Exhibit 10.1

information is necessary, (iv) information as to the steps to be taken if the Claimant wishes to submit a request for review, including applicable time limits, and (v) the Claimant’s right to bring a civil action under Section 502(a) of ERISA.
If the Claimant disagrees with the denial of benefits, the Claimant or his authorized representative must submit an appeal.  A Claimant must exhaust the Plan’s appeal procedures before the Claimant can pursue any action in federal district court to have the Plan’s decision reviewed. Any appeal of an adverse benefit determination must be submitted in writing to the Administrator within sixty (60) days after receipt of the Administrator’s notice of an adverse benefit determination, requesting that the Administrator review the claim.  With the request for appeal, the Claimant may also submit additional written comments, documents, records, and other information relating to his claim for benefits.  In conducting its review, the Administrator shall consider any written statement or other evidence presented by the Claimant or his authorized representative in support of his claim, regardless as to whether this information was submitted or considered in the initial benefit determination.  The Administrator shall give the Claimant and his authorized representative reasonable access to all pertinent documents necessary for the preparation of his claim.
If a Claimant fails to appeal within sixty (60) days of receiving the Administrator’s notice of a denial of benefits, the Administrator’s determination will be final, binding, and conclusive.
The Administrator will respond to a written application for review of a claim within sixty (60) days after it receives such written application, unless special circumstances require an extension of time for processing the claim.  If an extension is required, the Claimant will be notified, in writing, of such extension prior to the termination of the initial sixty (60) day period.  If an 

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Exhibit 10.1

extension is required, the Administrator will notify Claimant of a decision on appeal no later than one hundred and twenty (120) days after the claim for benefits is filed.
The Administrator’s notification of decision on appeal will contain: (i) the specific reason or reasons for the denial, (ii) specific references to Plan provisions on which the benefit determination is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all material and required information relevant to the claim for benefits, (iv) a statement describing any voluntary appeals offered by the Plan, including information concerning the procedures of the voluntary appeal that would allow the Claimant to make an informed decision about whether to appeal and such other information which the Administrator determines is appropriate regarding alternative dispute resolution options, and (v) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.
7.10A    Limitations on Pursuing Claims in Court.
If a Claimant has exhausted all administrative appeals under Section 7.10, and desires to have a court review the Plan’s decision, the Claimant must file a complaint in federal district court within one (1) year of the Plan’s issuance of its final denial on appeal under Section 7.10. Failure to file a complaint within such one (1) year period shall preclude and foreclose the Claimant from pursuing such action in court.

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Exhibit 10.1

7.11    Plan Information.  
Plan Name
The official name of the Plan is the “ClubCorp USA, Inc. Change of Control Severance Plan.”
Plan Sponsor and Plan Administrator

ClubCorp USA, Inc.
Attn:  People Strategy Department
3030 LBJ Freeway, Suite 600
Dallas, Texas  75234-7703
(972) 243-6191

Tax Identification Number:  75-2114856
Plan Year
For the purpose of maintaining the Plan’s financial records, the Plan Year is January 1st through December 31st.
Plan Identification Number
Plan No.: 503
Type of Plan
The Plan is a severance pay plan that is a welfare benefit plan under ERISA.
Where to Serve Legal Process
ClubCorp USA, Inc.
Attn:  General Counsel
3030 LBJ Freeway, Suite 600
Dallas, Texas  75234-7703

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Exhibit 10.1

Participating Employers

ClubCorp Financial Management Corp. The Plan may be maintained by other Affiliates of the Company. You may obtain a complete list of the Affiliates who adopted the Plan by submitting a written request for such list to the Administrator.

Type of Administration

The Plan is administered by the Company.

Source of Contributions

The Plan is funded by the Company.  There is no fund set aside.  The benefits are paid out of the Company’s general assets. 

You Lose Eligibility For Benefits If:

		
	•
	You are terminated for Cause;

		
	•
	Your employment continues for more than one (1) year after the Change in Control occurs; or

		
	•
	You decline an offer of a Substantially Similar Position.

 

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Exhibit 10.1

7.12    Code Section 409A.  
The Plan is intended to comply with the applicable requirements, if any, of Code Section 409A and its corresponding regulations and related guidance, and shall be administered in accordance with Code Section 409A to the extent Code Section 409A applies to the Plan.  Notwithstanding any provision of the Plan to the contrary, to the extent applicable, payments from the Plan may only be made in a manner and upon an event permitted by Code Section 409A. To the extent that any provision of the Plan would cause a conflict with the requirements of Code Section 409A, or would cause the administration of the Plan to fail to satisfy the requirements of Code Section 409A (without penalty), such provision shall be deemed null and void to the extent permitted by applicable law.

IN WITNESS WHEREOF, the Company has caused this document to be executed by its duly authorized officer on this __ day of ______________, 2017.

CLUBCORP USA, INC.

By:                             
Its: ________________________________

24

Exhibit 10.1

Appendix

“Base Pay Severance” shall mean an amount equal to one (1) times the Participant’s Annual Base Pay.
“Bonus Severance” shall mean an amount equal to the Participant’s last full year bonus earned.
“Club Benefits” shall mean the Participant’s benefits under the Club Memberships.
“Club Memberships” shall mean the ability of a Participant to request to be granted privileges at a specific club, with the specific club subject to approval by the Chief Executive Officer of ClubCorp USA, Inc.  With these club privileges, ID is waived, the “membership” is dues free for five (5) years, and there are no other discounts associated with these privileges.  These privileges cannot be transferred or sold, and if the Participant wishes to retain these privileges at the end of the five-year period, the Participant will be responsible for paying the appropriate dues.  The Participant must abide by all rules and regulations and pay all charges in a timely manner to retain these privileges.
“Outplacement Services” shall mean outplacement services not to exceed $10,000.  No cash will be offered in lieu of the Outplacement Services.
“Partial Year Bonus” shall mean an amount equal to any bonus earned but unpaid under the Company’s annual incentive plan with respect to the fiscal year during which the Triggering Termination occurs, paid on a prorated basis for the period of employment by multiplying the bonus by a fraction, the numerator of which is the number of days in the fiscal year through the  date of 

1

Exhibit 10.1

the Triggering Termination, and the denominator of which is 365 plus a discretionary amount being reasonably determined by the Company, payable when such bonus would have ordinarily been paid in accordance with the Company’s incentive plan, and disregarding any requirement of being employed on the date of payment;
 “Severance Calculation Period” shall mean the number of months of a Participant’s Annual Base Pay represented by the amount of the Participant’s Base Pay Severance.
“Severance Payment” shall mean, subject to (a) and (b) below, the sum of a Participant’s Base Pay Severance, Bonus Severance and/or Partial Year Bonus to which a Participant is entitled under this Plan (if any).
(a)    Notwithstanding any provision of the Plan to the contrary, including without limitation the immediately preceding sentence, if the Company has entered into an employment agreement with any Participant, or if the Participant is entitled to a severance benefit under any other plan or program sponsored by the Company, pursuant to which the Participant is entitled to and receives a severance payment equal to or greater than the Severance Payment to which the Participant would otherwise be entitled under this Plan, the Participant will not be eligible for a Severance Payment under this Plan.  
(b)    Notwithstanding any provision of the Plan to the contrary, including without limitation the first sentence of this definition of Severance Payment, if the Company has entered into an employment agreement with any Participant, or if the Participant is entitled to a severance benefit under any other plan or program sponsored by the Company, pursuant to which the Participant is entitled to and receives a severance payment which is less than the Severance Payment to which 

2
4833-3009-9524v.1 
55899-1 2/27/2017

Exhibit 10.1

the Participant would otherwise be entitled under this Plan, the Participant’s Severance Payment under this Plan will be an amount equal to the excess of (i) the Severance Payment to which the Participant would otherwise be entitled under this Plan except for the operation of this section (b), over (ii) the payment made under the employment agreement or other plan or program.

