EXHIBIT 10.2

                           PURCHASE AND SALE AGREEMENT

         THIS  AGREEMENT  is made by and between CSI BUSINESS  FINANCE,  INC., a
Texas company  ("Factor"),  whose address is 109 North Post Oak Lane, Suite 109,
Houston, Texas 77024, and ATSI COMMUNICATIONS, INC , a Nevada corporation, whose
address is 8600 Wurzbach, Suite 700W, San Antonio, TX 78240 (the "Seller").

         WHEREAS,  Factor is engaged in,  among other  things,  the  business of
purchasing accounts receivable and other rights to payment from persons or firms
selling goods or rendering  services to others,  and Seller desires from time to
time to sell  accounts  receivable  and other  rights to Factor  pursuant to the
terms of this Agreement;

                                   DEFINITIONS

         "Account  Debtor"  shall mean the party or parties  obligated  to pay a
Receivable.

         "Agreement" shall mean this Purchase and Sale Agreement,  together with
the Schedules attached hereto.

         "Avoidance  Claim"  shall mean any claim that any  payment  received by
Factor  from or for the  account of an  Account  Debtor is  avoidable  under the
Bankruptcy Code or any other debtor relief statute.

         "Collateral"  shall have the meaning  ascribed  thereto in the Security
Agreement.

         "Dispute" shall mean any dispute,  deduction, claim, offset, defense or
counterclaim  of any kind  asserted  by an Account  Debtor and  pertaining  to a
Receivable or the goods or services giving rise thereto.

         "Factor"  shall have the meaning  given in the first  paragraph of this
Agreement.

         "Legal  Holiday"  shall  mean any day on  which  national  banks  doing
business in the State of Texas are closed for regular business.

         "Misdirected  Payment  Fee" shall mean five percent (5 %) of the amount
of any payment on account of a Receivable, which has been received by Seller and
not  delivered in kind to Factor on the next  business day following the date of
receipt by Seller.

         "Payments" shall have the meaning given in Section 31 of this Agreement

         "Purchase  Price"  shall  have the  meaning  given in Section 6 of this
Agreement.



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<PAGE>

         "Receivables"  shall mean the  accounts  receivable  and other forms of
rights to payment described on Schedule A attached hereto and/or as set forth on
a supplemental  Schedule A to be attached in the future and signed by Factor and
Seller.

         "Reserve  Account"  shall have the  meaning  given in Section 7 of this
Agreement.

         "Reserve Payment  Worksheet" shall have the meaning given in Section 14
of this Agreement.

         "Secured  Liabilities"  shall have the meaning  ascribed thereto in the
Security Agreement.

         "Security Agreement" shall mean that certain Security Agreement between
Factor and Seller executed of even date herewith.

         "Seller"  shall have the meaning  given in the first  paragraph of this
Agreement.

         "UCC" shall mean the Texas Uniform Commercial Code.

                                    AGREEMENT

         For and in consideration of the mutual promises herein  contained,  and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, Factor and Seller hereby agree as follows:

         1. Purchase and Sale of Accounts  Receivable  and other Rights.  Seller
hereby sells, assigns, transfers, conveys and delivers to Factor, as an outright
conveyance  and not as a security  interest  all right,  title and  interest  of
Seller in the  Receivables  and other  forms of rights to payment  described  on
Schedule  A  attached  hereto  and made a part  hereof.  Seller  represents  and
warrants  that in the event  invoices are attached to Schedule A, such  invoices
represent true and correct copies of invoices for the Receivables.  In the event
Schedule  A is not  attached  to this  Agreement  at the  time  of its  original
execution,  the  parties  agree that actual  purchases  of  receivables  will be
evidenced by the  completion  and execution by both parties of Schedule A in the
future.  Whether or not an initial Schedule A is attached to this Agreement,  it
is  anticipated  that  additional  Receivables  will be sold by Seller to Factor
(although  Factor is not agreeing to purchase any  particular  Receivable or any
additional  Receivables  hereby), and such future purchases will be evidenced by
the completion and execution of additional schedules in form similar to Schedule
A. Upon execution by both Factor and Seller of such a supplemental schedule, the
accounts  receivable  described therein shall become Receivables  subject in all
respects  to  the  terms  of  this  Agreement.   Seller  acknowledges  that  the
transactions   contemplated   by  Agreement   are  each  an  "Account   Purchase
Transaction"  as that term is used in Finance Code Section  306.001 of the Texas
Codes.



                                      -2-
<PAGE>

         2. Returned Receivables. Seller has herein represented and warranted to
Factor that all  Receivables  are free and clear of any Disputes.  Seller hereby
acknowledges  that  Factor  would not  purchase  any  Receivable  if Factor  had
knowledge that the same was subject to a Dispute.  Seller agrees that should (i)
Seller or Factor discover that any  Receivables  are subject to a Dispute,  (ii)
any  Receivable  be owing from an Account  Debtor  which in Factor's  reasonable
credit judgment has become  insolvent,  or (iii) any  representation or warranty
with  respect  to a  Receivable  provided  in  Section  11 below be false in any
respect,  Factor shall have the right to return such  Receivable(s) to Seller in
accordance with this Section 2 and other applicable  Sections of this Agreement.
Seller  must  immediately  notify  Factor of any  Disputes  upon  receipt of its
knowledge  thereof.  Any receivable that is not collected  within 90 days of its
purchase by Factor  pursuant to the terms  hereof  shall be deemed  subject to a
Dispute.  Upon Factor's election to return and charge-back a Receivable  subject
to a Dispute, Seller shall pay to Factor the face amount of the invoice less the
sum of any  payments  theretofore  received  on such  invoice  by Factor and any
unearned discount. In order to fund such return and charge-back,  Factor may, at
its  option,  take any one or more of the  following  actions:  (a)  charge  the
Reserve  Account for such  amount,  (b)  subtract  such amount from the Purchase
Price for the next Receivable sold by Seller to Factor, or (c) otherwise invoice
Seller for such amount,  with such invoice  being  payable  upon  receipt.  Upon
payment to Factor of such amount,  Factor  shall  assign,  transfer,  convey and
deliver such Receivable to Seller without recourse.

