Frequently Asked Questions about the MagNet Communications Network program: Q: How long does it take to get switched over? A: It varies depending on your area of the country, and how automated your LEC (Local Exchange Carrier) is. Our order from you is processed electronically through our billing company, generally within three days of receipt. If the information that we receive is correct, it takes from 10 to 30 days from the date we receive your order for conversion to occur. Most of this time is dependent on the LEC. Q. What are some of the problems that can be avoided to speed up processing of my service conversion request? A. Some of the more common problems are asking to convert only a secondary line which is not your main billing number (BTN), requesting conversion in a name that is different from the name your LEC sends your local phone bill to, or having conflicting PIC requests (recently having put in more than one conversion request with another carrier). Q: How can I find out if my service has been changed? A: Dial 1-700-555-4141. This is a free call. If it says Wiltel or UNI-NET, you're all set up. If you need to determine if your Local Exchange Carrier (LEC) can provide equal access to our carrier, dial 10555-1-700-555-4141. If you hear the WilTel recording, you are in an Equal Access Area for WilTel. Q. How do I order calling cards, make a change, correct a billing discrepancy, or any other problem or question relating to my long distance service account? A. Call Customer Service at 1-800-364-4545, 24 hours a day, seven days a week. Note: this number is for CUSTOMER SERVICE questions for LONG DISTANCE CUSTOMERS ONLY! The Customer Service staff cannot answer questions about your IMR status or the marketing plan, or who you have sponsored, etc.! If you have a question about MagNet Communications, our marketing plan, getting sales aids, ordering a Field Manager Pack or ANY OTHER ITEM that does not deal directly with your status as a long distance CUSTOMER, PLEASE CALL THE SALES OFFICE: (305) 436 - 2463. Q. I don't like to give out my Social Security Number over the phone when registering. Is this required? A: When you initially call our Registration Hotline (407) 672 - 6587, you MUST supply a valid Social Security Number - or, if your service is in a business name, your business Federal Tax ID number. This information is REQUIRED both for Independent Marketing Representative status (so that we can legally pay you commissions) and for occasional credit scoring and identification purposes with your Local Exchange Carrier. Your recorded information is left on a secure line, and we do not give out our customers' private information to any third parties under any circumstances. Once you have properly registered, you may create your own unique SPONSOR ID NUMBER by using the FIRST TWO LETTERS OF YOUR LAST NAME (or Company name, if a company) followed by the LAST SEVEN DIGITS of your Social Security Number). For example, John Smith , SSN 123456789 becomes "SM3456789". It DOES NOT become "JS3456789"! "Heavenly Ham Co.", FID# 592866543 becomes HE2866543. You may provide this number to all your prospects to identify you as their SPONSOR. (The system will also recognize you by name or phone number). If you are not willing to disclose your SSN during the registration call, you can provide it when you return the Customer Authorization - but you will not be able to use our Automatic Sponsoring System until then. Q: When can I expect to receive my first commission check? A: It generally takes 90 days (sometimes longer) to receive your first check. If your first net check (or any subsequent check) is under $5.00, we accumulate and carry forward unpaid amounts to the first month in which commissions payable are $5.00 or more. This is because of the time it takes to process, go through a full months billing cycle, then the customer pays their first bill, and then commissions are processed and mailed. After that, you will receive regular monthly commission checks which are normally processed and mailed about the middle of each month. When promoting the MagNet Comm program, it is important to explain to people that commissions in this program are paid SOLELY from the legitimate PAID usage of the product - long distance telephone service! People who call our voicemail line to register and who do not return the forms to convert their service or request permanent IMR status, and who do not refer others who become CUSTOMERS, are not going to make you any money! FOLLOW UP with those you sponsor is the single most effective technique we see used by those who are building serious monthly incomes! Q: How can I get a "down line" report? A: Payline reports are mailed monthly, the first week of the month. There is a $5.00 charge, which must be paid by check in advance to MagNet Communications at the Longwood Processing Center. The report