VSWEEPS, INC (VSWEEPS)

SWEEPSTAKES

PROGRAM

VSweeps, Inc.

112 N. Curry St. Carson City, Nevada 89703

(775) 321-8243 Dear members, VSweeps, Inc. (VSWEEPS) is a marketing company that offers a Sweepstakes program which is designed to help promote and encourage donation and help raise money to help support the good work that each post does for their community and our American service men and women. We have worked closely with a variety of posts for the past two years and have help many of them increase and add to their revenue stream enabling them to be able to do more for their struggling members and their community. Since we’ve been working closely with many different posts, we are well aware of the growing financial pressures confronting posts today. We believe our Sweepstakes program offered by VSWEEPS can help in alleviating these pressures! This fundraising program is a safe, fun and legal way to raise money to support your important programs. Installing our Sweepstakes system in your post is easy. VSWEEPS pays the up-front equipment and installation fees. The post has no out-of-pocket expense (other than the nominal installation fee for installation of a static IP internet connection); furthermore, the Sweepstakes program requires a minimum amount of ongoing supervision/labor and has potential to generate substantial income for the post. We would be delighted to add your post to our growing list of satisfied Sweepstakes participants! We look forward to discussing the Sweepstakes program with you. We can be reached at 775-321-8243 at any time. We can also be reached via e-mail at greg@vsweeps.com. Give us a call or send us an e-mail and let’s talk about this exciting program! Sincerely, Brian Huntley

VSWEEPS, INC (VSWEEPS)

SWEEPSTAKES

OVERVIEW

VSweeps, Inc. Sweepstakes Operational

Overview

I. As in all sweepstakes, this program creates a finite number of game pieces and assigns a winning or non-winning value to each game piece before the game begins. The number and type of each prize to be awarded and the odds of winning each prize are also assigned to game pieces before the sweepstakes begins. None of this information can be modified or altered after it is created.

II. How do you receive entries? There are 3 methods, two with no donation or purchase necessary, as follows:

1. One hundred (100) entries per day can be obtained without donation in person at the location by completing a written request including their full name, complete address, birth date, day time phone number including area code, and e-mail address, if any.

2. One hundred (100) entries can be obtained without donation by mailing an entry form or hand written request including their full name, complete address, birth date, day time phone number including area code, e-mail address, if any, along with a self addressed stamped envelope to VSweeps, Inc., P.O. Box 3818, Cedar Park, TX 78630. There is no limit on the number of request by mail.

3. With each one dollar ($1.00) donation as designated in the rules, through the POS or game terminal, a person can request and receive 100 free sweepstakes entries.

III The entries are assigned to an account which can be accessed by a magnetic stripe card. Again, a winning or non-winning value is assigned to each game piece prior to the start-up of the sweepstakes. If you receive a game piece or entry with a winning value, you win the prize assigned to that game piece.

IV Once you have received entries, there are three methods to reveal your prize assigned to the game piece, if any:

1. A PC Revealer which simply reveals/displays the content of each game piece/entry in a text format. This revealer lists each game piece, its unique ID number, and the prize value, if any assigned to that game piece.

2. One can go to a computer at the location to reveal the entries using the entertaining game themes to display the content of the game pieces/entries.

3. Game pieces/entries can be revealed at the POS terminal at the time they are received.

V This is a finite system at each location. Each participant has the same chance of winning any prize whether or not they:

A. Receive their game pieces/entries without making a donation, or receive entries when they make a donation; or

B. Use the PC Revealer, reveal at the POS terminal or use the computer displays to determine if their game pieces are winning or non-winning pieces, and the value of their prizes, if any; or

C. Reveal one game piece or multiple game pieces at a time.

VI At each location the odds of winning any prize, the number and type of prizes to be awarded, sponsor and sponsor’s address and the rules of the contest are conspicuously displayed.

VII The prizes are not awarded on the basis of any skill or knowledge. The participant either receives a winning game piece/entry or not at the moment they receive the game piece.

VII Pursuant to VSweeps, Inc. rules, participation in the sweepstakes is discretionary. A person who makes a donation is not required to open or reveal the content of the game pieces received with their donation. Donations are accepted whether or not a patron opens or reveals the content of their game pieces.

VIII The game themes are displays that are designed to reflect/reveal the content of the game pieces/entries in an entertaining manner. A person has either won a prize or not at the moment they receive the game piece/entry just like McDonalds and other sweepstakes. One can automatically reveal the game pieces/entries with a PC Revealer, at the POS terminal or instead, can reveal the game pieces/entries by entertaining display themes. The method of revealing the game pieces does not affect the outcome, prizes or odds. The patron cannot alter, modify or impact the content of the game piece, the value of the prize, or any other information assigned to the game piece.