3
4833-3009-9524v.1 
55899-1 2/27/2017SETTLEMENT
AGREEMENT

AND MUTUAL GENERAL RELEASE

 

This
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE (hereinafter the “Settlement Agreement” or the “Agreement”),
is entered into as of the 23rd day of June, 2017 (hereinafter the “Effective Date”), between and among Auctus Fund,
LLC (hereinafter “Auctus” or the “Fund”), a Delaware limited liability company, on the one hand, and Textmunication
Holdings, Inc. (hereinafter “TXHD” or the “Company”), a Nevada corporation (collectively hereinafter the
“Parties”), on the other hand.

 

WHEREFORE,
on July 22, 2016, the Company entered into a Securities Purchase Agreement (hereinafter the “SPA” or the “Purchase
Agreement”) and a Convertible Promissory Note (hereinafter the “Note”) with the Fund;

 

WHEREFORE,
the Fund has alleged that the Company failed and refused to allow it to convert all or portions of the debt, as represented by
the Note, into shares of common stock of TXHD, causing an Event of Default by the Company under the Purchase Agreement and the
Note;

 

WHEREFORE,
the Fund has filed an action in the United States District Court for the District of Massachusetts, styled as Auctus Fund,
LLC v. Textmunication Holdings, Inc., Dkt. No. 1:17-CV-10504-IT (D. Mass.)(Talwani, J.)(hereinafter the “Litigation”),
alleged, inter alia, breaches of the Purchase Agreement and the Note;

 

WHEREFORE,
the Fund and the Company have determined it to be in their mutual interests to amicably resolve outstanding business matters,
including any and all potential disputes, claims, and all matters which have been or could have been alleged by Auctus or, which
have been or could have been alleged by the Company;

 

NOW
THEREFORE, as of the Effective Date of this Agreement and in consideration of the premises and the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Parties agree as follows:

 

1.
Settlement Purpose. The Parties agree and acknowledge that they understand that this Agreement is entered into solely
for the purpose of avoiding the possible future expenses, burdens or distractions of a continuing dispute or litigation. The Parties
further agree and acknowledge that the execution of this Settlement Agreement does not constitute an admission by any of the Parties
of any liability of any kind or of any wrongdoing by any entity or individual, and the Parties each specifically deny any and
all liability or wrongdoing.

 

2.
Consideration / Conversion to Company Common Stock. a) In consideration for the release, covenants, terms and conditions
of this Settlement Agreement, the receipt and sufficiency of which is hereby acknowledged, the Company agrees to irrevocably authorize
and reserve Five Hundred – Fifty Million (550,000,000) shares (hereinafter the “Settlement Shares”) of the common
stock of the Company (hereinafter the “Common Stock”) for issuance upon full conversion of the outstanding obligations
of the Company, in accordance with the terms hereof (including but not limited to the beneficial ownership limitations contained
in the Note) and the Leak-Out Agreement, as contemporaneously executed herewith, in the form attached hereto as Exhibit
A.

 

    	 	1 of 42	 

    	 		 

    

 

b)
The Company agrees to deliver to its transfer agent, Worldwide Stock Transfer, LLC (hereinafter the “Transfer Agent”),
an irrevocable letter of instruction (hereinafter the “Irrevocable Letter of Instruction”), in the form attached hereto
as Exhibit B, authorizing and instructing the Transfer Agent to reserve, issue and deliver such share of the Company’s
Common Stock as contemplated herein, and for the full conversion of such Common Stock, and for the registration and issuance in
the names of the registered holder, for the benefit of the Fund, of the securities as submitted for conversion or exercise.

 

c)
Upon the Effective Date, the Company shall file and deliver such documents, instruments and/or otherwise to increase the amount
of Common Stock in reserve to a sufficient amount to guarantee full availability for the conversion of the full amount of the
Settlement Shares by the Fund.

 

d)
The Company agrees and acknowledges that the ability of the Fund to convert the outstanding obligations in a timely manner is
a material obligation of this Settlement Agreement and agrees to irrevocably authorize and instruct its Transfer Agent and such
officers, directors and others to guarantee the availability of sufficient reserve shares of the Common Stock of the Company to
accommodate, at times relevant hereto, a Conversion Notice from the Fund, and without further action by the Company.

 

3.
General Release of All Claims by The Company.

 

a)
Textmunication Holdings, Inc., on its own behalf and on behalf of its predecessors, parents, affiliates, subsidiaries, divisions,
successors and assigns, and its respective trustees, officers, directors, agents, representatives, employees, principals, shareholders,
heirs, executors, administrators, attorneys, and assigns (collectively the “TXHD Releasors”), hereby release Auctus
Fund, LLC, Auctus Private Equity Fund, LLC, Alfred Sollami, and Louis Posner, and their respective predecessors, parents, affiliates,
subsidiaries, divisions, successors and assigns, and their respective trustees, officers, directors, agents, representatives,
employees, principals, shareholders, heirs, executors, administrators, attorneys, and assigns (collectively hereinafter the “Auctus
Releasees”), from any and all liability, actions, claims, damages, expenses or costs of whatever nature, including but not
limited to compensatory damages, punitive damages, equitable relief and attorneys’ fees and costs, related to or arising
out of the Purchase Agreement, the Note and/or business relationship between and among the Fund and the Company. The Parties agree
that this release of claims is intended to be a broadly construed “General Release” and includes any dispute, action
or claim that is known or unknown to the TXHD Releasors, including but not limited to, claims based on a breach of an express
or implied contract; breach of the covenant of good faith and fair dealing; any action arising in tort, including, but not limited
to, securities fraud, fraud and deceit, negligent misrepresentation, libel, slander, defamation, and/or any other claims arising
from intentional or negligent misconduct; and any and all other claims arising under Chapters 93A, or other Chapters of the Massachusetts
General Laws, all as amended, and any other federal, state or local statute, law, or ordinance, concerning the terms and conditions
of the Purchase Agreement, the Note and/or the business relationship, the performance under the Purchase Agreement, the Note and/or
the business relationship; and any claim arising under common law or by public policy, except claims or proceedings necessary
to enforce the provisions of this Agreement and claims that cannot be waived as a matter of law. It is understood and agreed that
this Agreement constitutes a full and final release covering all known, unknown, anticipated and unanticipated injuries, debts,
claims or damage that the TXHD Releasors have, which have arisen, or which may have arisen, in connection with the Purchase Agreement,
the Note and/or the business relationship between the Fund and the Company, as well as those injuries, debts, claims or damages
not known or disclosed which have arisen, or may have arisen, from said business dealings, up to the date that the TXHD Releasors
sign this Agreement. This waiver and release does not include the Company’s rights to enforce this Agreement and any action
or claim that cannot be waived as a matter of law.

 

    	 	2 of 42	 

    	 		 

    

 

b)
The TXHD Releasors further waive any and all rights or benefits that the TXHD Releasors do not know or suspect to exist at the
time of its execution of this Agreement which, if known by them, would have materially affected this Settlement with the Fund.
The TXHD Releasors agree that this is a complete and final Settlement and specifically affirms their intention to release not
only those claims against Auctus which they know about, but also those claims about which they do not know. The TXHD Releasors
also stipulate and agree that the consideration provided pursuant to this Agreement is in full and complete satisfaction of any
claims, including but not limited to such claims related to or arising out of the Purchase Agreement, the Note, and/or the Company’s
business relationship with the Fund, through and including the last day of the Effective Date.

 

THE
TXHD RELEASORS UNDERSTAND THAT, BY ENTERING INTO THIS AGREEMENT, THEY NO LONGER HAVE THE RIGHT TO ASSERT ANY CLAIM, ARBITRATION
OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER RELIEF AGAINST ANY AUCTUS RELEASEE FOR ANY CLAIM, INCLUDING BUT
NOT LIMITED TO ANY ACTS OR INJURIES RELATED TO OR ARISING OUT OF THE PURCHASE AGREEMENT, THE NOTE AND/OR THE BUSINESS RELATIONSHIP
BETWEEN AND AMONG TXHD AND AUCTUS THROUGH THE EFFECTIVE DATE, EXCEPT AS INDICATED IN THE PREVIOUS PARAGRAPH.

