Proposed Transaction

LGE filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (Court) on November 5, 2001. On September 19, 2002, the Court issued an order approving the sale of LGE's licenses and intellectual property to TSI. On September 25, 2002, the bankruptcy trustee for LGE (trustee) signed a bill of sale of LGE's licenses and intellectual property to TSI. The trustee and TSI verbally agreed that TSI would not operate under any state authorizations, including its California CPCN, until commission authorizations were obtained. The actual transfer would not be closed for regulatory purposes until such authorizations were obtained. LGE has no current customers. TSI has not operated in California, and will not do so until it has authorization.

The applicants represent that the transaction will provide a more solid financial base for continued operations. The applicants also represent that there will be no change in rates, terms, and conditions as a result of the transaction.