         3.  Transfer of Related  Interests.  In  addition  to the  Receivables,
Seller  hereby  sells,  assigns,  transfers,  conveys and delivers to Factor all
other  rights,  title  and  interests  (but not  obligations)  now or  hereafter
existing in  connection  with the  Receivables,  including,  but not limited to,
liens,  security  interests and guarantees  securing payment of the Receivables,
Seller's interest in returned goods arising with respect to the Receivables, and
all other  rights and  remedies  of Seller  related to the  Receivables  such as
rights of stoppage in transit, replevin, reclamation and lawsuits to collect the
Receivables. If any Receivable is ever represented by a promissory note or other
written  evidence of  obligation,  Seller shall  endorse and deliver the same to
Factor  and take any  other  action  requested  by  Factor  to  effectuate  such
transfer.

         4. Further  Assurances.  Seller agrees to execute and deliver to Factor
such notices of assignment  and other  documents as Factor may request from time
to time to further document the sale and assignment of Receivables hereunder.

         5. Terms - Seller's Customers.  Except as may otherwise be agreed to in
writing  from time to time,  all  Receivables  shall be due upon  receipt by the
Account Debtor of the invoice from Seller,  and invoices to be factored pursuant
hereto will be forwarded to the Account Debtor upon delivery of the goods or the
services that are the subject of the Receivable. Seller shall not vary the terms
of sale,  terms of  payment,  or  location  of payment  set forth in the invoice
relating to any  Receivable  without  Factor's prior written  consent,  it being
understood that any Receivable is the property of Factor.



                                      -3-
<PAGE>

         6. Purchase  Price;  Discounts;  Additional  Fees.  The Purchase  Price
(herein so called) for  Receivables  shall be the gross  amount of the  invoice,
including any miscellaneous  charges such as sales taxes, less any early payment
or special  discounts offered to Seller's  customers as previously  disclosed to
Factor, and less a discount equal to 10% of such gross amount of the invoice. As
an inducement  for Seller to sell only invoices from which prompt payment can be
expected,  Factor will remit a rebate as follows.  If Factor receives payment of
an invoice  within 15 days of the  purchase  thereof,  a rebate of 8.75 % of the
gross  amount of the  invoice  will be remitted  to Seller;  if Factor  receives
payment of an invoice after 15 days, but on or before 30 days of the purchase, a
rebate of 7.5% of the gross  amount of the  invoice  will be remitted to Seller.
Until an  invoice is  collected  or is  repurchased  by  Seller,  an  additional
factoring fee shall accrue and be owing after 30 days in the amount of 5% of the
gross  amount of the  invoice for each 15 day period (or  portion  thereof)  the
invoice remains  uncollected or not repurchased after 30 days. A Seller shall be
permitted  to  stop  the  accrual  of any  such  additional  fee at any  time by
repurchasing the uncollected invoice. ( Any account that is 30 days past due and
subject  to the  additional  factoring  fee will be  identified  in the  reserve
payment  worksheet  defined in Section 14 below.  In  addition to the other fees
described  herein,  Seller  shall  pay to Factor  the  Misdirected  Payment  Fee
immediately  upon its accrual.  The Purchase  Price,  less the deduction for the
Reserve Account  described  below,  shall be paid only after execution by Seller
and Factor of a Schedule covering such Receivable.  Any applicable rebates shall
be credited to the Reserve  Account (as defined in Section 7) upon collection of
each Receivable.

         7. Payments on Accounts Purchased;  Reserve Account. In addition to the
discount  set forth in Section 6 hereof,  Factor  shall deduct from the Purchase
Price of each Receivable an amount initially equal to 10% of the gross amount of
the  Receivable,  such  deduction to be placed in an account under the exclusive
control of Factor (as further described in this Section 7, herein referred to as
the "Reserve Account"). The balance in the Reserve Account shall at all times be
maintained in a minimum amount equal to no less than 10% of the aggregate  gross
amount of all Receivables  outstanding at a particular time; provided,  however,
(i) the applicable percentage deduction from the Purchase Price described in the
immediately  preceding  sentence may be increased as necessary to maintain  such
minimum  balance,  and (ii) the amount  required to be maintained in the Reserve
Account as a percentage of the gross amount of all  Receivables  outstanding may
be increased or decreased upon notice by Factor to Seller.  Upon  preparation of
the Reserve  Payment  Worksheet  (as such term is defined in Section 14 hereof),
Factor shall release to Seller amounts, if any, in the Reserve Account in excess
of the balance  required  pursuant to this Section 7. The Reserve  Account shall
accrue no interest.