 

c)
The TXHD Releasors, as may be applicable, acknowledges that they have been advised, in writing, to consult with an attorney of
their choice prior to signing this Agreement. The TXHD Releasors further acknowledge that they have had the opportunity to consult
with an attorney of their choice with respect to all terms and conditions set forth in this Agreement and to have the advice of
counsel with respect to their decision to sign and enter into this Agreement. The TXHD Releasors, as may be applicable, acknowledge
that the Fund has offered them sufficient time to consider the terms and conditions of this Agreement, to consult with counsel
of their choice, and to decide whether to sign and enter into this Agreement.

 

4.
General Release of All Claims by the Fund.

 

a)
Auctus Fund, LLC, on its own behalf and on behalf of its predecessors, parents, affiliates, subsidiaries, divisions, successors
and assigns, and its respective trustees, officers, directors, agents, representatives, employees, principals, shareholders, heirs,
executors, administrators, attorneys, and assigns (collectively the “Auctus Releasors”), hereby release Textmunication
Holdings, Inc., and its respective predecessors, parents, affiliates, subsidiaries, divisions, successors and assigns, and their
respective trustees, officers, directors, agents, representatives, employees, principals, shareholders, heirs, executors, administrators,
attorneys, and assigns (collectively hereinafter the “TXHD Releasees”), from any and all liability, actions, claims,
damages, expenses or costs of whatever nature, including but not limited to compensatory damages, punitive damages, equitable
relief and attorneys’ fees and costs, related to or arising out of the Purchase Agreement, the Note and/or business relationship
between and among the Fund and the Company. The Parties agree that this release of claims is intended to be a broadly construed
“General Release” and includes any dispute, action or claim that is known or unknown to the Auctus Releasors, including
but not limited to, claims based on a breach of an express or implied contract; breach of the covenant of good faith and fair
dealing; any action arising in tort, including, but not limited to, securities fraud, fraud and deceit, negligent misrepresentation,
libel, slander, defamation, and/or any other claims arising from intentional or negligent misconduct; and any and all other claims
arising under Chapters 93A, or other Chapters of the Massachusetts General Laws, all as amended, and any other federal, state
or local statute, law, or ordinance, concerning the terms and conditions of the Purchase Agreement, the Note and/or the business
relationship, the performance under the Purchase Agreement, the Note and/or the business relationship; and any claim arising under
common law or by public policy, except claims or proceedings necessary to enforce the provisions of this Agreement and claims
that cannot be waived as a matter of law. It is understood and agreed that this Agreement constitutes a full and final release
covering all known, unknown, anticipated and unanticipated injuries, debts, claims or damage that the Auctus Releasors have, which
have arisen, or which may have arisen, in connection with the Purchase Agreement, the Note and/or the business relationship between
the Fund and the Company, as well as those injuries, debts, claims or damages not known or disclosed which have arisen, or may
have arisen, from said business dealings, up to the date that the Auctus Releasors sign this Agreement. This waiver and release
does not include the Fund’s rights to enforce this Agreement and any action or claim that cannot be waived as a matter of
law.

 

    	 	3 of 42	 

    	 		 

    

 

b)
The Auctus Releasors further waive any and all rights or benefits that the Auctus Releasors do not know or suspect to exist at
the time of its execution of this Agreement which, if known by them, would have materially affected this Settlement with the Fund.
The Auctus Releasors agree that this is a complete and final Settlement and specifically affirms their intention to release not
only those claims against TXHD which they know about, but also those claims about which they do not know. The Auctus Releasors
also stipulate and agree that the consideration provided pursuant to this Agreement is in full and complete satisfaction of any
claims, including but not limited to such claims related to or arising out of the Purchase Agreement, the Note, and/or the Fund’s
business relationship with the Company, through and including the last day of the Effective Date.

 

THE
AUCTUS RELEASORS UNDERSTAND THAT, BY ENTERING INTO THIS AGREEMENT, THEY NO LONGER HAVE THE RIGHT TO ASSERT ANY CLAIM, ARBITRATION
OR LAWSUIT OF ANY KIND ATTEMPTING TO RECOVER MONEY OR ANY OTHER RELIEF AGAINST ANY TXHD RELEASEE FOR ANY CLAIM, INCLUDING BUT
NOT LIMITED TO ANY ACTS OR INJURIES RELATED TO OR ARISING OUT OF THE PURCHASE AGREEMENT, THE NOTE AND/OR THE BUSINESS RELATIONSHIP
BETWEEN AND AMONG AUCTUS AND TXHD THROUGH THE EFFECTIVE DATE, EXCEPT AS INDICATED IN THE PREVIOUS PARAGRAPH.

 

    	 	4 of 42	 

    	 		 

    

 

c)
The Auctus Releasors, as may be applicable, acknowledges that they have been advised, in writing, to consult with an attorney
of their choice prior to signing this Agreement. The Auctus Releasors further acknowledge that they have had the opportunity to
consult with an attorney of their choice with respect to all terms and conditions set forth in this Agreement and to have the
advice of counsel with respect to their decision to sign and enter into this Agreement. The Auctus Releasors, as may be applicable,
acknowledge that the Fund has offered them sufficient time to consider the terms and conditions of this Agreement, to consult
with counsel of their choice, and to decide whether to sign and enter into this Agreement.

 

5.
Dismissal of the Litigation with Prejudice. Within thirty (30) days after the delivery of the Consideration and authorization
for the conversion of the Settlement Shares, to the Fund, as set forth in Section 2 above, the Parties, through counsel, will
cause a Stipulation of Dismissal with Prejudice, in the form attached hereto as Exhibit C, and with all rights of
appeal waived, to be filed in the Litigation with the U.S. District Court. The Parties covenant and agree that they will instruct
their counsel to cooperate in order to accomplish a full and final dismissal of the Litigation with prejudice.

 

6.
Covenant Not to Sue. A “covenant not to sue” is a legal term which means that a Party promises not to file
a lawsuit or other legal claim against the other Party. The Parties promise not to file a lawsuit, arbitration proceeding, administrative
proceeding, or any other legal claim against the other Party’s Releasees. It is different from the Waiver and Release of
All Claims contained in the section above. Besides waiving and releasing the claims covered by the Waiver and Release of All Claims,
each Party agrees never to sue any of the other Party’s Releasees in any court, arbitration proceeding, administrative proceeding
or otherwise, for any claim released in this Agreement. Notwithstanding this Covenant Not to Sue, either Party may bring a claim
against the other Party to enforce this Agreement, and may bring any other claim that cannot legally be waived.

 

7.
Nondisparagement. Each Party on his/her/its own behalf and on behalf of their predecessors, parents, affiliates, subsidiaries,
divisions, successors and assigns, and its respective trustees, officers, directors, agents, representatives, employees, principals,
shareholders, heirs, executors, administrators, attorneys, and assigns agrees to refrain from disseminating, uttering or publishing
(including, but not limited to, written, oral, or electronic publication) any disparaging, derogatory or negative statements,
comments or remarks concerning the other Party. Each Party agrees to instruct its officers, staff and administrative personnel
to refrain from uttering or publishing (including, but not limited to, written, oral, or electronic publication) any disparaging,
derogatory or negative statements, comments, or remarks concerning the other Party.

 

8.
Escrow / Agreement for Judgment. (a) As security for its performance under the provisions of this Agreement, the Fund
shall hold through its designated agent, Philip M. Giordano, Esq. as escrow agent (the “Escrow Agent”), a Complaint
and Agreement for Judgment, in the forms attached hereto as Exhibits D and E (the “Escrowed
Documents”). Upon an event of default or breach of this Agreement, the Fund shall be authorized to immediately release the
Exhibits from escrow and file the Complaint and the Agreement for Judgment in the U.S. District Court for the District
of Massachusetts. By this Agreement, the Company hereby designates Keen Ellsworth, Esq. (hereinafter “Registered Agent”),
of Ellsworth & Bennion, at 777 N. Rainbow Boulevard, Suite 270, Las Vegas, Nevada 89107, or at such address as the Registered
Agent may, from time to time, establish, as its authorized agent for service of process of the Summons, Complaint, Agreement for
Judgment and other such related filings thereto. Upon a claim of a breach, the Fund shall deliver a notice to the Escrow Agent
of the event causing the alleged breach, with a copy (electronic, email, fax, or otherwise) to the Registered Agent. TXHD shall
have five (5) business days to deliver its response notice to the Escrow Agent regarding such breach. A failure to timely respond
by TXHD shall be deemed a waiver. The Escrow Agent may reasonably rely, in good faith, on such notices or may seek the court’s
determination of the existence of a breach.

