SC 13E3

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13E-3

RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e) 
OF THE SECURITIES EXCHANGE ACT OF 1934

NETLOJIX COMMUNICATIONS, INC.
(Name of the Issuer)

NETLOJIX COMMUNICATIONS, INC.
NETLOJIX ACQUISITIONS CORPORATION
ANTHONY E. PAPA
JAMES P. PISANI
(Names of Persons Filing Statement)

Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)

641143 10 2
(CUSIP Number of Class of Securities)

Anthony E. Papa
Chairman and Chief Executive Officer
NetLojix Communications, Inc.
501 Bath Street
Santa Barbara, CA 93101
(805) 884-6300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)

with a copy to:
 

Thomas N. Harding, Esq.
Seed Mackall LLP
1332 Anacapa Street
Santa Barbara, CA 93101
(805) 963-0669

This statement is filed in connection with (check the appropriate box):

a. [X]	The filing of solicitation materials or an information statement subject to Regulation 14A (§§240.14a-1  through 240.14b-2), Regulation 14C (§§240.14c-1  through 240.14c-101 ) or Rule 13e-3(c) (§240.13e-3(c) ) under the Securities Exchange Act of 1934 (the "Exchange Act").
b. [  ]	The filing of a registration statement under the Securities Act of 1933.
c. [  ]	A tender offer.
d. [  ]	None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X]

Check the following box if the filing is a final amendment reporting the results of the transaction: [  ]

CALCULATION OF FILING FEE

Transaction valuation:^*   $293,903                                 Amount of filing fee:  $28.00

^*           Estimated for purposes of calculating the filing fee only.  The transaction valuation was determined by multiplying the 14,695,149 shares of Common Stock outstanding by the merger consideration of $0.02 per share.  The filing fee was determined by calculating a fee of $92 per $1,000,000, applied pro rata, to the transaction valuation calculated pursuant to the preceding sentence.

[X]       Check the box if any part of the fee is offset as provided by §240.0-11(a)(2)  and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	$28.00
Form or Registration No.:	Schedule 14A
Filing Party:	NetLojix Communications, Inc.
Date Filed:	December 30, 2002

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Introduction

        This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this "Schedule 13E-3") is being jointly filed by: (i) NetLojix Communications, Inc., a Delaware corporation ("NetLojix") and the issuer of the equity securities that are the subject of the Rule 13e-3 transaction; (ii) NetLojix Acquisitions Corporation, a Delaware corporation ("NAC"), (iii) Anthony E. Papa, and (iv) James P. Pisani  (Mr. Pisani, together with Mr. Papa, are referred to herein as the "Executives").   The foregoing persons and entities are collectively referred to herein as the "filing persons."

        Pursuant to an Agreement and Plan of Merger, dated as of December 28, 2002 (the "merger agreement") by and between NetLojix and NAC, NAC will merge with and into NetLojix, and NetLojix will be the surviving corporation. Upon completion of the merger contemplated by the merger agreement, each issued and outstanding share of NetLojix common stock will be converted into the right to receive $0.02 in cash without interest (the "merger consideration"), except that: (i) shares of NetLojix common stock held as treasury stock immediately prior to the effective time of the merger will be canceled without any payment therefor; (ii) shares of NetLojix common stock held by NAC or the Executives immediately prior to the effective time of the merger will be canceled without any payment therefor; and (iii) shares of NetLojix common stock held by stockholders who perfect their appraisal rights will not receive the merger consideration but instead will be subject to appraisal in accordance with Delaware law. Upon completion of the merger, the Executives, as the sole holders of NAC common stock immediately prior to the effective time of the merger, are expected to own 100% of NetLojix's post-merger common stock.  Shares of NetLojix's Series A Convertible Preferred Stock will continue to be held by the two individuals who currently own such shares, although the terms of such preferred stock will be modified as part of the merger.

        Concurrently with the filing of this Schedule 13E-3, NetLojix is filing a preliminary proxy statement (the "proxy statement") pursuant to which NetLojix will notify its stockholders of, and solicit proxies from its stockholders for, a special meeting for the purpose of voting on whether or not to approve the merger agreement. The proxy statement is in preliminary form and is subject to completion or amendment. The information in the proxy statement, including all appendices thereto, is expressly incorporated by reference into this Schedule 13E-3 in its entirety, and the responses to each item are qualified in their entirety by the provisions of the proxy statement.

Item 1.            Summary Term Sheet.

        The information set forth in the sections entitled "Summary Term Sheet" and "Questions and Answers about the Merger and the Special Meeting" in the proxy statement is incorporated herein by reference.

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Item 2.           Subject Company Information.

(a)   Name and Address.  The information set forth on the first page of the proxy statement and contained in the section entitled "The Participants" in the proxy statement is incorporated herein by reference.

(b)   Securities.  The information contained in the sections entitled "The Special Meeting - - Record Date and Voting Information" in the proxy statement is incorporated herein by reference.

