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a cost of $5,000 per pay phone. Pursuant to the ATC pay phone
agreements, petitioners paid $35,000 to ATC, and ATC purportedly
provided petitioners with legal title to the “telephone
equipment” which was described in an attachment to the ATC pay
phone agreements, entitled “Telephone Equipment List”. However,
the attachment did not identify the pay phones subject to the
agreement, the prices, or the locations. Furthermore,
petitioners were not provided with a list of the modifications
that were made to the pay phones they purchased, and they did not
know the cost of these modifications.
The ATC pay phone agreements also provided a “Buy Back
Election” which was valid for 7 years. Under its terms, Alpha
Telcom had the right of first refusal in the event petitioners
were to sell a pay phone. The buy back election also provided
that if petitioners elected to sell a pay phone back to ATC
within 36 months of the date of delivery, they would be refunded
the entire purchase price minus a 10-percent restocking fee. If
the buy back election was made after 36 months, they would be
refunded the entire purchase price without a restocking fee.
On June 2, 2001, each petitioner also entered into a
separate “Telephone Services Agreement” with Alpha Telcom (Alpha
Telcom service agreements) with a term of 3 years. Under its
terms, Alpha Telcom was responsible for selecting the location of
the pay phones, negotiating site agreements with the owners or
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Last modified: March 27, 2008