 

    	 	5 of 42	 

    	 		 

    

 

(b)
The Escrow Agent acts hereunder as a depositary only, is not taking title to the Escrowed Documents and is not responsible or
liable in any manner whatsoever for any aspect of the management, maintenance or care of the Escrowed Documents. The Escrow Agent
shall not be liable for acting upon any written notice, request, waiver, consent, receipt or other instrument or document which
the Escrow Agent, in good faith, believes to be genuine and what it purports to be. It is understood and agreed that the duties
of the Escrow Agent hereunder are purely ministerial in nature and that he shall not be liable for any error of judgment, fact
or law, or any act done or omitted to be done. The Escrow Agent’s determination as to whether an event or condition has
occurred, or been met or satisfied, or as to whether a provision of this Agreement has been complied with, or as to whether sufficient
evidence of the event or condition or compliance with the provision has been furnished to it, shall be final and binding on the
parties hereto and shall not subject the Escrow Agent to any claim, liability or obligation whatsoever, even if it shall be found
that such determination was improper and incorrect. If, at any time the Escrow Agent shall receive conflicting notices, claims,
demands or instructions with respect to the Escrow Documents, he shall be permitted to withhold action pending a determination
by an arbitration panel or Court of his obligations. The Escrow Agent may resign at any time for any reason upon written notice
given to the Parties of not less than ten (10) calendar days prior to its effectiveness. The Parties agree to indemnify and hold
harmless the Escrow Agent for any act, taken in good faith. Nothing in this Agreement or in any Settlement Document precludes
the Escrow Agent from representing, or continuing to represent, as counsel to Auctus, and TXHD expressly waives, directly and
indirectly, any conflict of interest, actual or apparent, by the Escrow Agent acting in his capacity as counsel to Auctus. The
Escrow Agent shall be under no obligation to institute or defend any actions, suits or legal proceedings in connection herewith
or take any other action likely to involve him in expense unless first indemnified to his reasonable satisfaction.

 

9.
Voluntary and Knowing Agreement. Each Party hereby warrants and represents that:

 

	 	●	It
    is competent, as a matter of law, to enter into this Agreement;
	 	 	 
	 	●	It
    has been advised and encouraged in writing by the other Party to consult with an attorney before signing this Agreement;
	 	 	 
	 	●	It
    has consulted with an attorney before signing this Agreement;

 

    	 	6 of 42	 

    	 		 

    

 

	 	● 	It
    has relied on its own judgment and that of its counsel regarding the consideration for and language of this Agreement;
	 	 	 
	 	●	The
    signatories have been authorized, as necessary, to execute this Agreement;
	 	 	 
	 	●	It
    understands this document and has obtained answers to questions which it has raised about the document; and,
	 	 	 
	 	●	No
    statements made by any other Party have in any way coerced or influenced it to execute this Agreement.

 

10.
No Admission of Liability. It is agreed and understood that, by entering into this Agreement, there is no admission
of liability or wrongdoing by any Party whatsoever. This Agreement arises solely from the Parties’ desire to resolve expeditiously
the Purchase Agreement, the Note, and/or the business relationship between and among Auctus and TXHD, on mutually beneficial terms
and conditions, and to avoid any disputes or costs related thereto. The existence and execution of this Agreement shall not be
considered, and shall not be admissible, in any proceeding as an admission by either Party.

 

11.
Termination of the Purchase Agreement, and Satisfaction of the Note. The Parties agree that, upon the expiration of
the term of the Leak-Out Agreement and the conversion of the entirety of the amount of the Settlement Shares, as provided herein,
each Party agrees and acknowledges that the Purchase Agreement and the Note are, and shall be, immediately terminated, and shall
have no further force and effect. Notwithstanding anything to the contrary contained in this Settlement Agreement, if the Company
breaches any of the provisions contained in this Settlement Agreement, then the Fund, in the Fund’s sole discretion, may
terminate this Settlement Agreement and the Leak-Out Agreement (with the understanding that the Settlement Agreement and the Leak-Out
Agreement shall have no further force and effect if terminated).

 

12.
Costs and Attorneys’ Fees. Each Party understand and agree that each Party will be solely responsible for all
expenses incurred by them respectively or on their behalf, including but not limited to their respective attorneys’ fees,
costs, and disbursements pertaining to any and all matters.

 

13.
Governing Law/Forum. This Agreement shall be construed in accordance with the laws, including the law of conflicts,
of the State of Nevada, without reference to its conflicts/choice of law rules, and, where applicable, under federal law. Any
controversy which may arise between the Parties relating to this Agreement, its enforcement or otherwise shall be brought in the
federal or state courts, sitting in Boston, Suffolk County, Commonwealth of Massachusetts. The prevailing Party shall have the
right, under this Agreement, to collect costs and/or reasonable attorneys’ fees.

 

14.
Entire Agreement. This Agreement constitutes the complete understanding between and among TXHD and Auctus and supersedes
all prior agreements and understandings, oral or written, between the Parties hereto, including but not limited to the Purchase
Agreement and the Note. No other promises or agreements, either express or implied, shall be binding unless in writing and signed
by the Parties after the execution of this Agreement.

 

    	 	7 of 42	 

    	 		 

    

 

15.
Severability. Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction
to be illegal, invalid or unenforceable for any reason, the validity of the remaining parts, terms or provisions shall not be
affected thereby and said illegal, invalid or unenforceable part, term or provision shall be deemed not to be a part of this Agreement.
Upon any finding by a court of competent jurisdiction that any of the waivers or releases contained in this Agreement are illegal,
invalid or unenforceable, the Parties agree, at the other Party’s request, to execute promptly a waiver and release of comparable
scope that is legal and enforceable.

 

16.
No Waiver. The failure of any of the Parties to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver thereof or deprive such party of the right thereafter to insist upon strict adherence to that
term or any other term of this Agreement.

 

17.
Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered
personally, sent by overnight delivery carrier of national reputation, sent by facsimile transmission (and immediately after transmission
receipt of which has been confirmed by telephone by the sender) or sent by certified, registered or express mail, postage prepaid.
Any such notice shall be deemed given when so delivered personally, sent by overnight delivery, or sent by facsimile transmission
(and immediately after transmission receipt of which has been confirmed by telephone by the sender) or, if mailed, when confirmation
of receipt has been received, as follows:

 

(i)
If to Auctus to:

 

Auctus
Fund, LLC

101
Arch Street, Suite 2010

Boston,
Massachusetts 02110

Attn:
Alfred Sollami, Manager

 

With
copies to:

 

Philip
M. Giordano, Esq.

Giordano
& Company, P.C.

REED
& GIORDANO, P.A.

47
Winter Street, Suite 800

Boston,
Massachusetts 02108-4774

 

(ii)
If to the Company:

 

Textmunication
Holdings, Inc.

Attn:
David Thielen

1940
Contra Costa Blvd.

Pleasant
Hill, California 94523

 

    	 	8 of 42	 

    	 		 

    

 

With
copies to:

 

Keen
Ellsworth, Esq.

Ellsworth
& Bennion

777
N. Rainbow Boulevard, Suite 270

Las
Vegas, Nevada 89107

 

Any
Party may, by notice given in accordance with this paragraph to the other Party, designate another address or person for receipt
of notices hereunder.