(c)   Trading Market and Price.  The information contained in the section entitled "Information About NetLojix - Market for NetLojix's Common Stock and Related Stockholder Matters" in the proxy statement is incorporated herein by reference.

(d)   Dividends.  The information contained in the section entitled "Information About NetLojix - Market for NetLojix's Common Stock and Related Stockholder Matters" in the proxy statement is incorporated herein by reference. 

(e)   Prior Public Offerings.  Not applicable.

(f)   Prior Stock Purchases.  The information contained in the section entitled "Common Stock Purchase Information" in the proxy statement is incorporated herein by reference.

 Item 3.           Identity and Background of Filing Persons.

(a)   Name and Address.  NetLojix, the subject company, is a filing person.  NAC and the Executives are also filing persons. The information set forth on the first page of the proxy statement and contained in the sections entitled "The Participants" and "Security Ownership of Certain Beneficial Owners and Management" in the proxy statement is incorporated herein by reference.

(b)   Business and Background of Entities.  The information contained in the sections entitled "The Participants" in the proxy statement is incorporated herein by reference.

(c)   Business and Background of Natural Persons.  The information contained in the sections entitled "Directors and Executive Officers of NetLojix" in the proxy statement is incorporated herein by reference.

Item 4.           Terms of the Transaction.

(a)(1)    Tender Offers.  Not applicable.

(a)(2)(i)    Transaction Description.  The information contained in the sections entitled "Summary Term Sheet" and "Questions and Answers About the Merger and the Special Meeting" in the proxy statement is incorporated herein by reference.

(a)(2)(ii)    Consideration.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," "The Merger Agreement - Conversion of NetLojix Common Stock" and "The Merger Agreement - Payment For Shares" in the proxy statement is incorporated herein by reference.

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(a)(2)(iii)    Reasons for Transaction.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background Of The Merger," "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - Reasons For The Board Of Directors' Recommendation," "Special Factors - Position of the Executives as to the Fairness of the Merger" and "Special Factors - Purpose and Structure of the Merger" in the proxy statement is incorporated herein by reference.

(a)(2)(iv)    Vote Required for Approval.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," and "The Special Meeting - Record Date and Voting Information" in the proxy statement is incorporated herein by reference.

(a)(2)(v)    Differences in the Rights of Security Holders.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," "Special Factors - - Effects of the Merger" and "Special Factors - Interests of the Executives; Appointment of Special Committee" in the proxy statement is incorporated herein by reference.

 (a)(2)(vi)    Accounting Treatment.  The information contained in the section entitled "Special Factors - Anticipated Accounting Treatment of Merger" in the proxy statement is incorporated herein by reference.

 (a)(2)(vii)    Income Tax Consequences.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," and "Special Factors - Material U.S. Federal Income Tax Consequences" in the proxy statement is incorporated herein by reference.

(c)    Different Terms.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Effects of the Merger," "Special Factors - Interests of the Executives; Appointment of Special Committee" and "The Merger Agreement - Conversion of NetLojix Preferred Stock" in the proxy statement is incorporated herein by reference.

(d)    Appraisal Rights.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting" and "Special Factors - Appraisal Rights" in the proxy statement is incorporated herein by reference.

(e)    Provisions For Unaffiliated Security Holders.  The information contained in the sections entitled "The Special Meeting - Record Date and Voting Information" and "Special Factors - Appraisal Rights" in the proxy statement is incorporated herein by reference.

(f)    Eligibility for Listing or Trading.  Not applicable. 

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 Item 5.           Past Contacts, Transactions, Negotiations and Agreements.

(a)    Transactions.  (1) The information contained in the sections entitled "Special Factors - Interests of the Executives; Appointment of Special Committee" and "Common Stock Purchase Information" in the proxy statement is incorporated herein by reference.  (2) Director Jeffrey J. Jensen, his father, mother, adult siblings and related charitable foundations have significant ownership in companies to which NetLojix has provided long distance and data network service, including UICI. Services are provided pursuant to NetLojix's standard term agreements. The total amount received by NetLojix pursuant to these agreements in 2001 was approximately $4,572,000.  For the nine months ended September 30, 2002, UICI accounted for approximately $1,900,000 of NetLojix's revenues. In July 2002, UICI terminated NetLojix as its long distance services provider. (3) On January 31, 2002, NetLojix's secured credit facility with Coast Business Credit expired, and NetLojix entered into a new secured credit facility with DTL One, LLC ("DTL"). DTL is owned and controlled by director Jeffrey J. Jensen. Under the DTL line of credit, NetLojix may borrow up to 80% of eligible receivables (as defined) up to a total amount of $2.0 million. Borrowings under the line of credit bear interest, payable monthly, based upon the prime rate of Bank of America NT & SA plus 2% with a minimum interest rate of 10%. Borrowings under the credit facility are secured by substantially all assets of NetLojix. As of December 31, 2002, approximately $1.2 million was outstanding under the credit facility, and no amounts were available to be borrowed under the formula described above. DTL has indicated to NetLojix that it is likely to terminate the facility in 2003.