         8. Offset; Security Interest. Factor is authorized to offset and charge
against the Reserve Account any amount for which Seller may become  obligated to
Factor at any time under this Agreement or otherwise.  In addition to such right
of offset and for the purpose of  securing  Factor in the payment of any and all
sums of money that may become due and owing to Factor from Seller, Seller agrees
to grants to Factor a lien and security  interest in certain of its assets,  all
pursuant to and as described in the Security  Agreement.  To the extent that the
sale to Factor of any Collateral is deemed  inconsistent  with the granting of a
security  interest  pursuant to the Security  Agreement,  the security  interest
granted in the Security Agreement as to such Collateral only shall automatically
terminate and be of no further force and effect. The terms of the prior sentence
to the contrary  notwithstanding,  in the event a Receivable is  charged-back as
provided in Section 2 hereof, such account shall then constitute  Collateral and
be then subject to a new  security  interest in favor of Factor.  Seller  agrees
that Factor may file financing  statements from time to time to perfect Factor's
security interest in the Collateral.



                                      -4-
<PAGE>

         9.  Verification and Collection of Accounts.  Seller hereby  authorizes
Factor to contact each Account  Debtor at any time for purposes of  verification
or collection of Receivables.  Seller shall cooperate with Factor to the maximum
extent  possible  to provide  information  necessary  for  Factor to  accomplish
verification or collection of any Receivable.  Unless otherwise agreed by Factor
in writing,  Seller shall provide the original  invoice and any necessary copies
required by the Account Debtor and one copy to Factor ready for mailing with the
required  postage to the Account Debtor.  All invoices shall direct that payment
be made to a post office box or other address owned and controlled by Factor, to
be provided by Factor. If requested by Factor, Seller agrees to furnish evidence
of shipment of the related  merchandise and/or performance of services rendered,
and a  written  assignment  and bill of sale of such  Receivable,  all in a form
satisfactory to Factor,  including the original  purchase order from the Account
Debtor. If requested by Factor, all invoices for Receivables shall plainly state
on their  faces in  language  acceptable  to  Factor  that the  amounts  payable
thereunder have been sold to and are payable  directly to Factor.  If payment is
made to Seller under any  circumstances,  such payment shall be held in trust by
Seller for Factor and shall not be  negotiated or commingled in any way with any
of Seller's funds. Notwithstanding that Seller has agreed to pay the Misdirected
Payment Fee,  Seller shall,  within one business day after receipt,  deliver any
such payments to Factor in the original form as received by Seller. In the event
the form of such  payment is made payable to Seller,  Seller shall  endorse such
instrument  to the order of Factor.  In the event that on at least two occasions
within a twelve  month  period,  Seller  does not  deliver to Factor  within one
business day payments  that were made by an Account  Debtor  directly to Seller,
Factor  shall be  permitted,  upon three  days  notice to  Seller,  to  redirect
Seller's mail to Factor.  Seller agrees to furnish Factor, upon request, any and
all  papers,  documents  or records  of  whatever  nature  related  directly  or
indirectly, to any Receivables.

         10. Collection by Factor. Seller specifically authorizes Factor, to the
extent  permitted  by  applicable  law,  to notify  each  Account  Debtor to pay
directly to Factor all accounts that are  Receivables or Collateral,  regardless
of  whether  Seller  has  defaulted  hereunder.  Factor is  authorized,  but not
obligated,  to collect,  sue for and give releases for all monies or other items
of value due on all  Receivables.  Factor is hereby  specifically  authorized to
endorse all checks,  drafts or other  forms of trade  acceptances  that are made
payable to Seller, whether tendered in payment of Receivables or otherwise,  and
to apply such payments  against the applicable  Receivables  or, if such payment
does not relate to a  particular  Receivable,  against any other  obligation  of
Seller to Factor.  Seller  authorizes  Factor to accept,  indorse and deposit on
behalf of Seller any checks  tendered by an account  debtor "in full payment" of
its  obligation  to Seller.  Seller  shall not assert  against  Factor any claim
arising  therefrom,  irrespective  of whether  such action by Factor  effects an
accord and  satisfaction  of  Seller's  claims,  under  ss.3-311  of the Uniform
Commercial Code, or otherwise.  Seller hereby waives notice of nonpayment of any
Receivables,  as well as all other notices, demands or presentations for payment
hereunder, and Seller expressly agrees that Factor may extend or renew from time
to time the payment of any Receivable without notice to or consent by Seller. In
the event it becomes  necessary for Factor to employ an attorney and incur other
expenses  to  collect  any  Receivable  or to  enforce  any of the terms of this
Agreement  by reason of a breach or default by Seller,  Seller  agrees to pay to
Factor an amount equal to all  reasonable  attorneys'  fees,  expenses and costs
incurred by Factor.  In the event any merchandise  represented by any Receivable
shall be returned to or repossessed  by the Seller,  such  merchandise  shall be
held by the Seller in trust for Factor, separate and apart from the Seller's own
property,  and subject to Factor's  directions and control.  With respect to any
returned or repossessed merchandise, Seller shall, at its sole cost and expense,
(a) provide proper storage therefor,  (b) maintain adequate  insurance  coverage
thereon,  (c) prepare the same for sale, (d) defend title thereto,  (e) take any
other  action  necessary  for the  protection  thereof,  (f) pay all freight and
related  shipping costs,  and (g) be responsible for any other costs or expenses
incurred  in  connection  with the  foregoing,  including,  without  limitation,
attorneys' fees. In order to satisfy any of the Secured  Liabilities,  Factor is
hereby  authorized  by Seller to  initiate  electronic  debit or credit  entries
through  the ACH system to any deposit  account  maintained  by Seller  wherever
located.