 

18.
Execution. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but
which together shall constitute one Agreement.

 

19.
Amendment. This Agreement may not be amended orally, but may only be amended by a written instrument signed by both
Parties.

 

REMAINDER
OF THIS PAGE INTENTIONAL LEFT BLANK

 

    	 	9 of 42	 

    	 		 

    

 

THE
FUND AND THE COMPANY ACKNOWLEDGE THAT THEY HAVE READ THIS 

AGREEMENT, UNDERSTAND IT, AND ARE VOLUNTARILY ENTERING INTO IT.

 

IN
WITNESS WHEREOF, the Parties have duly executed this Agreement under as a sealed instrument, as of June 26, 2017.

 

 

    	 	10 of 42	 

    	 		 

    

 

EXHIBIT
“A”

 

    	 	11 of 42	 

    	 		 

    

 

LEAK-OUT
AGREEMENT

 

This
LEAK-OUT AGREEMENT (hereinafter the “Agreement”) is made and entered into as of this 23rd day of June, 2017 (hereinafter
the “Effective Date”), by and between Auctus Fund, LLC (hereinafter “Auctus” or the “Fund”)
and Textmunication Holdings, Inc. (hereinafter “TXHD” or the “Company”). The Fund includes any affiliate
or controlling person of Auctus, and any other agent, representative or other person with whom the Fund is acting in concert.

 

RECITALS

 

A.
The Fund and the Company have entered into a Securities Purchase Agreement, dated July 22, 2016 by and between the Fund and the
Company (hereinafter the “SPA” or the “Purchase Agreement”), pursuant to which the Fund purchased a certain
Convertible Promissory Note issued on July 22, 2016, in the principal amount of $237,750.00 (hereinafter the “Note”);

 

B.
Pursuant to that certain Settlement and Mutual General Release Agreement (hereinafter the “Settlement Agreement”),
by and between the Fund and the Company, dated as of even date herewith, Fund has agreed to enter into this Agreement, which shall
restrict the public sale, assignment, transfer, conveyance, hypothecation or alienation of all shares of the Company’s common
stock issuable upon conversion of the Note (hereinafter the foregoing shares, collectively, the “Shares”).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing premises and of the mutual covenants contained herein, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:

 

1.
Except as otherwise expressly provided herein, and provided that the Company has not breached any of the provisions of the Settlement
Agreement, commencing on the execution and delivery of this Agreement and ending on November 23, 2017 (the “Leak-Out Period”),
Fund may only publicly sell its Shares acquired through the conversion of the Note, subject to the following conditions:

 

1.1
At any time during the Leak-Out Period, Fund may publicly sell daily the greater of 4,910,714 shares or 20% of the average daily
trading volume over the prior 10-day trading period.

 

1.2
All Shares subject to this Agreement will be subject to irrevocable instructions delivered to the Transfer Agent, as defined in
the Settlement Agreement, concurrently herewith in form and substance satisfactory to the Fund to ensure prompt compliance with
the terms of this Agreement, including providing for releases of the Shares or removal of legends as set forth in such instructions.
Such instructions will include a direction requiring the transfer agent to deliver to each party to this Agreement upon request
a report setting forth the shareholdings of each party hereto and any transfers of such shares that may have occurred.

 

    	 	12 of 42	 

    	 		 

    

 

1.3
The Fund agrees that it will not, directly or indirectly, engage in any short selling, hypothecation of Shares or by any other
manner or method sell or lend Shares that would be averse to the publicly traded shares of Company during the Leak-Out Period.

 

1.4
Any transferee of any of the Shares covered by this Agreement, other than purchaser transactions permitted under a waiver by the
Company pursuant to Section 2 or purchaser transactions in the open market, shall be subject to all of the terms and conditions
of this Agreement, including, without limitation, all restrictions on the resale of such Shares, and for all such purposes, any
such transferee shall be a “Fund” as defined herein.

 

1.5
Any purported transfer of Shares in violation of this Agreement shall be void and of no force or effect, and no such transfer
shall be made or recorded on the books of the Company.

 

2.
Notwithstanding anything to the contrary set forth herein, the Company may, in its sole discretion and in good faith, at any time
and from time to time, waive any of the conditions or restrictions contained herein.

 

3.
In the event of: (a) a completed tender offer to purchase all or substantially all of the Company’s issued and outstanding
securities; or (b) a merger, consolidation or other reorganization of the Company with or into an unaffiliated entity, then this
Agreement shall terminate as of the closing of such transaction and the Shares restricted pursuant hereby shall be released from
such restrictions.

 

4.
Except as otherwise provided in this Agreement or any other agreements between the parties hereto, the Fund shall be entitled
to its respective beneficial rights of ownership of the Shares, including the right to vote the Shares for any and all purposes.

 

5.
All notices and other communications hereunder shall be in writing and shall be acceptable if (a) delivered personally or by telecopy,
or (b) if sent by registered or certified mail (return receipt requested) and postage prepaid, or (c) if sent by reputable overnight
courier, so long as the parties to this Agreement receive such notices at the addresses set forth in the Agreement or at such
other address for a party as shall be specified by like notice. All notices shall be deemed to be given on the same day if delivered
by hand or telecopy or on the following business day if sent by overnight delivery or the second business day following the date
of mailing.

 

6.
The resale restrictions on the Shares set forth in this Agreement shall be in addition to all other restrictions on transfer imposed
by applicable United States and state securities laws, rules and regulations.

 

7.
If the Company or Fund fails to fully adhere to the terms and conditions of this Agreement, such party shall be liable to the
other party hereto for any damages suffered by any party hereto by reason of any such breach of the terms and conditions hereof.
Fund agrees that in the event of a breach of any of the terms and conditions of this Agreement by Fund, that in addition to all
other remedies that may be available in law or in equity to the non-defaulting parties, the non-defaulting party may seek a preliminary
and permanent injunction, without bond or surety, and an order of a court requiring such defaulting Fund to cease and desist from
violating the terms and conditions of this Agreement and specifically requiring such Fund to perform his/her/its obligations hereunder
is fair and reasonable by reason of the inability of the parties to this Agreement to presently determine the type, extent or
amount of damages that the Company or its other shareholders may suffer as a result of any breach or continuation thereof.

 

    	 	13 of 42	 

    	 		 

    

 

8.
This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof, and may not
be amended except by a written instrument executed by the parties hereto.

 

9.
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. Any action brought by either
party hereto against the other concerning this Agreement shall be brought only in the federal or state courts of the Commonwealth
of Massachusetts, sitting in Boston, Suffolk County, the Commonwealth of Massachusetts. In the event of default hereunder, the
non-defaulting party shall be entitled to recover reasonable attorney’s fees and costs incurred in the enforcement of this
Agreement.

 

10.
The Parties each represent that before executing this Agreement each Party has had the opportunity to consult with competent legal
counsel of its own choosing, carefully read the Agreement, and has been fully and fairly advised as to its terms. The Parties
hereto agree that any rule of law or decision that would require interpretation of any claimed ambiguities in this Agreement against
the Party that drafted it has no application and is expressly waived.

 

11.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of
which shall be deemed, collectively, one agreement. The parties hereto, and their respective successors and assigns, are hereby
authorized to rely upon the signature of each person on this Agreement, which are delivered by facsimile, electronic signature
or scanned electronic e-mail attachment, as constituting a duly authorized, irrevocable, actual, current delivery of this Agreement
with original ink signatures of each such person. Signatures of the parties transmitted by facsimile or scanned e-mail attachment
shall be deemed to be their original signatures for all purposes. This Agreement shall become effective when executed and delivered
by the parties hereto.

 

12.
In case any one or more of the provision contained in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and such
invalid, illegal or unenforceable provision shall be reformed and construed so that it will be valid, legal and enforceable to
the maximum extent permitted by law.

 

    	 	14 of 42	 

    	 		 

    

 

IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this Leak- Out Agreement as of the day and year first above
written.