(b)   Significant Corporate Events.  The information contained in the sections entitled "Special Factors - Background Of The Merger" and "Common Stock Purchase Information" in the proxy statement is incorporated herein by reference. 

(c)   Negotiations or Contacts.  The information contained in the sections entitled "Special Factors - Background Of The Merger" and "Common Stock Purchase Information" in the proxy statement is incorporated herein by reference. 

(e)   Agreements involving the Subject Company's Securities.  (1) The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting" and "The Merger Agreement - Conversion of NetLojix Preferred Stock" in the proxy statement is incorporated herein by reference. (2) NAC has an oral agreement with Tommy Lin and Patrick Lin, the holders of all of the outstanding shares of NetLojix Series A Convertible Preferred Stock, that they will consent to certain changes in the rights, preferences and privileges of such shares in connection with the merger, as disclosed in the proxy statement. (3)  Subsequent to the public announcement of the Executive's proposal to acquire NetLojix, Jeffrey J. Jensen, a director of NetLojix, and his adult siblings, Jami J. Jensen and Julie J. Jensen, requested that the Executives purchase their shares of NetLojix common stock. The Executives have agreed to purchase shares from such persons.  Such purchases will take place after the filing of the proxy statement.  The price per share to be paid is equal to the merger consideration. The number of shares subject to such agreements are:  Jeffrey J. Jensen - 851,738 shares; Jami J. Jensen - 851,738 shares; and Julie J. Jensen - 851,738 shares. The agreements are between the prospective sellers and Next2 Partners, LLC, a California limited liability company owned by the Executives.  Next2 Partners, LLC has assigned its rights under the agreements to NAC.

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Item 6.           Purposes of the Transaction and Plans or Proposals.

(b)   Use of Securities Acquired.  The information contained in the sections entitled "Summary Term Sheet," "Special Factors - Effects of the Merger" and "The Merger Agreement - Conversion of the NetLojix Common Stock" in the proxy statement is incorporated herein by reference.

(c)(1)-(8)   Plans.   The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background of the Merger," "Special Factors - Effects of the Merger," "Special Factors - NAC's Financing of the Merger," "Special Factors - Interests of the Executives; Appointment of Special Committee," "The Merger Agreement - Conversion of the NetLojix Common Stock" and "The Merger Agreement - Conversion of the NetLojix Preferred Stock" in the proxy statement is incorporated herein by reference.

Item 7.           Purposes, Alternatives, Reasons and Effects.

(a)  Purposes.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background of the Merger," "Special Factors - Reasons for the Special Committee's Recommendation," "Special Factors - Reasons for the Board of Directors' Recommendation," "Special Factors - Position of the Executives as to the Fairness of the Merger" and "Special Factors - Purpose and Structure of the Merger" in the proxy statement is incorporated herein by reference.

(b)    Alternatives.  The information contained in the sections entitled "Special Factors - Background of the Merger," "Special Factors - Reasons for the Special Committee's Recommendation" and "Special Factors - Reasons for the Board of Directors' Recommendation" in the proxy statement is incorporated herein by reference.

(c)    Reasons. The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background of the Merger," "Special Factors - Reasons for the Special Committee's Recommendation," "Special Factors - Reasons for the Board of Directors' Recommendation," "Special Factors - Position of the Executives as to the Fairness of the Merger" and "Special Factors - Purpose and Structure of the Merger" in the proxy statement is incorporated herein by reference.

(d)    Effects.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Effects of the Merger," "Special Factors - Interests of the Executives; Appointment of Special Committee," "Special Factors - Material U.S. Federal Income Tax Consequences" and "The Merger Agreement" in the proxy statement is incorporated herein by reference. 

Item 8.           Fairness of the Transaction.

(a)   Fairness.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background Of The Merger," "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - Reasons For The Board Of Directors' Recommendation," "Special Factors - Fairness of the Merger to Stockholders" and "Special Factors - Position of the Executives as to the Fairness of the Merger" in the proxy statement is incorporated herein by reference.

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(b)    Factors Considered in Determining Fairness.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background Of The Merger," "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - Reasons For The Board Of Directors' Recommendation," "Special Factors - Fairness of the Merger to Stockholders," "Special Factors - Position of the Executives as to the Fairness of the Merger," "Special Factors - Opinion of Farragut Capital Group, Inc." in the proxy statement and Appendix B to the proxy statement is incorporated herein by reference.

(c)    Approval of Security Holders.  The information contained in the section entitled "Special Factors - Fairness of the Merger to Stockholders" in the proxy statement is incorporated herein by reference.