contains the name, address and phone of everyone in your Payline, whether they are qualified as a Group Manager, and who sponsored them. It also shows their status in the system - whether they've sent in a conversion order, and whether they have commissionable long distance usage for the most recent billing month. If there are no registered IMR's on your Payline, you have a $5.00 credit which may be used for a report anytime. The report we send you in early May, for example, will contain all IMR’s who have registered up to the previous week, the date their Customer Authorization was logged into the system, and all customer usage for February that was paid in March. Q. I know that I have had over 100 people call the Registration Line to register as an IMR and receive a booklet. But, when I got my first Payline Report, there were only 55 people on it. What gives? A. In the MagNet Communications Network program, commissions are paid solely from the usage of the product, long distance telephone service. You do not receive compensation from the singular act of "sponsoring someone" as an IMR! If the person who called in does not return the paperwork to convert their long distance service and / or does not sponsor a CUSTOMER within 60 days of "signing up", they are dropped from the system. Explain carefully to your people how our program works, and you will have a Payline Report full of real people who are CUSTOMERS and who are actively promoting the program to earn a profit! We don't require any investment to join, and we don't pay "recruiting fees"! Q. Next month my area code will change from (XXX) to (YYY). Does this affect my participation in any way? A. No. But you may wish to check with Customer Service on 1-800-364-4545 to make sure they are aware of the change. Q. I am moving and will have a new address and phone number. What should I do? Will I keep my existing Payline of customers and reps? A. Send in a new Customer Authorization to MagNet Communications showing your new address and phone number(s) and we will process it for you. Nothing in your Payline will change. Q. I don't have a phone in my name (or don't want to convert my phone service). Can I still participate in your program? A. Our IMR Agreement states that IMR's without a registered phone (a converted phone line -- which can also be a roommate’s or relative's, if they are a customer only) must maintain FIVE active personally sponsored customers to qualify to receive commissions and bonuses. If you do not have FIVE active personally sponsored customers on your Payline and you are not a customer whose account is in good standing, then in that month you do not qualify to receive commissions on the paid usage on your Payline. We will notify you if this occurs and give you an opportunity to cure the default in order to get your check. As with any other product or service, it is very difficult for someone to successfully promote a service that they themselves do not choose to use. Q. Does late payment of my long distance bill disqualify me from earning commission income? A. MagNet / UNI-NET gives all customer / IMR's a reasonable grace period to pay their bills. If your account is seriously delinquent or has to be disconnected for non- payment, you forfeit all rights to future commission payments until you cure the default. Q. I read on Email on one of the on-line computer services that you have to buy the Field Manager Pack to be able to sign up customers for commercial or 800 service. Is this true? A. We recommend that you make the small investment in the Field Manager Pack in order to have all the forms, rate sheets and instructions to sell commercial and 800 accounts and to obtain the valuable training materials and camera - ready approved flyers and brochures therein. The long distance industry is complex, and many of the new IMR's who join our program are not schooled in these intricacies. The Field Manager Pack will get you "up to speed" quickly and efficiently, and eliminate the need for long and potentially expensive phone calls to the Sales Office! However, the forms and instructions to sign up basic commercial accounts and 800 service are freely available to all IMR's on our FAX ON DEMAND line, and there is no explicit requirement to purchase the Field Manager Pack. Q: For information or questions about the program, what is the proper procedure? A: First, always CALL YOUR SPONSOR. If your sponsor can't answer your question, or is inactive or unavailable, call the recorded MagNet OPPORTUNITY SERVICE at (512) 404 - 2385. This line carries a complete description of the program as well as monthly updates for IMR's. Finally, if your question remains unanswered, you may call the Marketing Office at (305) 436 - 2463 between the hours of 11 AM to 4 PM weekdays. Please DO NOT direct any questions to the REGISTRATION LINE at (407) 672-6587. This line is