                                      -5-
<PAGE>

         11. Representations and Warranties of Seller. Seller hereby represents,
warrants  and  guarantees  to  Factor  that  the  information  contained  in any
application  previously  submitted by Seller,  Seller's financial statements and
any other materials previously submitted in connection herewith is true, correct
and complete in all material respects as of the date specified therein and fully
and  accurately  represent  the  financial  condition  of Seller as of the dates
specified,  with no material  adverse  change  having  occurred in the financial
condition of the Seller since the dates of the most recent financial statements;
that all  federal,  state and local tax returns and  payments of any kind due or
owing  have  been  filed  or paid,  and no part of the  Purchase  Price  for any
Receivable  shall  be  used  to  pay  any  wage  or  salary  unless  appropriate
withholdings  have been  deposited;  that  assignment  of each  Receivable  will
thereby  vest in Factor  absolute  ownership  of each  Receivable  free from any
liens, claims or equities of third parties; that Seller is the sole owner of and
has good, free and  unencumbered  title to each  Receivable;  that execution and
performance  of this  Agreement  has  been  fully  authorized  by all  necessary
actions;  that no assignment,  pledge,  security interest or encumbrance  exists
with respect to any  Receivable;  that each Receivable is based upon a bona fide
sale of goods or  services  and  represents  a completed  delivery or  completed
furnishing  of  property  or  services  in  fulfillment  of all  the  terms  and
provisions of a fully  executed and unexpired  contract with the Account  Debtor
and is a valid and  enforceable  obligation  of the  Account  Debtor;  that each
Account  Debtor  has  accepted  goods  or  services  covered  by the  applicable
Receivable;  that all Receivables  are current,  are not past due, have not been
paid in whole or in part, are outstanding in the amounts reflected in Schedule A
and are not and will  not be  subject  to any  dispute  or  claim  as to  price,
quality, quantity, physical condition,  workmanship, delay in shipment, set off,
counterclaim  or other  defense,  that no product or service  was  provided on a
guaranteed-sale basis or buy-back agreement,  and the Account Debtor has not and
will not claim any  defense  of any kind or  character  or object for any reason
whatsoever  against  payment of such  Receivable;  that Seller's chief executive
office  and  the  location  where  all  books  and  records  pertaining  to each
Receivable are kept are at the address shown below for notice to Seller;  and no
Receivable is subject to a Dispute.  Seller further represents and warrants that
Seller is a corporation  duly organized,  validly existing under the laws of the
state of its  incorporation  and in good standing under the laws of the State of
Texas;  that Seller is solvent,  properly licensed and authorized to operate the
business  under the trade name  represented  within  the  meaning of any and all
applicable federal, state or local laws; that no petition in bankruptcy has been
filed by or  against  Seller  nor has  Seller  filed  any  petition  seeking  an
arrangement  of its debts or for any other relief under the  Bankruptcy  Code of
the United States;  that no application for appointment of a receiver or trustee
for all or a substantial part of Seller's  property is pending;  and that Seller
has made no assignment  for the benefit of creditors.  Seller  further  warrants
that  Seller  does  not own,  control  or  exercise  dominion  over,  in any way
whatsoever,  the business of any Account  Debtor and that the Account  Debtor is
solvent to the best knowledge and information of Seller.



                                      -6-
<PAGE>

         12.  Certain  Covenants of Seller.  Seller  covenants and agrees to (i)
notify  Factor in writing  immediately  upon any Dispute and upon  imposition or
assessment of any lien,  levy,  tax lien,  assessment or similar  action against
Seller or any of Seller's assets; and (ii) furnish Factor, upon request, any and
all  papers,  documents  or records  of  whatever  nature  related  directly  or
indirectly to any  Receivables.  Seller agrees that it will not,  without prior,
written notice to Factor,  (a) sell or factor  accounts other than to Factor for
the period of this Agreement;  (b) move either its chief executive office or the
location  where books and records  pertaining  to the  Receivable  are kept to a
location  outside of San Antonio,  Texas;  (c) change its legal name; (d) change
its state of incorporation;  (e) use any trade name not listed on the Perfection
Certificate;  (f) merge or consolidate with any other corporation or entity; (g)
dissolve  or cease its  operations  as they are now  conducted;  or (g)  without
Factor's written consent,  take or omit taking any actions that would render any
of Seller's  representations and warranties  materially incorrect or incomplete,
or take any  action  that  would  cause or  induce  any  Account  Debtor  on any
Receivable  to fail to pay the  Receivable  in a timely  manner-  other  than to
terminate service on an account seriously in arrears.  Seller will notify Factor
of any termination of service for any account seriously in arrears.

         13. Survival of Agreement,  Representations,  Warranties and Covenants.
All  warranties,  representations  and covenants made by Seller herein or in any
other  instrument  delivered by Seller or on Seller's  behalf in connection with
this Agreement  shall be considered to have been relied upon by Factor and shall
survive the purchase of the Receivables  regardless of any investigation made by
Factor or on Factor's behalf and shall continue in full force and effect so long
as any amount due or to become due  hereunder is  outstanding  and unpaid and so
long as  this  Agreement  has  not  terminated.  Specifically,  all  warranties,
representations  and covenants made by Seller in this Agreement  shall be deemed
reaffirmed by Seller upon execution of each supplemental Schedule A hereto.

         14. Reserve Payment  Worksheet and Financial  Statements.  Factor shall
prepare  and  provide to Seller on a weekly  basis  Reserve  Payment  Worksheets
(herein so called) showing  aggregate  outstanding  Receivables as of the end of
the applicable period,  total collections during the period,  debits and credits
to the  Reserve  Account,  present  balance  of the  Reserve  Account  discounts
charged,  and an  identification  and aging of  receivables  exceeding  30 days.
Seller shall provide to Factor as soon as practicable monthly balance sheets and
statements of income.