(d)    Unaffiliated Representative.  The information contained in the sections entitled "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - Fairness of the Merger to Stockholders" and "Special Factors - Opinion of Farragut Capital Group, Inc." in the proxy statement is incorporated herein by reference.

(e)    Approval of Directors.  The information contained in the sections entitled "Special Factors - Background Of The Merger," "Special Factors - Reasons For The Special Committee's Recommendation" and "Special Factors - Reasons For The Board Of Directors' Recommendation" in the proxy statement is incorporated herein by reference.

(f)    Other Offers.  The information contained in the section entitled "Special Factors - Background Of The Merger" in the proxy statement is incorporated herein by reference.

Item 9.           Reports, Opinions, Appraisals and Negotiations.

(a)    Report, Opinion or Appraisal.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background Of The Merger" and "Special Factors - Opinion of Farragut Capital Group, Inc." in the proxy statement is incorporated herein by reference.

(b)    Preparer and Summary of the Report, Opinion or Appraisal.  The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Background Of The Merger," "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - - Reasons For The Board Of Directors' Recommendation," "Special Factors - Opinion of Farragut Capital Group, Inc." in the proxy statement and Appendix B to the proxy statement is incorporated herein by reference.

(c)   Availability of Documents.  The information contained in Appendix B to the proxy statement is incorporated herein by reference.  The opinion of Farragut Capital Group, Inc. will be made available for inspection and copying at the principal executive officers of NetLojix during its regular business hours by any interested equity security holder of NetLojix or representative who has been so designated in writing.

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Item 10.         Source and Amounts of Funds or Other Consideration.

(a)    Source of Funds.  The information contained in the section entitled "Special Factors - NAC's Financing of the Merger" in the proxy statement is incorporated herein by reference.

(b)    Conditions.  The information contained in the section entitled "Special Factors - NAC's Financing of the Merger" in the proxy statement is incorporated herein by reference.

(c)    Expenses.  The information contained in the section entitled "The Special Meeting - Expenses of Proxy Solicitation" and "Special Factors - Estimated Fees and Expenses of the Merger" in the proxy statement is incorporated herein by reference.

(d)    Borrowed Funds.  The information contained in the section entitled "Special Factors - NAC's Financing of the Merger" in the proxy statement is incorporated herein by reference.

Item 11.         Interest in Securities of the Subject Company.

(a)    Securities Ownership.  The information contained in the section entitled "Security Ownership of Certain Beneficial Owners and Management" in the proxy statement is incorporated herein by reference.

(b)    Securities Transactions.  The information contained in the section entitled "Common Stock Purchase Information" in the proxy statement is incorporated herein by reference.

Item 12.         The Solicitation or Recommendation.

(d)   Intent to Tender or Vote in Going-Private Transaction.  The information contained in the sections entitled "Summary Term Sheet," "Questions and Answers About the Merger and the Special Meeting" and "The Special Meeting - Record Date and Voting Information" in the proxy statement is incorporated herein by reference.  The information set forth in response to Item 5(e) above is incorporated herein by reference.

(e)   Recommendations of Others. The information contained in the sections entitled "Questions and Answers About the Merger and the Special Meeting," "Special Factors - Reasons For The Special Committee's Recommendation," "Special Factors - Reasons For The Board Of Directors' Recommendation" and "Special Factors - Position of the Executives as to the Fairness of the Merger" in the proxy statement is incorporated herein by reference.

Item 13.         Financial Statements.

(a)   Financial Information.  The information contained in the section entitled "Information About NetLojix - Selected Financial Data" in the proxy statement and the consolidated financial statements attached to the proxy statement are incorporated herein by reference.

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(b)   Pro Forma Information. Not applicable.

Item 14.         Persons/Assets, Retained, Employed, Compensated or Used.

(a)   Solicitations or Recommendations.  The information contained in the sections entitled "The Special Meeting - Expenses of Proxy Solicitation," "Special Factors - Background of the Merger," "Special Factors - Opinion of Farragut Capital Group, Inc.," and "Special Factors - Estimated Fees and Expenses of the Merger" in the proxy statement is incorporated herein by reference.

(b)   Employees and Corporate Assets. The information contained in the sections entitled "The Special Meeting - Expenses of Proxy Solicitation" and "Special Factors - Estimated Fees and Expenses of the Merger" in the proxy statement is incorporated herein by reference.

Item 15.         Additional Information.

(b)   Other Material Information.  Not applicable.

Item 16.         Exhibits.

(a)   Preliminary proxy statement (incorporated herein by reference to the preliminary proxy statement on Schedule 14A filed by NetLojix Communications, Inc. with the Securities and Exchange Commission on December 30, 2002).

(b)   Letter agreement regarding financing commitment dated December 18, 2002 between NetLojix Acquisitions Corporation and DTL One, LLC.

(c)   Opinion of Farragut Capital Partners, Inc. dated December 28, 2002 (incorporated herein by reference to Appendix B to the preliminary proxy statement on Schedule 14A filed by NetLojix Communications, Inc. with the Securities and Exchange Commission on December 30, 2002).