for initial program registrations only! Finally, you should consider participating in at least one of our National Conference Calls. Any Tuesday, at 9 PM or 9:30 PM Eastern, dial (610) 582-7400. At the tone, dial 1126, then at the second tone, dial 410. Q: I called the Registration Line, got my booklet, and returned the forms. Three weeks have gone by and my service isn't converted. Should I call the Registration Line again? A: Call the Sales Office at (305) 436-2463 to find out if your order status is active or if there is a problem. You should NEVER call the Registration Line more than once unless at least ten days have gone by and you DID NOT receive anything from us in the mail. Even if the information you left was incorrect and you went on and sponsored others - once we get your corrected information into our IMR database all those you sponsored will be correctly payable to you. Also, if you registered by mailing in a Marketing Representative Agreement or Customer Authorization that you got from your sponsor, you are already IN THE SYSTEM and there is NO NEED to call the Registration Line, unless you want to listen to the instructions to familiarize yourself with how the AUTOMATIC SPONSORING SYSTEM works. Q. I want to design my own flyer or marketing materials. Is this permitted? A. MagNet Communications Network is happy to assist you in designing marketing literature or ads provided they are: 1) in good taste 2) Do not make exaggerated claims 3) are in compliance with current FCC regulations and the guidelines of our carrier(s) and 4) are pre - submitted and approved by MagNet prior to their use. We wish to remind you that this is an FCC - regulated business, and violations of the above provisions can result in penalties as well as termination of Independent Marketing Representative status. You may NOT - under any circumstance - distribute printed or media promotion that has not been approved in advance by the company. You MAY NOT advertise any carriers' names in print or audio media. Our booklet has an approved flyer, and the Field Manager Pack has a number of duplicable forms, sales aids and flyers that are pre-approved for immediate use. Q. I am not sure I fully understand the marketing and compensation plan. Can you explain it in simple terms that I can use when talking with prospective members? A. You will earn 30% of the monthly commission income produced by your first two sponsored customer / representatives. These two are "transferred" to your Group Manager (usually the person who sponsored you). Now you are a Group Manager, and you earn 4% of the long distance usage of everyone you sponsor, beginning with your third customer (remember - everyone's first two are transferred to their Sponsoring Group Manager). These 4% people are called your "Payline". When each of your first two customer / IMR's (your 'transferees") become a Group Manager by getting their first two customer / IMR's each, then your commission rate on everyone in your Payline goes from 4% to 5%. Everyone on your Payline will transfer their first two sponsored customer / IMR's to you on your Payline, and you earn the full commission on them. And, since each of these "transferees" reports directly to you and you earn the full commission on their usage, they too will each "transfer" their first two customer IMR's to you on your Payline. So, your Payline begins a never - ending doubling process: 2-4-8-16-32-64-128-256-512-1024, etc. As long as you help each new Payline member to get their first two people, your Payline can continue to keep doubling with NO LIMITATIONS ON "WIDTH" OR "DEPTH"! Finally, when your Payline has reached 50 customers, you receive an additional override consisting of 20% of the commission income of everyone on your Payline. MagNet Communications places all net travel program revenues, plus 1/2 of 1% of company gross paid billings into our Profit Sharing Pool, from which quarterly cash distributions are made to qualifying IMRs. You qualify for a distribution by having at least 100 Profit Pool Points in your Payline for the quarter. A "point" is $200 in paid long distance usage. So if your Payline produced $20,000 in gross paid billings for the quarter (about 167 customers), you would qualify for your pro-rata share of the Profit Pool cash distribution for the quarter just past. Q. My first two people never did anything. Is there a way to replace them with "builders" so I can make sure to get to the five percent commission level and receive all the overrides and bonuses? Our program is designed to enable you to achieve maximum earning potential without restriction. Simply request in writing to the Processing Center along with the Customer Authorization and IMR Agreement of your chosen new IMR, to have this person replace the person in the number 1 or number 2 spot, and to have the offending IMR placed onto your Payline. Q. I've