3. Proposed Transaction

Under the proposed transaction, JTG, through its subsidiary JTUK, will acquire a 100 percent ownership interest in eKit through a merger of eKit with JTI. As a result, JTI will be merged with and into eKit pursuant to Delaware law. After the merger, JTI will cease to exist, and eKit will be the surviving corporation and an indirect wholly-owned subsidiary of JTG.

Applicants represent that the proposed transfer of control will be transparent to customers. Applicants state that after the merger, eKit will retain its current day-to-day management and will continue to provide the same range of telecommunications services to customers in this state. EKit will retain its CPCN, and will provide service in California under its existing tariffs on file with the Commission.

Applicants state that this transaction will benefit both eKit's and JTG's competitive positions in the telecommunications market, because the merger will increase eKit's access to capital and will combine the market access and the expertise of both companies.