(d)(1)  Agreement and Plan of Merger dated as of December 28, 2002, between NetLojix Communications, Inc. and NetLojix Acquisitions Corporation (incorporated herein by reference to Appendix A to the preliminary proxy statement on Schedule 14A filed by NetLojix Communications, Inc. with the Securities and Exchange Commission on December 30, 2002).

(d)(2)   Letter agreement between Jeffrey J. Jensen and Next2 Partners, LLC.

(d)(3)  Letter agreement between Jami J. Jensen and Next2 Partners, LLC.

(d)(4)  Letter agreement between Julie J. Jensen and Next2 Partners, LLC.

(f)   Section 262 of the Delaware General Corporation Law (incorporated herein by reference to Appendix C to the preliminary proxy statement on Schedule 14A filed by NetLojix Communications, Inc. with the Securities and Exchange Commission on December 30, 2002).

(g)   Not applicable.

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SIGNATURES

After due inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

Dated:  December 30, 2002

NETLOJIX COMMUNICATIONS, INC.

By  /s/ ANTHONY E. PAPA          
            Anthony E. Papa
            Chief Executive Officer

NETLOJIX ACQUISITIONS CORPORATION

By  /s/ ANTHONY E. PAPA          
            Anthony E. Papa
            Chief Executive Officer

 /s/ ANTHONY E. PAPA          
            Anthony E. Papa

 /s/  JAMES P. PISANI             
            James P. Pisani

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EX-99.B

Exhibit (b)

DTL ONE, LLC
6500 Beltline Road, Suite 170,
Irving, Texas 75063

December 18, 2002

Anthony E. Papa
James P. Pisani
NetLojix Acquisitions Corporation
Santa Barbara, CA 93101

                        Re:       Commitment to Lend

Dear Tony and Jim:

            This letter will memorialize our recent discussions regarding the commitment of DTL One, LLC ("Lender") to lend money to NetLojix Acquisitions Corporation, a corporation to be formed by the two of you ("NAC"), in connection with your acquisition of all of the outstanding common stock of NetLojix Communications, Inc. (the "Acquisition").  You expect that the Acquisition will be effected by the merger of NAC with and into NetLojix.

            Lender hereby commits to make the loan on the following terms:

• Principal Amount.  The amount to be loaned by DTL will be $300,000.
• Interest.  The interest rate will be the greater of Prime plus 2 percent not to exceed seven percent (7%) per annum in Year 1; not to exceed eight percent (8%) in Year 2; not to exceed nine percent (9%) in Year 3; not to exceed ten percent (10%) in Years 4 and 5.
• Maturity.  If NAC successfully completes the Acquisition, then the Principal Amount of the loan will be combined with the balance then outstanding under Lender's Loan and Security Agreement dated January 31, 2002, with NetLojix (the "NetLojix Loan"), and the resulting amount will be amortized over a five-year period commencing on the closing date of the Acquisition.  Payment will be on a monthly basis.
• Security.  If NAC successfully completes the Acquisition, the loan will be secured by the assets of NetLojix on the same basis as the NetLojix Loan.
• Mandatory Prepayment in Event of Asset Sales.  If, after the closing of the Acquisition, NetLojix sells any substantial portion of its assets other then in the ordinary course of business, then one-half of the net proceeds from such asset sales will be used to prepay the loan.
• Consent by Lender.  To the extent required by the NetLojix Loan documents, Lender will consent to the Acquisition and all related transactions.  After the closing of the Acquisition, Lender will consent to the reorganization of NetLojix from a "C" corporation into an "S" corporation or limited liability company, at your request.

If this letter accurately describes our agreement, please so signify by signing the enclosed copy of this letter and returning it to me.  If you have any questions concerning this letter, please call me.

Sincerely,

DTL ONE, LLC,

a Nevada limited liability company

By:     /s/ JEFFREY J. JENSEN         

            Jeffrey J. Jensen, Manager

ACCEPTED AND AGREED:

 NETLOJIX ACQUISITIONS CORPORATION.
a company  in formation

           /s/ ANTHONY E. PAPA          
Anthony E. Papa

           /s/ JAMES P. PISANI               
James P. Pisani

EX-99.D2

Exhibit (d)(2)

NEXT2 PARTNERS, LLC
68 Alameda Padre Serra
Santa Barbara, California 93103

December 8, 2002

Jeff Jensen
7802 Leesburg Drive
Colleyville, TX 76034

        This letter will confirm our agreement concerning the terms of the purchase from you ("Seller") of 851,738 shares (the "Shares") of the common stock of NetLojix Communications, Inc. ("NetLojix") by Next2 Partners, LLC ("Next2").

1.                 Purchase and Sale.  Next2 hereby agrees to purchase, and Seller hereby agrees to sell, the Shares, subject to the terms and conditions set forth below, for an aggregate of $17,034.76.