received offers to join (XYZ) long distance program. How does yours compare and why should I choose MCN? A. Only you can decide which marketing program is right for you. Here are some of the major questions you should ask BEFORE you decide to join any long distance program - and differences between the MCN program and competing programs, along with their potential benefits to you as a member, to aid you in the decision process: 1. COST. Does the program have a cost to become a marketer and earn full commissions? Are commissions paid legitimately from the usage of the product - long distance service - or is there some kind of questionable "recruiting" scheme involved? Many competing long distance programs that are network marketed require you to purchase a "marketer kit", or pay a "fee" - sometimes up to $200 and more - to gain the marketer status to earn the full published commission rates. Some programs use a portion of these fees to pay "cash bonuses" for recruiting new members. MCN charges no fees of ANY KIND to become either a marketer or a customer. The program is 100%, absolutely FREE to join for anyone, and there are no ARTIFICIAL RESTRICTIONS to earn the full commissions and bonus rates. In fact, you can actually earn commissions in the MCN program by sponsoring just ONE CUSTOMER / IMR. Since the program is FREE, that should be easy for almost anyone to do. If the program you are considering has an entry fee of any kind to participate, or requires you to achieve a certain "level" of distributors to get paid commissions, you may want to ask yourself how willing others that you ask to join may be to take that same gamble and pay a fee. 2. SUPPLIES: Does the company require you to purchase their brochures and forms? Some long distance marketing companies require their representatives to purchase all their promotional materials direct from the company, often at relatively high prices. This can be a real dis-incentive for people who are trying to start their business on a low budget, and it can make mail - order marketing prohibitively expensive. MCN provides a duplicable copy of our marketing flyer free of charge to each IMR. These flyers, which contain the approved Customer Authorization to convert your phone service, can be duplicated at the local copy shop for as little as 3 cents each in quantity. There are no required purchases of any kind in our program. In fact, the only purchase you can make in the MCN program is the Field Manager Pack. This provides you with all the forms and instructions to sell 800 Voice Mail, 800 services, commercial and other offerings and includes all product updates mailed to you free for a full year. All of the forms in the Pack may be duplicated at your local copy shop for pennies. The Field Manager Pack is COMPLETELY OPTIONAL. We also offer multimedia tools - a Sponsoring / Training Cassette at $2.50, and our Windows 3.1 Multimedia Presentation diskette at $6.95. Both come with unlimited duplication rights, and can be ordered through our Longwood, FL Processing Center. 3. EASE OF SPONSORING: How easy is it to sign up a new customer / representative and have them be ready to sponsor others? Are you required to mail them a form which they complete, then wait until it is received by the company, then wait again until they receive their "kit" in the mail back from the company? How long does this process take? What is the cost to you of waiting for this process to unfold? At MCN, we have taken the process of building a down line to the ultimate level of ease and speed! You can sign up a new IMR by simply having them call our 24 hour response line, and leave their information along with your name and phone or ID number as their Sponsor. MCN mails out the 24 page booklet in YOUR NAME with everything they need to get started. WE PAY FOR 100% OF THIS SERVICE! IT DOESN'T COST YOU A DIME. In addition, when your new IMR has finished leaving their registration message on our system, they can begin sponsoring others the same way THE MINUTE THEY FINISH THE CALL! Many of our IMR's are building down lines the VERY FIRST WEEK they join. There's no waiting, no cost, and NO RISK! We also offer a FREE "self extracting" file which can be personalized and uploaded to thousands of computer bulletin boards and services nationwide. The MCNPRO.EXE file is available on Compuserve at 71062,743, or America On-line at "MAGNETCOMM". Ask for a UUENCODED ascii version via INTERNET Email at Magnetcm@ix.netcom.com. 4. RATES - How competitive are they really? Some network marketing companies don't even disclose their rates in their literature! Or, they use gimmicks such as "discounts" when you call someone else who is also a customer of that company. Our flat rates of $0.149 day / $0.126 eve with 1/10th minute billing are among the most competitive in the industry. Over $100 /month, just $0.135 day, $0.115 eve. There are no monthly minimums or fees, no restrictions, and no gimmicks. Our intrastate rates are similarly competitive in most states. All service orders are transmitted to the carrier electronically, and most customers are converted in 10 to 14 days. We offer user - friendly bills with extensive reporting information at no charge. Calling cards are NO SURCHARGE, $0.22 / min. with 1/10th minute billing increments, and are also free of charge. And, we have contracts with more than one carrier. Our calling card is FREE with your service conversion. 