 

	 	TEXTMUNICATION
                                         HOLDINGS, INC.,

                                                                          (the
                                         Company)

	 	 	 
	 	a
    Nevada corporation
	 	 	 
	 	By:
    	
	 	 	 
	 	Its:
    	CEO
	 	 	Wais
    Asefi, CEO

 

	 	AUCTUS
    FUND, LLC (the Fund)
	 	a
    Delaware limited liability company
	 	a
    Nevada corporation
	 	 	 
	 	By:
    	
	 	 	 
	 	Its:
    	Al
    Sollami - Manager
	 	 	[Name
    and Title]

 

    	 	15 of 42	 

    	 		 

    

 

EXHIBIT
“B”

 

    	 	16 of 42	 

    	 		 

    

 

[TEXTMUNICATION
HOLDINGS, INC.]

 

June
___, 2017

 

Worldwide
Stock Transfer, LLC

1
University Plaza, Suite 505

Hackensack,
NJ 07601

 

Re:
Irrevocable Letter of Instruction

 

Ladies
and Gentlemen:

 

Textmunication
Holdings, Inc., a Nevada corporation (the “Company”) and Auctus Fund, LLC (the “Investor”) have entered
into a Settlement Agreement, dated as of June 23, 2017 (the “Agreement”) providing for the issuance of Five Hundred
and Fifty Million (550,000,000) shares of common stock (the “Common Stock”) of the Company to be issued to the Investor
upon the conversion(s) of a Convertible Promissory Note in the principal amount of $237,750.00 (the “Note”). The Note
was originally issued on July 22, 2016.

 

A
copy of the Settlement Agreement, the Leak-Out Agreement (collectively, with the Settlement Agreement, the “Agreements”)
and the Note are attached hereto. You should familiarize yourself with your issuance and delivery obligations, as transfer agent,
contained therein. The shares to be issued are to be registered in the names of the registered holder of the securities submitted
for conversion or exercise.

 

You
are hereby irrevocably authorized and instructed to reserve a sufficient number of shares of the Company’s Common Stock,
(initially 550,000,000 shares) for issuance upon conversion of the Note, in accordance with the terms thereof. The amount of Common
Stock so reserved may be increased, from time to time, by written instructions of the Company or the Investor.

 

The
ability to convert in accordance with the terms of the Settlement Agreement, Leak- Out Agreement and the Note in a timely manner
is a material obligation of the Company under the Agreements and the Note. Time is of the essence. Your firm is hereby irrevocably
authorized and instructed to issue shares of common stock of the Company (without any restrictive legend providing the shares
of Common Stock are held and maintained in accordance with the Leak-Out Agreement) to the Investor without any further action
or confirmation by the Company (from reserve), but in the event there are insufficient reserve shares of Common Stock to accommodate
a Conversion Notice (defined below), you and the Company agree that a Conversion Notice must be completed using authorized, but
unissued shares of Common Stock that the Company has in its treasury): (A) upon your receipt from the Investor of: (i) a notice
of Conversion (the “Conversion Notice”), as executed by the Investor; and (ii) an opinion of counsel of the Investor,
in form substance and scope customary for opinions of counsel in comparable transactions (and as reasonably satisfactory to the
Transfer agent), to the effect that the shares of Common Stock of the Company issued to the Investor pursuant to the Conversion
Notice are not “restricted securities,” as defined by Rule 144 and should be issued to the Investor without any restrictive
legend; and (B) the number of shares to be issued, pursuant to the Conversion Notice, is less than 4.99% of the total issued Common
Stock of the Company. The Investor and the Company understands that Worldwide Stock Transfer, LLC (the “Transfer Agent”)
shall be required to perform any issuances or transfers of shares pursuant to this letter unless the respective issuance or transfer
of shares is prohibited by a valid court order. If the Company informs you that there is a court order prohibiting such issuances,
then the Company must provide you with a certified copy of such court order prior to the issuance deadline for the respective
conversion.

 

    	 	17 of 42	 

    	 		 

    

 

The
Company hereby requests that your firm act immediately, without delay and without the need for any action or confirmation by the
Company with respect to the issuance of Common Stock pursuant to any Conversion Notices received from the Investor. Your firm
will not delay in processing any Conversion Notices owing to the fact that the Company is, or may be, in arrears of its payment
of its fees and other monies owed to your firm, the Investor agrees to pay the cost of processing the Conversion Notice a sum
not to exceed $150.00 (including any related cancellation and DWAC fees) for each such transaction.

 

The
Company shall indemnify you and your officers, directors, principals, partners, agents and representatives, and hold each of them
harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements
of its attorneys) incurred by or asserted against you or any of them arising out of or in connection with the instructions set
forth herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs and expenses of defending
yourself or themselves against any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters
in respect of which it is determined that you have acted with gross negligence or in bad faith. You shall have no liability to
the Company in respect to any action taken or any failure to act in respect of this if such action was taken or omitted to be
taken in good faith, and you shall be entitled to rely in this regard on the advice of counsel.

 

The
Board of Directors of the Company has approved the foregoing (irrevocable instructions) and does hereby extend the Company’s
irrevocable agreement to indemnify your firm for all loss, liability or expense in carrying out the authority and direction herein
contained on the terms herein set forth.

 

The
Company agrees that in the event that your company resigns as the Company’s transfer agent, the Company shall engage a suitable
replacement transfer agent that will agree to serve as transfer agent for the Company and be bound by the terms and conditions
of these Irrevocable Instructions within no more than five (5) business days. The Company shall not terminate the Transfer Agent
as the Company’s transfer agent without a signed consent from the Investor.

 

The
Investor is intended to be and is a third party beneficiary hereof, and no amendment or modification to the instructions set forth
herein may be made with the prior written consent of the Investor.

 

    	 	18 of 42	 

    	 		 

    

 

	 	 	Very
    truly yours,
	 	 	 
	 	 	TEXTMUNICATION
    HOLDINGS, INC.
	 	 	 	                     
	 	 	By:	 
	    	 	Name:
    	Wais
    Asefi
	 	 	Title:	Chief
    Executive Officer

 

	ACKNOWLEDGED
    AND AGREED:	 	 
	 	 	 	 
	WORLDWIDE
    STOCK TRANSFER, LLC	 	                                           
	 	 	 	 
	By:	    	 	 
	Name:	Yonah
    J. Kopstick	 	 
	Title:	Vice-President	 	 

 

    	 	19 of 42	 

    	 		 

    

 

EXHIBIT
“C”

 

    	 	20 of 42	 

    	 		 

    

 

UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

 

	 	:	 
	AUCTUS
    FUND, LLC,	:	 
	 	:	 
	                                    Plaintiff,	:	 
		:	Civil Action No. 1:17-CV-10504-IT
	              v.	:	 
	 	:	 
	TEXTMUNICATION
    HOLDINGS, INC.,	:	 
	 	:	 
	                                    Defendant.	:	 
	 	:	 

 

STIPULATION
OF DISMISSAL WITH PREJUDICE

 

Pursuant
to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure, the Plaintiff, Auctus Fund, LLC (hereinafter the “Plaintiff”)
and the Defendant, Textmunication Holdings, Inc. (hereinafter the “Defendant,” and, with the Plaintiff, the “Parties”
and each a “Party”) hereby stipulate and agree to the dismissal of all claims, counterclaims, crossclaims or otherwise,
that were brought, or could have been brought, against any Party in the above-captioned action. All rights of appeal are hereby
waived and each Party shall bear its own costs and attorneys’ fees.