         15.  Interest  on  Unpaid   Charges;   Attorneys'  Fees  and  Costs  of
Enforcement.  All payment  obligations of Seller to Factor  provided  herein not
discharged when due shall bear interest,  if demanded by Factor,  at the rate of
18% per  annum,  payable  on the first day of each month if demand is not sooner
made. If Seller defaults hereunder or if a Dispute arises,  Seller shall pay all
costs of enforcement  incurred by Factor against Seller or the Account Debtor as
appropriate, including but not limited to attorney's fees incurred.



                                      -7-
<PAGE>

         16.  Disputes;  No Assumption of Liability by Factor;  Indemnification.
Seller shall immediately notify Factor of the assertion by any Account Debtor of
any Dispute.  Seller has heretofore  represented to Factor that no Receivable is
subject to a Dispute.  Therefore,  Seller shall settle, at its own expense,  all
Disputes,  subject to Factor's approval, but Factor shall have the right, in its
discretion, to settle any Dispute directly with the Account Debtor involved upon
such  terms as  Factor  may  deem  advisable  and at  Seller's  expense.  Seller
specifically  acknowledges  and agrees that Factor is not assuming any liability
or  obligation  of any kind to any Account  Debtor or in any way relating to the
Receivables. Seller hereby represents and warrants to Factor that no Receivable,
or any invoice, credit application, bill, billing memorandum, correspondence, or
any other documents  relating to a Receivable  contracts for or charges anything
of value that constitutes  interest in excess of the maximum  non-usurious  rate
allowed to be charged such Account  Debtor  pursuant to applicable  law.  Seller
acknowledges  that  Factor,  as the owner of a  Receivable,  may be subject to a
claim of usury by an Account Debtor in the event an invoice, credit application,
bill,  billing  memorandum,  correspondence  or other document  provides for the
payment of interest or any other  charge or fee which may deemed to be interest,
which is in excess of the maximum  non-usurious  rate allowed by applicable law.
In the event an  Account  Debtor  raises a claim of usury in  connection  with a
Receivable,  such  Receivable  shall be deemed to be  subject  to a Dispute  and
subject to the charge-back  provisions of this Agreement.  Seller shall promptly
indemnify and hold harmless  Factor from and against any and all claims,  causes
of action,  counterclaims and other liabilities and costs of any kind (including
attorneys' fees incurred by Factor in connection therewith) that may be asserted
against Factor by any Account Debtor or otherwise arising in connection with the
Receivables,  except as may be based on the acts or omissions of Factor.  Seller
shall  notify  Factor  within  two  business  days of it  becoming  aware of the
assertion  of an  Avoidance  Claim,  and shall  indemnify  Factor  from any loss
arising out of the assertion of any Avoidance Claim.

         17. Books and Records.  Seller  agrees to permit  Factor  access to all
books and records of the Seller during normal  business hours that relate to the
Collateral.

         18. Taxes. All taxes and  governmental  charges imposed with respect to
the sale of Receivables  shall be charged to Seller,  and Seller shall be liable
for all sales taxes and other taxes due in connection with any sale or rendering
of services resulting in a Receivable.

                                      -8-
<PAGE>


         19.  Termination.  Seller and Factor recognize that future purchases of
Receivables  are to be made only with  mutual  consent  of  Seller  and  Factor,
through  joint  execution  by Seller and Factor of a  supplemental  Schedule  A.
Accordingly,  this Agreement  shall continue in full force and effect unless and
until each of the following occur: (i) written notice of the termination of this
Agreement  as it relates to future  Receivables  by any party  hereto,  (ii) the
payment in full of all obligations of Seller to Factor pursuant hereto and (iii)
the collection of all outstanding  Receivables sold by Seller to Factor that, in
the sole  discretion of Factor,  can be collected.  Either party may immediately
terminate  this  Agreement as to future  transactions,  without cause within its
sole  discretion,  and nothing  contained in this Agreement shall  constitute an
agreement or commitment  to purchase any accounts  until such accounts have been
approved by Factor and a supplemental  Schedule  describing such Receivables has
been executed by Factor and Seller.  In the event Seller shall have breached any
provision of this  Agreement or any other  agreement  with Factor,  or if either
party shall have given notice to the other of the  termination of this Agreement
as to future Receivables,  the Reserve Account and any other monies, balances or
credits  otherwise  due by Factor to the Seller may be  retained  and applied by
Factor from time to time to reduce such obligations.  The balance in the Reserve
Account  shall not be  released  to Seller  unless all of  Seller's  obligations
hereunder have been paid in full. Seller acknowledges that it has the obligation
hereunder  to sell to  Factor  only  Receivables  that are free and clear of any
Dispute. As provided in Section 2(a) hereof,  Factor has the right to charge the
Reserve Account for any Receivables that are returned and charged-back to Seller
as a result of a  Dispute.  Accordingly,  in the event  any  Receivable  remains
uncollected  by Factor at the date of notice of termination of this Agreement as
to future Receivables, the Reserve Account shall not be released to Seller until
such time as Factor has determined,  in its sole  discretion,  that there are no
uncollected  Receivables subject to a Dispute. At the discretion of Factor, upon
written  notice of the  termination  of this  Agreement  as it relates to future
Receivables by any party hereto, Factor may return and charge back to Seller any
and all outstanding  Receivables in the manner  described in Section 2 above. In
addition and  notwithstanding  any provision of this  Agreement to the contrary,
Factor shall not be obligated  to release the Reserve  Account  unless and until
Seller  has  executed  and  delivered  to Factor a general  release  in the form
attached hereto as Exhibit "A". Furthermore,  upon termination of this Agreement
as to future  Receivables,  the  security  interest  granted to Factor by Seller
pursuant  to the  Security  Agreement  shall be  released  by  Factor  only upon
determination  by  Factor,  in its  reasonable  discretion,  that no  additional
obligations of Seller are owed to Factor hereunder and no uncollected Receivable
is subject to a Dispute. In recognition of Factor's right to have its attorneys'
fees and other expenses  incurred in connection  with this Agreement  secured by
the Collateral,  notwithstanding  payment in full of all Secured  Liabilities by
Seller, Factor shall not be required to record any terminations or satisfactions
of any of Factor's liens on the Collateral  unless and until Seller has executed
and  delivered  to Factor a general  release in the form of Exhibit  "A" hereto.
Seller understands that this provision  constitutes a waiver of its rights under
ss.9-513 of the UCC.  Termination of this Agreement  shall not affect the rights
and obligations of the parties accruing with respect to prior transactions.