800 service is $0.149 Peak, $0.126 Off - Peak with a 5.00 monthly line charge. There is no set- up fee or minimum. If you have T-1 (24 line dedicated) service, or know any businesses who currently have dedicated high volume service and would consider switching, our T-1 rates, which can go well below 8 cents per minute, are extremely difficult for the competition to beat. 5. TRAINING AND BACKUP: Does the company offer training? How much does it cost? Does the home office offer assistance in "closing a sale"? How easy is it to get questions answered? Most of the competitors we've seen have a fee for any kind of training - or they hide the fee in some other purchase requirement. MCN offers free training and promotional conference calls every Tuesday evening at 9:00 PM and again at 9:30 PM. You can get your questions answered and you can participate any time. And, this is a great way to have prospective IMR's call in and hear the story about the company, real - time testimonials from existing marketers, and have their questions answered. Computer users can leave Email for MCN staff on Compuserve at 71062,743 or on America On-line at MAGNETCOMM, or on the INTERNET at Magnetcm@ix.netcom.com - any time of day or night - and be assured of a prompt response. And, our Sales Office is open every business day to take your call, answer your questions, or help you close a sale. None of these services cost you a dime! The Field Manager Pack contains a complete training manual - it even tells you what to say to people! We are here to help you succeed in your new business. When you are successful, so is the company. 6. THE COMPENSATION PLAN: Can you really make a lot of money or is it, perhaps, not as 'easy as it seems"? MCN's unique marketing plan has none of the limitations on "width" or "depth" imposed by some compensation plans. Our average commission rate is also significantly higher than most, because the commission dollar is not "split up" and paid out over multiple levels of marketing representatives. Further, our plan DOES NOT require you to sponsor large numbers of people in order to achieve the maximum growth of your Payline and achieve maximum potential income. If you and your sponsored representatives each only refer TWO PEOPLE, working with them you can achieve the maximum mathematical growth possible under our plan - growth that is truly UNLIMITED! Of course, this doesn't make our plan a "get rich quick" scenario. It is a business, and like any business, it still takes WORK. However, we can confidently state that if you compare our program to the various competitors in the marketplace for low cost, ease of sponsoring, fast customer conversions, the power of the marketing plan, competitive pricing, and company support, MagNet Communications will be the clear winner every time! Q. What is your Field Manager Pack? A. The Field Manager Pack is about 100 pages of forms, long distance industry background, camera - ready flyers and brochures, and a complete 30 page TRAINING MANUAL (our Income Accelerator Kit) on how to build a successful long distance service marketing business. It also includes complete information on our International Callback and Prepaid Calling Card programs. The Pack comes with an UNCONDITIONAL money back guarantee, costs $21.95, and this includes priority 2 day shipping. You also receive Pack updates on all services for a full year at no additional cost. Currently nearly 30 percent of the people who join MagNet Communications as customers opt for the Field Manager Pack, and we have virtually no refund requests. The Field Manager Pack is COMPLETELY OPTIONAL. It's purchase does not "buy your way" into some higher commission scheme or the like. People choose it because it offers real value for the money. Q. What are the phone numbers of MagNet Communications different services? A. Our 24 hour automated information line is (512) 404 - 2385. The first choice is an 8 minute "infomercial" that explains the program in detail and encourages your caller to register. The second menu choice is a sample of what to say to sponsor people. The third menu choice is for company updates, and the date of the update is always heard first. Here we get important information to you on a regular basis. Our FAX ON DEMAND line is (512) 404 - 1283. This has two choices with up to seven