 

	Respectfully
    submitted,	 	Respectfully
    submitted,
	PLAINTIFF,
    Auctus Fund, LLC,	 	DEFENDANT,
    Textmunication Holdings, Inc., 
	 	 	 
	By
    its Attorneys,	 	By
    its Attorneys,
	 	 	 
	/s/
    Philip M. Giordano	 	/s/
    Aaron Hutchins
	Philip
    M. Giordano, Esq. (BBO #193530)	 	Aaron
    Hutchins, Esq. (BBO # 672286)
	Giordano &
    Company, P.C.	 	HUTCHINS
    LAW, P.C.
	REED
    & GIORDANO, P.A.	 	6
    Maple Street, Suite 201
	47
    Winter Street, Suite 800	 	Northborough,
    Massachusetts 01532
	Boston,
    Massachusetts 02108-4774	 	Telephone:
    (508) 393-6060
	Telephone:
    (617) 723-7755	 	Facsimile:
    (508) 630-1709
	Facsimile:
    (617) 723-7756	 	Email:
    ahh@attorneyhutchins.com 
	Email: pgiordano@reedgiordano.com	 	

 

Dated:
June ___, 2017

 

    	 	21 of 42	 

    	 		 

    

 

CERTIFICATE
OF SERVICE

 

I,
Philip M. Giordano, do hereby certify that on the day of June ___, 2017, I caused to be served a true and correct copy of the
Stipulation of Dismissal with Prejudice, as filed by and through the District Court’s electronic filing/ECF system and that
such true copy is available for downloading and viewing by all counsel of record.

 

	Dated:
    June___, 2017	 	/s/
    Philip M. Giordano
	 	 	Philip
    M. Giordano

 

    	 	22 of 42	 

    	 		 

    

 

EXHIBIT
“D”

 

    	 	23 of 42	 

    	 		 

    

 

UNITED
STATES DISTRICT COURT

FOR
THE DISTRICT OF MASSACHUSETTS

 

	 		 
	 	:	 
	AUCTUS
    FUND, LLC,	:	 
	 	:	 
	                                                  Plaintiff,	:	 
		:	Civil Action No.________________________
	                  v.	:	 
	 	:	 
	TEXTMUNICATION
    HOLDINGS, INC.,	:	 
	 	:	 
	                                                  Defendant.	:	 
	 	:	 
	 	 	 

 

COMPLAINT
AND DEMAND FOR JURY TRIAL

 

I.
INTRODUCTION

 

1.
The Plaintiff, Auctus Fund, LLC, (hereinafter “Auctus” or the “Fund”), respectfully submits its Complaint
and Demand for Jury Trial (hereinafter the “Complaint”) against the Defendant, Textmunication Holdings, Inc. (hereinafter
the “Company” or “TXHD”) in the above-captioned action. The Plaintiff’s allegations, as set out
herein, are asserted for damages arising from, and resulting from the Defendant’s violations of the following:

 

a)
breach of contract.

 

2.
The Plaintiff further alleges that, as a result and as caused by the Defendant’s breaches of contract, Auctus has suffered
lost revenue, lost profits and prospective business, together with its injuries and damages.

 

3.
The Plaintiff respectfully requests that its causes of action against the Defendant proceed to a trial by jury, that judgment
be entered against the Defendant and that Auctus be awarded its compensatory damages and losses, costs, interest, plus multiple
and/or punitive damages, attorneys’ fees, equitable and declaratory relief, and any such other relief as this Honorable
Court deems just and appropriate.

 

    	 	24 of 42	 

    	 		 

    

 

II.
PARTIES

 

4.
The Plaintiff, Auctus Fund, LLC, is a Delaware limited liability company with its address at 101 Arch Street, 20th Floor, Boston,
Suffolk County, Massachusetts 02110.

 

5.
Upon information and belief, the Defendant, Textmunication Holdings, Inc., is a corporation, duly organized under the laws of
the State of Nevada, Entity No. E0524932013-3 and Nevada Business ID NV20131637442, with headquarters located at 1940 Contra Costa
Road, Pleasant Hill, California, 94532. The Defendant is a public corporation, trading under the symbol “TXHD,” and
is registered with the U.S. Securities and Exchange Commission and the various state securities authorities including but not
limited to, upon information and belief, the Commonwealth of Massachusetts. Defendant TXHD’s transfer agent is Worldwide
Stock Transfer, LLC (hereinafter “Worldwide” or the “Transfer Agent”), located at 1 University Plaza,
Suite 505, Hackensack, New Jersey 07601.

 

III.
JURISDICTION AND VENUE

 

6.
The Plaintiff asserts that this Honorable Court has jurisdiction over this action under 28 U.S.C. § 1332 because the Parties
are of complete diversity and the amount in controversy exceeds $75,000.00.

 

7.
The Plaintiff further contends that, pursuant to 28 U.S.C. § 1391(b), venue is proper in the District of Massachusetts in
that, pursuant to the Transaction Documents (defined below), the Parties agreed that any and all disputes between and/or among
them shall be brought, inter alia, in the federal court in the District of Massachusetts. Additionally, this Court is such
District where the Plaintiff is headquartered and has its principal place of business, and is where the violative conduct described
herein is alleged to have occurred.

 

    	 	25 of 42	 

    	 		 

    

 

8.
This Court has personal jurisdiction, generally and specifically, over the Defendant by express terms of the Transaction Documents,
and as arising from its extensive business contacts, generally over time and specifically in its business dealings with the Plaintiff,
within the Commonwealth of Massachusetts.

 

IV.
FACTUAL BACKGROUND

 

9.
On or about June 23, 2017, the Plaintiff and the Defendant executed a Settlement Agreement and a Leak-Out Agreement, with Exhibits
thereto (hereinafter the “Agreements”), in the forms attached, restated and incorporated by reference hereto
as Exhibits 1 and 2.

 

10.
The Parties executed the Agreements in order to settle and resolve a pending litigation in this Honorable Court, styled as Auctus
Fund, LLC v. Textmunication Holdings, Inc., Dkt. No. 1:17-CV-10504-IT (D. Mass.)(Talwani, J.)(hereinafter the “Prior
Litigation”).

 

11.
Pursuant to the Agreements, inter alia, the Defendant agreed to authorize and reserve Five Hundred – Fifty Million
(550,000,000) shares (hereinafter the Settlement Shares”) of the Company’s common stock (hereinafter the “Common
Stock”) for issuance upon full conversion of the outstanding obligations of TXHD, in accordance with the terms of the Agreements,
a certain Securities Purchase Agreement (hereinafter the “Purchase Agreement”) and a certain Convertible Promissory
Note (hereinafter the “Note”, collectively, inter alia, with the Purchase Agreement, as the “Transaction
Documents”), in the forms attached, restated and incorporated by reference hereto as Exhibits 3 and 4.

 

12.
As a material part of the Agreements, the Defendant agreed that an Agreement for Judgment in the amount of Four Hundred –
Twenty – Five Thousand and 00/100 ($425,000.00) Dollars (U.S.) (hereinafter the “Default Sum”) was to be held
in escrow, pending the authorization, reservation, issuance, and liquidation of the Settlement Shares during the term of the Leak-Out
Agreement, in the form attached, restated and incorporated by reference hereto as Exhibit 5. By the Agreement for
Judgment and as provided in the Transaction Documents, the Defendant further agreed that until paid, the Default Sum shall continue
to accrue the default interest rate of Twenty-Two and 00/100 (22.00%) percent per year.

 

    	 	26 of 42	 

    	 		 

    

 

13.
The Defendant has breached the Agreements and the Transaction Documents, and is liable in the amount of Four Hundred – Twenty
– Five Thousand and 00/100 ($425,000.00) Dollars (U.S.), with the default interest accruing at the rate of Twenty-Two and
00/100 (22.00%) percent per year.

 

14.
By the Defendant’s breach of the Agreements and the Transaction Documents, the Plaintiff has suffered damages in the amount
of Four Hundred – Twenty – Five Thousand and 00/100 ($425,000.00) Dollars (U.S.), with the default interest accruing
at the rate of Twenty-Two and 00/100 (22.00%) percent per year.

 

V.
VIOLATIONS OF LAW

 

COUNT
I – BREACH OF CONTRACT

 

15.
The Plaintiff reasserts Paragraphs 1 through 14 of the Complaint, together with Exhibits, and restates and incorporates
them herein by reference.

 

16.
On or about June 23, 2017, the Plaintiff and the Defendant executed a Settlement Agreement and a Leak-Out Agreement, as settlement
of the Defendant’s obligations in the Transaction Documents and as a resolution of the Prior Litigation, styled as Auctus
Fund, LLC v. Textmunication Holdings, Inc., Dkt. No. 1:17-CV-10504-IT (D. Mass.)(Talwani, J.).