         20.  Waiver.  Any  failure  by Factor  to  exercise  any of its  rights
hereunder,  shall  not be  deemed  to be a waiver by Factor of such or any other
rights,  nor in any manner  impair the  subsequent  exercise  of the same or any
other  right,  and any waiver by Factor of any default  shall not  constitute  a
waiver of any subsequent default.

         21.  Choice of Law.  The  parties  hereto  agree  that the  transaction
described  herein is  expected  to be a  Qualified  transaction,  as  defined in
Section 35.51 of the Texas  Business and Commerce Code (although no assurance is
given that Factor will  purchase any  specific  amount of  Receivables  pursuant
hereto),  and that to the maximum extent permitted by applicable law, all issues
relating to the transaction described herein shall be construed according to the
laws of the State of Texas.



                                      -9-
<PAGE>

         22. Entire  Agreement.  This Agreement  represents the entire Agreement
between  the  parties,  and may not be  amended  or  modified  except by written
instrument executed by Factor and Seller. This Agreement supersedes and replaces
any prior  agreement  among the parties,  oral or written.  No  representations,
whether oral or written, are being relied upon which are not expressly set forth
in this Agreement. The parties recognize that any oral representations and prior
written  representations are "merged" into this Agreement and no reliance can be
placed thereon.

         23.  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties hereto and their respective  administrators,
legal  representatives,  successors and assigns.  Factor may, at its discretion,
sell or assign its rights and  interests  hereunder  in any  manner,  by sale of
participation interest or otherwise.

         24.  Severability.  If any provision of this Agreement  shall,  for any
reason,  be held to violate any  applicable  law, then the remaining  portion of
this Agreement shall remain in full force and effect.

         25. Headings,  Construction.  The headings  contained in this Agreement
are for reference purposes only and shall not modify or affect the terms of this
Agreement in any manner.

         26.  Saturday,  Sunday or Legal  Holiday.  If any day  provided in this
Agreement  for the  performance  of any  obligation  should  fall on a Saturday,
Sunday or Legal Holiday,  the compliance  with such obligation or delivery shall
be deemed acceptable on the next business day following such day.

         27. Receipt of Payment.  Any payment  received by Factor on a Saturday,
Sunday or Legal  Holiday,  or any payment  that is received by Factor after 3:00
p.m., shall be deemed received on the next day that is not a Saturday, Sunday or
Legal Holiday.

         28.  Notices.  Any  notice,  demand or request  permitted,  required or
desired to be given under this Agreement shall be in writing and shall be deemed
effectively  given when  actually  hand  delivered or when sent by United States
certified or registered mail, return receipt requested, postage prepaid, or sent
by private,  receipted  carrier  guaranteeing  same-day  or  next-day  delivery,
addressed as follows:

         If to Factor:     CSI BUSINESS FINANCE, INC.
                           109 North Post Oak Lane, Suite 422
                           Houston, Texas 77024
                           Attention: Timothy J. Connolly



                                      -10-
<PAGE>

         If to Seller:     ATSI Communications, Inc
                           8600 Wurzbach, suite 700W
                           San Antonio, TX 78240
                           Attention: Art Smith

         29.  Determination  of  Purchase  Price.  The  Purchase  Price  of  the
Receivables  has been  determined  pursuant to  negotiations  between Factor and
Seller and represents the fair market value thereof, after due consideration has
been given to the nature of the Receivable, the probability of prompt collection
thereof, the credit worthiness of the Account Debtor, the payment history of the
Account  Debtor  and  other  economical  factors  relative  to the  Receivables.
Further,  in arriving at the  Purchase  Price,  consideration  has been given to
services  rendered and services that will be rendered in the future by Factor in
connection  with  credit  investigations  of  Account  Debtor,  supervising  the
ledgering  of  accounts  purchased,   supervising  the  collection  of  accounts
purchased,  and the  assumption  of certain  credit  risks.  The parties  hereto
acknowledge  that the  purchase  of the  Receivables  by Factor  constitutes  an
outright conveyance by the Seller to Factor.

         30. Provision Regarding Usury. Nothing contained herein, nor any course
of  dealing in the  future,  shall be  construed  to be  anything  other than an
outright purchase and sale of such Receivables. All right, title and interest of
the Seller has been conveyed to Factor and such  transaction is not subject to a
security  interest in the  Receivables  and the Purchase Price paid to Seller by
Factor  constitutes  consideration  for the  acquisition of the  Receivables and
under no circumstances shall be construed as a loan and no consideration  herein
set forth is for the use,  forbearance or detention of money.  Nothing contained
herein shall be construed as to require the payment of interest; however, should
a court of competent jurisdiction rule that any consideration paid hereunder are
in fact or in law to be  treated  as  interest,  in no  event  shall  Seller  be
obligated  to pay  that  interest  at a rate in  excess  of the  maximum  amount
permitted by law, and all  agreements,  conditions,  or  stipulations  contained
herein,  if any,  which may in any event or  contingency  whatsoever  operate to
bind, obligate, or compel Seller to pay a rate of interest exceeding the maximum
rate of interest  permitted by law shall be without  binding  force or effect at
law or in equity to the extent only of the excess of interest  over such maximum
rate of interest  permitted by law. Also in such event,  Factor may "spread" all
charges  characterized as interest over the entire term of all transactions with
Seller  and will  refund to Seller  the  excess  of any  payments  made over the
highest  lawful  rate.  It is the  intention  of the parties  hereto that in the
construction and interpretation of this Agreement,  the foregoing sentence shall
be given precedence over any other agreement,  condition,  or stipulation herein
contained which is in conflict with same.