pages of forms, rate sheets and printed literature. You, as an IMR, can walk into a business owner's office with nothing more than a pen, and by calling our FAX ON DEMAND, you have everything you need to get his account! Our REGISTRATION LINE is (407) 672 - 6587. Here is where you get FREE Independent Marketing Representative status. You'll need to leave your full name and address, area code and phone number, Social Security Number (confidential) and the full name and ID (or phone or SSN) of your Sponsor. All callers receive our FREE 24 page information booklet in the mail (about 7 to 10 days) which contains all forms and instructions to convert your service, get 800 Voicemail and sponsor others. However - if you left complete information on the Registration Line - you do not have to WAIT for anything - you are already registered and may begin sponsoring others to the same phone number the minute you get off the call! Remember - this is a business where you NEVER HAVE TO ASK ANYONE FOR MONEY! THERE IS NO COST TO START. Q. How do I know that the people I sponsor on the Registration Line will correctly identify me as their Sponsor? A. Currently we are enjoying 97 percent accuracy in tracking the correct Sponsor of each caller, primarily because people are careful to leave complete information. The 3 percent or so that cannot be tracked go into the Profit Pool - and you can participate in this income distribution anyway, so you effectively lose nothing. Encourage your people to CALL YOU after they have joined - or, even better, use three - way - calling to put them on the registration line with you so you can make sure they leave complete information. Now you KNOW they're registered! Of course, the Free Registration service line is optional - many IMR's prefer to use the mail. Inside our 24 pp. booklet is a tear - out 2 sided flyer that can be easily duplicated for pennies. It contains the complete form necessary for conversion and IMR status. Q. How does your International Callback service work? International Callback service allows customers in any country who have an account to call a special access number, let it ring twice and then hang up. Our system calls you back at your pre-programmed number, which can be anywhere in the world, with a US dial tone. You then dial your international call just as a US customer would, saving from 40 to 90 percent. There is no set-up fee, and there is a minimum monthly usage of $25.00. Accounts can be paid with a major credit card. IMR's earn a 4% commission on all accounts under our "no-limits" compensation plan, and all bonuses and overrides apply. MagNet IMR's now have the ability to sponsor customers and IMR' s anywhere in the world! Q. When I send in my Customer Authorization to have my service switched, should I call my local phone company business office to tell them to cancel my current carrier? A. NO! Do NOT tell your local phone company to cancel your current carrier. This will be done automatically when they receive the PIC request from us. This way, there will be no interruption in service. Q. How can I bypass my local phone company on “intra-LATA” (local long distance) calls? A. First, check to see if MagNet’s intrastate rates will give you a better rate on these calls (check our intrastate rate table in the 24 page booklet you received). If so, you can preface these calls with our WilTel PIC code, 10555. Then just dial the number the way you normally do. The call will then be “forced” over our network. Q. Is MagNet Communications listed on the Stock Exchange? How can I get an annual report? A. MagNet Communications Network, Inc. Is a privately - held Florida Corporation. As such, we do not produce nor are we required to distribute an annual report. The officers and Directors of MagNet Communications are Mike Feinberg, Thomas Atkin, and Peter Bromberg. We maintain our Sales Office at 5722 S. Flamingo Rd, Ste. 304, Ft. Lauderdale, FL 33330, as well as a separate Processing Center in Longwood FL. MagNet’s primary carrier is Universal Network Services, which is a licensed long distance telephone company in the 48 Continental states. MagNet has provided full disclosure to the Attorney General or State Consumer Protection Agency in all 50 states. Our Optional Field Manager Pack contains more disclosure, personnel and company history information. Q. What alternatives do I have to get answers to additional questions? A. First, call your Sponsor. If they cannot help, you can call the Sales Office at (305) 436-2463. Also, you can Email MagNet Communications on CompuServe at 71062,743 or America On-line at MAGNETCOMM, or the INTERNET at magnetcm@ix.netcom.com. We check Email daily and one of our full - time staff members will respond to your query - usually the same day. We welcome suggestions or additional questions and will endeavor to update this FAA file on a regular basis.