 

    	 	27 of 42	 

    	 		 

    

 

17.
The Plaintiff performed its obligations under the Agreements and the Transaction Documents, and in good faith.

 

18.
The Defendant, by its conduct described herein, has breached the Agreements and the Transaction Documents, breaching its contract
with the Plaintiff.

 

19.
As a direct and proximate cause of the Defendant’s breaches of its contract, the Plaintiff has suffered damages in the amount
of Four Hundred – Twenty – Five Thousand and 00/100 ($425,000.00) Dollars (U.S.), with the default interest accruing
at the rate of Twenty-Two and 00/100 (22.00%) percent per year, to its detriment.

 

VI.
REQUESTS FOR RELIEF

 

WHEREFORE,
the Plaintiff, Auctus Fund, LLC, respectfully requests that this Honorable Court grant it the following relief:

 

a)
Determine that the Defendant, Textmunication Holdings, Inc., is liable under Count I, for Breach of Contract, and for all damages,
losses, and costs, as alleged herein;

 

b)
Determine and award the Plaintiff, Auctus Fund, LLC, its damages in the amount of Four Hundred – Twenty – Five and
00/100 ($425,000.00) Dollars (U.S.), with the default interest accruing at the rate of Twenty-Two and 00/100 (22.00%) percent
per year, as set forth herein;

 

c)
Render a judgment on behalf of the Plaintiff, Auctus Fund, LLC, on all Counts of the Complaint, and issue findings of fact and
rulings of law, as necessary and appropriate, that the Defendant, Textmunication Holdings, Inc., is liable, in all respects;

 

d)
Order, decide, adjudge, and determine that the liability of the Defendant, Textmunication Holdings, Inc., is for all losses, injuries,
and damages, special, consequential, general, and/or otherwise, and for all interest and costs, as alleged herein;

 

    	 	28 of 42	 

    	 		 

    

 

e)
Award the Plaintiff, Auctus Fund, LLC, its costs, including, but not limited to, filing fees, costs, expenses and interest, for
being required to prosecute this action;

 

f)
Award the Plaintiff, Auctus Fund, LLC, its actual attorneys’ fees, for being required to prosecute this action;

 

g)
Enter judgment on behalf of the Plaintiff, Auctus Fund, LLC, on the Complaint;

 

h)
Order declaratory relief, as appropriate and as this Honorable Court deems necessary; and/or

 

i)
Any additional relief which this Honorable Court deems just and proper.

 

THE
PLAINTIFF, AUCTUS FUND LLC,

DEMANDS
A TRIAL BY JURY ON ALL COUNTS SO TRIABLE

 

	 	Respectfully
    Submitted,
	 	PLAINTIFF,
    Auctus Fund LLC,
	 	 
	 	By
    its Attorneys,
	 	 
	 	 
	 	Philip
    M. Giordano, Esq. (BBO No. 193530) 
	 	Giordano
    & Company, P.C.
	 	REED
    & GIORDANO, P.A.
	 	47
    Winter Street, Suite 800
	 	Boston,
    Massachusetts 02108-4774
	 	Telephone:
    (617) 723-7755
	 	Facsimile:
    (617) 723-7756
	 	Email:
    pgiordano@reedgiordano.com

 

Dated:_____
__ , 2017

 

    	 	29 of 42	 

    	 		 

    

 

EXHIBIT
“1”

 

    	 	30 of 42	 

    	 		 

    

 

EXECUTED

SETTLEMENT
AGREEMENT

AND
MUTUAL GENERAL RELEASE

 

    	 	31 of 42	 

    	 		 

    

 

EXHIBIT
“2”

 

    	 	32 of 42	 

    	 		 

    

 

EXECUTED

LEAK-OUT
AGREEMENT

 

    	 	33 of 42	 

    	 		 

    

 

EXHIBIT
“3”

 

    	 	34 of 42	 

    	 		 

    

 

EXECUTED

SECURITIES
PURCHASE AGREEMENT

 

    	 	35 of 42	 

    	 		 

    

 

EXHIBIT
“4”

 

    	 	36 of 42	 

    	 		 

    

 

EXECUTED

CONVERTIBLE PROMISSORY NOTE

 

    	 	37 of 42	 

    	 		 

    

 

EXHIBIT
“5”

 

    	 	38 of 42	 

    	 		 

    

 

EXECUTED

AGREEMENT FOR JUDGMENT

 

    	 	39 of 42	 

    	 		 

    

 

EXHIBIT
“E”

 

    	 	40 of 42	 

    	 		 

    

 

UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

 

	 	 	 
	 	:	 
	AUCTUS
    FUND, LLC,	:	 
	 	:	 
	                                           Plaintiff,	:	 
		:	Civil Action No.______________
	                v.	:	 
	 	:	 
	TEXTMUNICATION
    HOLDINGS, INC.,	:	 
	 	:	 
	                                           Defendant.	:	 
	 	:	 
	 		 

 

AGREEMENT
FOR JUDGMENT

 

WHEREFORE,
the Plaintiff, Auctus Fund, LLC, and the Defendant, Textmunication Holdings, Inc., hereby stipulate and agree as follows:

 

j)
Judgment shall enter on the Complaint, as filed by the Plaintiff, Auctus Fund, LLC, in the above-captioned matter;

 

k)
the Defendant, Textmunication Holdings, Inc., is hereby liable under Count I, for Breach of Contract, and for all damages, losses,
interest and costs, as alleged in the Complaint;

 

l)
the Plaintiff, Auctus Fund, LLC, is hereby awarded its damages in the amount of Four Hundred – Twenty – Five Thousand
and /100 ($425,000.00) Dollars (U.S.), with the default interest accruing at the rate of Twenty-Two and 00/100 (22.00%) percent
per year and as alleged in the Complaint;

 

m)
the Plaintiff, Auctus Fund, LLC, is hereby awarded its costs, including, but not limited to, filing fees, costs, expenses and
interest, as hereinafter demonstrated by its filings with this Court, for being required to prosecute this action;

 

    	 	41 of 42	 

    	 		 

    

 

n)
the Plaintiff, Auctus Fund, LLC, is hereby awarded its attorneys’ fees, as hereinafter demonstrated by its filings with
this Court, for being required to prosecute this action;

 

o)
The Plaintiff, Auctus Fund, LLC, is hereby awarded equitable, injunctive, declaratory and/or such other relief, as hereinafter
demonstrated by its filings with this Court, as appropriate and as the Court deems necessary and proper; and/or

 

p)
Any additional relief which this Honorable Court deems just and proper.

 

		 	Respectfully
    Submitted,
	 	 	PLAINTIFF, Auctus
    Fund LLC,
	 	 	 
	 	 	By
    its Attorneys,
	 	 	 
	 	 	 
	 	 	Philip
    M. Giordano, Esq. (BBO No. 193530) 
	 	 	Giordano &
    Company, P.C.
	 	 	REED
    & GIORDANO, P.A.
	 	 	47
    Winter Street, Suite 800
	 	 	Boston,
    Massachusetts 02108-4774
	 	 	Telephone:
    (617) 723-7755
	 	 	Facsimile:
    (617) 723-7756
	 	 	Email:
    pgiordano@reedgiordano.com
	Dated:_______
    __ , 2017 	 	 
	 	 	Respectfully
    submitted,
	 	 	DEFENDANT,
    Textmunication Holdings, Inc., 
	 	 	 
	 	 	By
    its Attorneys,
	 	 	 
	 	 	 
	 	 	Aaron
    Hutchins, Esq. (BBO # 672286) HUTCHINS LAW, P.C.
	 	 	6
    Maple Street, Suite 201
	 	 	Northborough,
    Massachusetts 01532
	 	 	Telephone:
    (508) 393-6060
	 	 	Facsimile:
    (508) 630-1709
	Dated:________
    __ , 2017	 	Email:
    ahh@attorneyhutchins.com

 

    	 	42 of 42

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