         31.  Power  of  Attorney.  For so long as this  Agreement  has not been
terminated,    Factor   is   hereby    irrevocably    authorized   as   Seller's
Attorney-in-Fact,  with full authority in the place of Seller and in the name of
Seller or otherwise,  in Factor's discretion,  to take any action and to execute
any  instrument  which Factor may deem  necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

            (a) To  endorse  in the  name of  Seller,  and to take  all  actions
      necessary to collect for deposit to Factor's account,  all checks,  drafts
      and other forms of trade  acceptances,  negotiable  instruments  and other
      forms of payment (hereinafter  collectively referred to as the "Payments")
      which are  tendered in payment of  Receivables  or in payment of insurance
      claims relating to the Receivables,  or which are received by Factor.  The
      authorization  includes,  without  limitation,  the  power to open,  cash,
      endorse, deposit and otherwise collect all such Payments in the event they
      are not made payable to Factor;



                                      -11-
<PAGE>

            (b) To contact Account Debtors at any time in order to verify and/or
      collect Receivables;

            (c) To contact  the  Internal  Revenue  Service  and other State and
      local taxing authorities in order to ascertain Seller's tax liability;

            (d) To obtain and adjust insurance required to be paid to Factor;

            (e) To ask, demand, collect, sue for, recover, compound, receive and
      give acquittance and receipts for moneys due and to become due under or in
      respect of any of the Receivables;

            (f) To file, at Seller's  expense,  any claims or take any action or
      institute any proceedings which Factor may deem necessary or desirable for
      the collection of any of the Receivables or any of the collateral securing
      payment of the  Receivables  or  otherwise to enforce the rights of Factor
      with respect to the Receivables.

This Power of  Attorney is  irrevocable  and coupled  with an  interest.  Seller
hereby  acknowledges  that  Seller  is not  entitled  to any  notice,  demand or
presentation  with respect to payment of any  Receivable  and agrees that Factor
may extend or renew  from time to time the  payment  of any  Receivable  without
notice to or consent by Seller.

         32. Joint and Several Obligations.  If more than one party is executing
this Agreement as Seller,  each party agrees that its obligations  hereunder are
joint and several,  and that its obligations shall be not released,  diminished,
impaired  or  affected  by the  occurrence  of any one or more of the  following
events, all of which may occur without notice to or consent of any other Seller:

            (a)  Any  release,  partial  release,  subordination  or loss of any
      security,  guaranty or collateral and any time existing in connection with
      the obligations contained herein;

            (b) The death, insolvency,  bankruptcy,  disability or incapacity of
      any  Seller,  guarantor,  or any other  party now or  hereafter  obligated
      hereon;

            (c)  Any  renewal,  extension,  and/or  rearrangement  of all or any
      portion of the obligations contained herein;

            (d) Any neglect,  delay,  omission,  failure or refusal of Factor to
      take or  prosecute  any  action  for  the  collection  of the  obligations
      provided herein;



                                      -12-
<PAGE>

            (e) The  unenforceability  for any  reason of all or any part of the
      obligations contained herein against any Seller, guarantor or other party;

            (f) The  finding  of any  payment  by any  Seller  to  constitute  a
      preference under bankruptcy or similar debtor relief law;

            (g) Any  release or  partial  release of  liability  of any  Seller,
      guarantor or other party; and

            (h) Any other  action  that  might  impair  rights in the  nature of
      contribution or subrogation that any Seller might otherwise have.

         33. Waiver of Consumer Rights.IN CONNECTION WITH THIS AGREEMENT, SELLER
WAIVES SELLER'S  RIGHTS,  IF ANY, UNDER THE DECEPTIVE  TRADE  PRACTICES-CONSUMER
PROTECTION  ACT,  TEXAS  BUSINESS AND COMMERCE CODE SECTION 17.41 ET SEQ., A LAW
THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER CONSULTATION WITH AN
ATTORNEY OF SELLER'S OWN SELECTION, SELLER VOLUNTARILY CONSENTS TO THIS WAIVER.

         34. Submission to Jurisdiction. (a) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT AND THE OTHER DOCUMENTS TO WHICH SELLER AND FACTOR ARE
A PARTY MAY BE  BROUGHT  IN THE  COURTS  OF THE STATE OF TEXAS OR OF THE  UNITED
STATES  LOCATED IN HARRIS  COUNTY,  TEXAS AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT,  SELLER  HEREBY  IRREVOCABLY  ACCEPTS  FOR  ITSELF  AND IN RESPECT OF
SELLER'S  PROPERTY,  UNCONDITIONALLY,  THE  JURISDICTION OF THE AFORESAID COURTS
WITH  RESPECT  TO ANY SUCH  ACTION OR  PROCEEDING.  SELLER  FURTHER  IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS  OUT OF ANY OF THE  AFOREMENTIONED  COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES  THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID,  TO SELLER PURSUANT TO SECTION 28, SUCH SERVICE
TO BECOME  EFFECTIVE  THIRTY  (30) DAYS  AFTER  SUCH  MAILING.  NOTHING  IN THIS
AGREEMENT  SHALL AFFECT THE RIGHT OF FACTOR TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL  PROCEEDINGS OR OTHERWISE  PROCEED AGAINST
SELLER IN ANY OTHER JURISDICTION.

