DEBT CONVERSTION AND GENERAL RELEASE AGREEMENT
 
THIS AGREEMENT is made and entered into this 27th day of March, 2014, by and
between VHGI Holdings, Inc, (the “Company”) and ______________ (the “Note
Holder”).
 
WHEREAS, the Note Holder is the holder of _______ dollars in principal debt
(“Principal Debt”) of the Company. (please attach note)
 
WHEREAS, the Note Holder desires to immediately and upon execution of this
Agreement convert such Principle Debt into common stock of VHGI Holdings, Inc.
based on a price per share of One Cent ($0.01) and cancel any outstanding
interest, penalties or any other monetary or legal obligation associated with
such Principal Debt (“Debt Conversion”).
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and in order to consummate the Transfer, it is
hereby agreed as follows:
 
1. Debt Conversion: Subject to the terms and conditions hereinafter set forth,
at the date of this Agreement, (A) the Note Holder currently has verified (note
attached) Principal Debt totaling _____________ (______________) and agrees to
convert such Principal Debt into Common Stock of the Company at a price per
share of One Cent ($0.01) for a total of _________________ common shares of the
Company.  Simultaneous to such conversation, the Note Holder also agrees to
cancel all associated documentation with such Principal Debt, including
Interest, liens, security, penalties or any other monetary, legal or security
feature of such Principal Debt.
 
2. Closing. The closing of the transactions contemplated by this Agreement
("Closing") shall be the date of the execution of this Agreement although, no
later than April 4, 2014 4:00 PM EST at which time this offer will be cancelled
and considered null and void if not signed prior to and delivered by, email
(rick@lilygroup.com), or US mail with mail date stamped by April 3, 2014
delivered to: VHGI Holdings, Inc. attn. Rick Risinger 2017 S. Co. Rd. 50 W.,
Sullivan, Indiana 47882.
 
3. Closing Deliveries. In addition to and without limiting any other provisions
of this Agreement, (A) the Company agrees to deliver, or make every attempt to
cause to be delivered as soon as legally possible, to the Note Holder, a
certificate(s) representing ________________ shares of Common Stock of the
Corporation, and (B) the Note Holder agrees this document to be a full and
complete release of the Principal Debt and any other associated obligation
associated with such Principal Debt as paragraph 5 herein.
 
4. Representations and Warranties of the Note Holder and the Company.  Each
party hereby represents and warrants that there has been no act or omission by
such party which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated hereby. There is herein
additionally a potential for other creditors of company to make claim against
company. Even though, the company has been audited the company makes no claim
this is the final and total liability of the company and if, there are other
creditors making claim this offer could be jeopardized by effect and cause of
any such claim in the future. This is only an attempt to secure a balance sheet
for company as to have further opportunity to succeed for future acquisitions
that may or may not have been identified, negotiated or addressed.
 
 
 
 

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5. General Release and Waiver
 
a. In exchange for the consideration provided for in Paragraph 1 and other
valuable consideration, the Note Holder, for itself and for its successor and
assigns (referred to collectively as “Releasors”), forever releases and
discharges the Company and any and all of the Corporation’s past and/or present
affiliates, officers, directors, members, agents, employees, employee benefit
plans and their fiduciaries and administrators, and all of its successors and
assigns (referred to collectively as the “Releasees”), of and from all causes of
action, suits, debts, dues, liabilities, obligations, costs, expenses, liens,
damages, judgments, claims and demands of any kind whatsoever, at law or in
equity, known or unknown, which Releasors ever had, now have or may have against
the Releasees  arising out of, by reason of, or relating in any way whatsoever
to any matter, cause or thing from any time up to the Effective Date of this
Agreement (each a “Claim”), including without limitation, any Claim arising out
of the Principal Debt agreements or any associated agreements or claims thereof.
 
b. By virtue of the foregoing, the Company agrees, that it has waived any
damages and other relief available to the Releasors (including, without
limitation, monetary damages, equitable relief and reinstatement) with respect
to any Claim.  Therefore, the Transferee agrees and covenants, for itself and
each of the other Releasors, not to file any suit, charge or complaint against
Releasees in any court or administrative agency, with regard to any Claim.
 
6. General Provisions
 
a. Entire Agreement. This Agreement (including the exhibits hereto and any
written amendments hereof executed by the parties) constitutes the entire
Agreement and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
 
b. Third Parties. Except as disclosed in this Agreement, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
 
c. Other payables. Please note trade payables could also cause this proposed
offer to be invalid. In the event the trade payables do not help facilitate the
needs of this offer to be satisfied then this offer shall cancel on the date in
paragraph 2 above.
 
d. Sections and Other Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
 
e. Governing Law. This Agreement, and all transactions contemplated hereby,
shall be governed by, construed and enforced in accordance with the laws of the
State of Indiana.  The parties herein waive trial by jury and agree to submit to
the personal jurisdiction and venue of a court of subject matter jurisdiction
located in the State of Indiana.  In the event that litigation results from or
arises out of this Agreement or the performance thereof, the parties agree to
reimburse the prevailing party's reasonable attorney's fees, court costs, and
all other expenses, whether or not taxable by the court as costs, in addition to
any other relief to which the prevailing party may be entitled.
 
f. Counterparts. This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. A facsimile transmission or
transmission via electronic mail (to rick@lilygroup.com) of a PDF version of
this signed Agreement shall be legal and binding on all parties hereto.
 
g. Subject to:  This offer is only available and subject to the completion and
fully execution of the 14C public filing and approval of an increase in the
authorized shares of Company. It is also subject to ALL verified note holders
identified herein attached accepting this offer. Without complete cooperation of
all verified not holders, this action will cancel and no longer be available by
the current administration. This offer is also subject to the ability to
transfer the shares after the completion of the final 14C filing.
 
 
 
 

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h. Disclaimer. We are not attempting to provide legal advice regarding any SEC
or other Governmental agencies. Each Party shall be mindful of its obligations
to secure knowledge of the absolute legal guidelines. The Company is also not
providing any legal or tax advice to any Party of this agreement and each member
shall consult their own respective representatives. Each Party may view the
complete list of regulations and exemptions at www.SEC.gov.
 

 
IN WITNESS WHEREOF, this Agreement has been executed by each of the parties
hereto on the date first above written.
 

Company
 
VHGI Holdings, Inc.
 
 
_____________________________
Name:          Rick Risinger
Title:           Chief Executive Officer
Date:           _______________________
 
 
 
 
 
 
Note Holder
 
___________________________
 
 
_____________________________
Name:         _______________________
Title:           _______________________
Date:           _______________________
 
 
   

 
 

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