2.                 The Closing.  The closing of the purchase of the Shares (the "Closing") shall take place by 5:00 PM Central Time on December 30, 2002, if all conditions to Closing set forth in paragraph 3 have been satisfied or waived by Next2.

3.                 Conditions to Closing.

The obligation of Next2 to purchase the Shares is subject to the satisfaction, on or prior to Closing, of each of the following conditions:

            3.1        The representations of Seller in this agreement shall be true and correct in all material respects on the Closing date as if made on that date;

            3.2        The absence of any proceeding before any court or governmental authority, domestic or foreign, relating to the Shares, or to which Seller or Next2 is a party;

4.                 Representations of Next2.  Next2 hereby represents, warrants and covenants to Seller that: (a) Next2 is duly organized, validly existing and in good standing under the laws of the State of California and has all requisite corporate power and authority to enter into this agreement and to purchase the Shares; (b) the execution and delivery of this agreement and the performance of its obligations hereunder have been duly authorized by all necessary company action on the part of Next2; (c) Next2 is acquiring the Shares for investment and for Next2's own account, and not with a view to or for sale in connection with any distribution of any part thereof; (d) Next2 is an "accredited investor" as that term is defined in Rule 501(a) promulgated by the Securities and Exchange Commission (the "SEC"). Next2 has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the risks of an investment in the Shares.

5.                 Representations of Seller.  Seller hereby represents, warrants and covenants to Next2 that: (a) Seller has the legal power and authority to enter into and perform this agreement; (b); Seller and Seller's Spouse jointly owns the Shares, beneficially and of record, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (c) Seller will transfer to Next2 at the Closing, good and marketable title to the Shares, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (d) no consents or approvals of any third parties are required on Seller's part in connection with the sale and transfer of the Shares; (e) the Shares constitute all of Seller's interest in NetLojix, and Seller has no other ownership interests or options in NetLojix or claims against NetLojix; (e) Seller will use Seller's best efforts to cooperate with Next2 to facilitate the successful completion of the transactions contemplated hereby. 

            Seller further represents and warrants that Seller has received copies of NetLojix's (i) Annual Report on Form 10-K for the year ended December 31, 2001, (ii) Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, and (iii) Current Report on Form 8-K dated December 2, 2002, each as filed with the SEC. Seller has had the opportunity to obtain information with respect to NetLojix and its plans, operations and financial condition, and has heretofore received all such information as Seller has deemed necessary and appropriate to enable Seller to evaluate the sale of the Shares.  Seller understands that affiliates of Next2 have proposed to acquire all of the outstanding stock of NetLojix at a price of $.02 per share, and that the final price in any such transaction may be higher.

6.                 Restricted Securities.  Next2 acknowledges and agrees that:

            6.1      No Registration.  The Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and must be held indefinitely unless such Shares are subsequently registered under the Act and qualified under such state laws or an exemption from such registration and qualification is available. NetLojix is under no obligation (contractual or otherwise) to register any of such Shares under any circumstances.  The share certificate representing such Shares will be stamped with a legend  indicating that the securities have not been registered.

            6.2       Rule 144 and Public Resales.  Any public resales of the Shares permitted under this Agreement will be made in accordance with Rule 144 promulgated by the SEC. 

7.                 General Provisions. 

            7.1       Amendments, etc.  This Agreement may be amended or its provisions waived only by agreement in writing of all parties.  This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the parties in connection therewith.

            7.2        Governing Law; Jurisdiction.  This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of California, excluding any laws that direct the application of another jurisdiction's laws. 

            7.3        Assignment.  The rights of Seller under this Agreement shall not be assignable.  Netx2 may assign this agreement, and the right to purchase the Shares, without the consent of Seller.

            7.4        Counterparts.  This Agreement (and any amendment hereto or any other document delivered pursuant hereto) may be executed in one or more counterparts. The facsimile transmission of any original signed counterpart of this Agreement (or any amendment hereto or any other document delivered pursuant hereto) shall be treated for all purposes as the delivery of an original signed counterpart.

            If the foregoing correctly sets forth our mutual understanding, please execute and return one copy of this letter to the undersigned.

Very truly yours,

NEXT2 PARTNERS, LLC

By    /s/ ANTHONY E. PAPA        

            Anthony E. Papa

            Manager

Agreed to and accepted:

"Seller"

   /s/ JEFFREY J. JENSEN        
Jeff Jensen

"Seller's Spouse"

    /s/ LOU ANNE JENSEN       
Lou Anne Jensen

EX-99.D3

Exhibit (d)(3)

NEXT2 PARTNERS, LLC
68 Alameda Padre Serra
Santa Barbara, California 93103

December 18, 2002

Jami Jensen
Crooked Willow Farms
10554 S. Perry Park Road
Larkspur, CO 80118

            This letter will confirm our agreement concerning the terms of the purchase from you ("Seller") of 851,738 shares (the "Shares") of the common stock of NetLojix Communications, Inc. ("NetLojix") by Next2 Partners, LLC ("Next2").