IX Game theme Display: You do not play a game. If a patron decides to reveal the game piece using one of the game theme displays, the patron selects the display and then:

1. Selects the number of game pieces/entries to be revealed.

2. Selects the “reveal” button.

3. The display reveals the value, if any, of the game pieces through display symbols.

Example: A patron receives their free game pieces and one of the game pieces has a prize value of $1.00. When the patron activates Reveal on the game display of their choice, the display would show they won $1.00 through its entertaining display such as displaying three oranges in a line. The computer display simply reveals the value of the prize by using a predetermined set of symbols assigned to be displayed when a prize of that value has been assigned to the game piece selected. This is simply an entertaining manner to reveal the value of the game piece. While the participant may use certain game themes to reveal the contents of the sweepstakes entries, such action will have no bearing on the predetermined content of the sweepstakes entries that will be revealed to the participant. The participant cannot affect the outcome of the sweepstakes results, and cannot alter the odds of winning a prize. The symbols and entertaining display shown to the participant is determined entirely by the content of the sweepstakes entries revealed to the participant. The game theme displays have no effect determining any prize to be awarded, the value of any prize, or the odds of winning any prize. Their function is only to provide an entertaining method of providing notice of the content of the sweepstakes game pieces, just as McDonalds uses Monopoly’s theme to provide notice of the content of their sweepstakes game pieces.

Comparison of Sweepstakes to Amusement Games (8-Lin ers)

Item Sweepstakes Amusement Games (8-Liners)

Authority

The TABC authorizes sweepstakes to advertise and promote the sale of alcoholic beverages. Sweepstakes are also regulated by Ch 45 Bus.& Com. Code which is also referred to as The Sweepstake Act. Sweepstakes are also regulated at the federal level by U.S. Code Title 39, Part IV, Chapter 30 §3001

Amusement games are authorized by the Penal Code Ch. 47.01. In 2003, during the 78th Session of Legislature, the Legislature declined to amend the Penal Code to include video sweepstakes in the definition of a gambling device. As a result, video sweepstakes are not prohibited in Texas and are regulated by Ch. 45 of the Bus. & Commerce Code – not the Penal Code. See the analysis and history of HB 977 and HB 1478

Can Cash Prizes be Paid?

Yes. Sweepstakes winnings may be paid as cash prizes.

No. Amusement games winnings must be redeemed exclusively with noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items.

Restrictions on Winnings

Sweepstakes are subject to additional regulation if a single prize is offered with a value greater than $50,000.

Sweepstakes are subject to additional regulation if a single prize is offered with a value greater than $50,000. Amusement games must be 10X compliant. The player is exclusively rewarded “with noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less.”

Is There a Cost to Play?

No. All sweepstakes entries are free and alternative methods exist to receive entries without a purchase or donation as required by Texas and Federal Statute.

Yes. The user must stake something of value to obtain an outcome from the game. This meets the definition of gambling from the Penal Code Ch. 47.01(1) which states "Bet" means an agreement to win or lose something of value solely or partially by chance."

Is There a Finite Pool of Entries?

Yes. The Sweepstakes is created with a single pool of finite entries.

No - 8-liners cannot create a finite number of game pieces. They use a random number generator to determine winning plays.

Are There a Specific Number

of Prizes?

Yes. The number and type of prizes to be awarded is determined at the time the sweepstakes is created.

No - The prizes varies based on number of prizes previously awarded

Are the Prizes Pre-Determined?

Yes. Each prize is associated with an entry at the time the Sweepstakes is created.

No - Again, the prizes varies based on number of prizes previously awarded

Are the Odds Predetermined?

Yes. The odds are determined at the time the Sweepstakes is created.

No - Odds change with each play. The operator can change the percentage ratio of money bet to the prizes to be paid.

Are Civil Penalties

Available?

Yes. Penalties are no less than $5,000 or more than $50,000 for each violation found No. Amusement games are governed by the Penal Code.

Are Winnings Considered

'Gambling' for Tax Purposes?

No. The IRS has ruled in Technical Advice Memorandum No. 200417004 that Sweepstakes winnings are not gambling winnings.

Yes. Amusement games are gambling. The user has won or lost something of value solely or partially by chance.

PICTURES OF

SWEEPSTAKES

GAME THEMES

Main Screens

Main Screens

Example of Five (5) Reel Games

Example of Eight (8) Line Games

Example of Keno Games

Example of Video Poker

Example of Three (3) Reel Games

Examples of how many of entries to be revealed