      (b) SELLER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH SELLER MAY NOW OR
HEREAFTER  HAVE TO THE  LAYING  OF  VENUE  OF ANY OF THE  AFORESAID  ACTIONS  OR
PROCEEDINGS  ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT  BROUGHT IN THE
COURTS  REFERRED  TO IN  CLAUSE  (a)  OF  THIS  SECTION  34 AND  HEREBY  FURTHER
IRREVOCABLY  WAIVES  AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH  ACTION OR  PROCEEDING  BROUGHT  IN ANY SUCH  COURT HAS BEEN  BROUGHT IN AN
INCONVENIENT FORUM.



                                      -13-
<PAGE>

         35. Waiver of Jury Trial. SELLER HEREBY WAIVES, TO THE EXTENT PERMITTED
BY  APPLICABLE  LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND  ANY  RIGHTS  UNDER  THIS  AGREEMENT  OR UNDER ANY  AMENDMENT,
INSTRUMENT,  DOCUMENT  OR  AGREEMENT  DELIVERED  OR WHICH  MAY IN THE  FUTURE BE
DELIVERED IN CONNECTION WITH THIS AGREEMENT, AND AGREES, TO THE EXTENT PERMITTED
BY APPLICABLE  LAW,  THAT ANY SUCH ACTION OR PROCEEDING  SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

         36. No Obligation to Purchase Further Receivables.  Seller specifically
acknowledges and agrees that,  anything herein to the contrary  notwithstanding,
Factor has the right to approve or reject any or all future accounts  receivable
proposed for sale under this Agreement IN ITS SOLE DISCRETION,  and no course of
conduct or prior course of dealing shall establish any commitment, obligation or
agreement to purchase future accounts receivable.

         37. Use of  Facsimiles.  The parties  acknowledge  and agree that it is
anticipated  that  execution  of this  Agreement,  as well as schedules or other
documents  executed  in  connection  herewith,  may be  evidenced  by  facsimile
signatures,  and such documents  containing facsimile signatures shall be of the
same force and effect as if original signatures had been obtained.


                  (Remainder of Page Intentionally Left Blank)




                                      -14-
<PAGE>



         EXECUTED as of this 20th day of February, 2006.

                                     FACTOR:

                                     CSI BUSINESS FINANCE, INC.



                                     By: /s/Timothy J. Connolly
                                         --------------------------------
                                         Timothy J. Connolly, CEO

                                     SELLER:

                                     ATSI COMMUNICATIONS, INC.

                                     By: /s/ Arthur L. Smith
                                         --------------------------------
                                         Arthur L. Smith, President & CEO



<PAGE>




                                   SCHEDULE A
                         TO PURCHASE AND SALE AGREEMENT
                         DATED FEBRUARY 20, 2006 BETWEEN
                         CSI BUSINESS FINANCE, INC. AND
                            ATSI COMMUNICATIONS, INC.



























                                                                        Initials


                                                                        --------
                                                                        Seller

                                                                        --------
                                                                        Factor


<PAGE>




                                   EXHIBIT "A"
                                 GENERAL RELEASE

         FOR GOOD AND VALUABLE CONSIDERATION,  the receipt and adequacy of which
are  hereby  acknowledged,  the  undersigned  and  each  of  them  (collectively
"Releasor")  hereby  forever  releases,  discharges  and  acquits  CSI  BUSINESS
FINANCE,  INC.  ("Releasee"),  its parent,  officers,  directors,  shareholders,
agents  and  employees,  of and from any and all  claims  of every  type,  kind,
nature,  description or character, and irrespective of how, why, or by reason of
what facts, whether heretofore  existing,  now existing or hereafter arising, or
which  could,  might,  or may be claimed  to exist,  of  whatever  kind or name,
whether known or unknown, suspected or unsuspected,  liquidated or unliquidated,
each as though fully set forth  herein at length,  to the extent that they arise
out of or are in way  connected to or are related to that  certain  Purchase and
Sale   Agreement   between   Releasee  and  Releasor  dated  February  20,  2006
(collectively, the "Claims").

         Releasor  agrees  that the matters  released  herein are not limited to
matters, which are known or disclosed.

         Releasor  acknowledges  that factual matters now unknown to it may have
given  or may  hereafter  give  rise to  Claims  which  are  presently  unknown,
unanticipated  and unsuspected,  and it acknowledges  that this Release has been
negotiated and agreed upon in light of that realization and that it nevertheless
hereby  intends to  release,  discharge  and acquit the  Releasee  from any such
unknown Claims.

         Acceptance  of this  Release  shall not be deemed  or  construed  as an
admission of liability by any party released.

         Releasor  acknowledges  that either (a) it has had advice of counsel of
its own choosing in negotiations for and the preparation of this release, or (b)
it has knowingly determined that such advise is not needed.

DATED:  February 20, 2006

Individual Releasor:
                                        -----------------------------------
                                        [Name of individual], individually

Entity Releasor:
                                        ------------------------------------
                                        [Name of entity]

                                        By:    /s/ Arthur L. Smith
                                               -----------------------------
                                        Name:  Arthur L. Smith
                                               -----------------------------
                                        Title: President & CEO
                                               -----------------------------