1.                 Purchase and Sale.  Next2 hereby agrees to purchase, and Seller hereby agrees to sell, the Shares, subject to the terms and conditions set forth below, for an aggregate of $17,034.76.

2.                 The Closing.  The closing of the purchase of the Shares (the "Closing") shall take place by December 30, 2002, if all conditions to Closing set forth in paragraph 3 have been satisfied or waived by Next2.

3.                 Conditions to Closing.

The obligation of Next2 to purchase the Shares is subject to the satisfaction, on or prior to Closing, of each of the following conditions:

            3.1        The representations of Seller in this agreement shall be true and correct in all material respects on the Closing date as if made on that date;

            3.2        The absence of any proceeding before any court or governmental authority, domestic or foreign, relating to the Shares, or to which Seller or Next2 is a party;

4.                 Representations of Next2.  Next2 hereby represents, warrants and covenants to Seller that: (a) Next2 is duly organized, validly existing and in good standing under the laws of the State of California and has all requisite corporate power and authority to enter into this agreement and to purchase the Shares; (b) the execution and delivery of this agreement and the performance of its obligations hereunder have been duly authorized by all necessary company action on the part of Next2; (c) Next2 is acquiring the Shares for investment and for Next2's own account, and not with a view to or for sale in connection with any distribution of any part thereof; (d) Next2 is an "accredited investor" as that term is defined in Rule 501(a) promulgated by the Securities and Exchange Commission (the "SEC"). Next2 has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the risks of an investment in the Shares.

5.                 Representations of Seller.  Seller hereby represents, warrants and covenants to Next2 that: (a) Seller has the legal power and authority to enter into and perform this agreement; (b) Seller owns the Shares, beneficially and of record, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (c) Seller will transfer to Next2 at the Closing, good and marketable title to the Shares, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (d) no consents or approvals of any third parties are required on Seller's part in connection with the sale and transfer of the Shares; (e) the Shares constitute all of Seller's interest in NetLojix, and Seller has no other ownership interests or options in NetLojix or claims against NetLojix; (e) Seller will use Seller's best efforts to cooperate with Next2 to facilitate the successful completion of the transactions contemplated hereby. 

            Seller further represents and warrants that Seller has received copies of NetLojix's (i) Annual Report on Form 10-K for the year ended December 31, 2001, (ii) Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, and (iii) Current Report on Form 8-K dated December 2, 2002, each as filed with the SEC. Seller has had the opportunity to obtain information with respect to NetLojix and its plans, operations and financial condition, and has heretofore received all such information as Seller has deemed necessary and appropriate to enable Seller to evaluate the sale of the Shares.  Seller understands that affiliates of Next2 have proposed to acquire all of the outstanding stock of NetLojix at a price of $.02 per share, and that the final price in any such transaction may be higher.

6.                 Restricted Securities.  Next2 acknowledges and agrees that:

            6.1    No Registration.  The Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and must be held indefinitely unless such Shares are subsequently registered under the Act and qualified under such state laws or an exemption from such registration and qualification is available. NetLojix is under no obligation (contractual or otherwise) to register any of such Shares under any circumstances.  The share certificate representing such Shares will be stamped with a legend  indicating that the securities have not been registered.

            6.2     Rule 144 and Public Resales.  Any public resales of the Shares permitted under this Agreement will be made in accordance with Rule 144 promulgated by the SEC. 

7.                 General Provisions. 

            7.1      Amendments, etc.  This Agreement may be amended or its provisions waived only by agreement in writing of all parties.  This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the parties in connection therewith.

            7.2       Governing Law; Jurisdiction.  This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of California, excluding any laws that direct the application of another jurisdiction's laws. 

            7.3     Assignment.  The rights of Seller under this Agreement shall not be assignable.  Netx2 may assign this agreement, and the right to purchase the Shares, without the consent of Seller.

             7.4      Counterparts.  This Agreement (and any amendment hereto or any other document delivered pursuant hereto) may be executed in one or more counterparts. The facsimile transmission of any original signed counterpart of this Agreement (or any amendment hereto or any other document delivered pursuant hereto) shall be treated for all purposes as the delivery of an original signed counterpart.

            If the foregoing correctly sets forth our mutual understanding, please execute and return one copy of this letter to the undersigned.

Very truly yours,

NEXT2 PARTNERS, LLC

By    /s/ ANTHONY E. PAPA        

            Anthony E. Papa

            Manager

Agreed to and accepted:

"Seller"

       /s/ JAMI J. JENSEN    
Jami Jensen

EX-99.D4

Exhibit (d)(4)

NEXT2 PARTNERS, LLC
68 Alameda Padre Serra
Santa Barbara, California 93103

December 8, 2002

Julie Jensen
Box 540
Kenwood Station
5757 River Road
Bethesda, MD 20816

            This letter will confirm our agreement concerning the terms of the purchase from you ("Seller") of 851,738 shares (the "Shares") of the common stock of NetLojix Communications, Inc. ("NetLojix") by Next2 Partners, LLC ("Next2").

1.                 Purchase and Sale.  Next2 hereby agrees to purchase, and Seller hereby agrees to sell, the Shares, subject to the terms and conditions set forth below, for an aggregate of $17,034.76.

2.                 The Closing.  The closing of the purchase of the Shares (the "Closing") shall take place by December 30, 2002, if all conditions to Closing set forth in paragraph 3 have been satisfied or waived by Next2.

3.                 Conditions to Closing.

The obligation of Next2 to purchase the Shares is subject to the satisfaction, on or prior to Closing, of each of the following conditions:

            3.1      The representations of Seller in this agreement shall be true and correct in all material respects on the Closing date as if made on that date;

            3.2       The absence of any proceeding before any court or governmental authority, domestic or foreign, relating to the Shares, or to which Seller or Next2 is a party;

4.                 Representations of Next2.  Next2 hereby represents, warrants and covenants to Seller that: (a) Next2 is duly organized, validly existing and in good standing under the laws of the State of California and has all requisite corporate power and authority to enter into this agreement and to purchase the Shares; (b) the execution and delivery of this agreement and the performance of its obligations hereunder have been duly authorized by all necessary company action on the part of Next2; (c) Next2 is acquiring the Shares for investment and for Next2's own account, and not with a view to or for sale in connection with any distribution of any part thereof; (d) Next2 is an "accredited investor" as that term is defined in Rule 501(a) promulgated by the Securities and Exchange Commission (the "SEC"). Next2 has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the risks of an investment in the Shares.

5.                 Representations of Seller.  Seller hereby represents, warrants and covenants to Next2 that: (a) Seller has the legal power and authority to enter into and perform this agreement; (b) Seller owns the Shares, beneficially and of record, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (c) Seller will transfer to Next2 at the Closing, good and marketable title to the Shares, free and clear of all liens, claims, pledges and encumbrances, of every kind, character and description whatsoever; (d) no consents or approvals of any third parties are required on Seller's part in connection with the sale and transfer of the Shares; (e) the Shares constitute all of Seller's interest in NetLojix, and Seller has no other ownership interests or options in NetLojix or claims against NetLojix; (e) Seller will use Seller's best efforts to cooperate with Next2 to facilitate the successful completion of the transactions contemplated hereby. 

            Seller further represents and warrants that Seller has received copies of NetLojix's (i) Annual Report on Form 10-K for the year ended December 31, 2001, (ii) Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, and (iii) Current Report on Form 8-K dated December 2, 2002, each as filed with the SEC. Seller has had the opportunity to obtain information with respect to NetLojix and its plans, operations and financial condition, and has heretofore received all such information as Seller has deemed necessary and appropriate to enable Seller to evaluate the sale of the Shares.  Seller understands that affiliates of Next2 have proposed to acquire all of the outstanding stock of NetLojix at a price of $.02 per share, and that the final price in any such transaction may be higher.

6.                 Restricted Securities.  Next2 acknowledges and agrees that:

            6.1      No Registration.  The Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws and must be held indefinitely unless such Shares are subsequently registered under the Act and qualified under such state laws or an exemption from such registration and qualification is available. NetLojix is under no obligation (contractual or otherwise) to register any of such Shares under any circumstances.  The share certificate representing such Shares will be stamped with a legend  indicating that the securities have not been registered.

            6.2       Rule 144 and Public Resales.  Any public resales of the Shares permitted under this Agreement will be made in accordance with Rule 144 promulgated by the SEC. 

7.                 General Provisions. 

            7.1      Amendments, etc.  This Agreement may be amended or its provisions waived only by agreement in writing of all parties.  This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the parties in connection therewith.

            7.2      Governing Law; Jurisdiction.  This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of California, excluding any laws that direct the application of another jurisdiction's laws. 

            7.3     Assignment.  The rights of Seller under this Agreement shall not be assignable.  Netx2 may assign this agreement, and the right to purchase the Shares, without the consent of Seller.

            7.4       Counterparts.  This Agreement (and any amendment hereto or any other document delivered pursuant hereto) may be executed in one or more counterparts. The facsimile transmission of any original signed counterpart of this Agreement (or any amendment hereto or any other document delivered pursuant hereto) shall be treated for all purposes as the delivery of an original signed counterpart.

            If the foregoing correctly sets forth our mutual understanding, please execute and return one copy of this letter to the undersigned.

Very truly yours,

NEXT2 PARTNERS, LLC

By    /s/ ANTHONY E. PAPA        

            Anthony E. Papa

            Manager

Agreed to and accepted:

"Seller"

        /s/ JULIE J. JENSEN        
Julie Jensen