C&B
        DRAFT 11/26/07

    

     

    EXHIBIT
      10.2

     

    PROMISSORY
      NOTE

     

    
      
        	
                $450,000.00
                  

              	
                December
                  10, 2007

              


      

       

    

    FOR
      VALUE
      RECEIVED, ATSI Communications, Inc., a Nevada corporation (“ATSI”), hereby
      promises to pay to The Shaar Fund, Ltd., or to the legal holder of this
      Promissory Note at the time of payments (“Payee”), the principal amount of FOUR
      HUNDRED AND FIFTY THOUSAND DOLLARS ($450,000.00), plus accrued and unpaid
      interest, in the amounts and on the dates specified in the attached Schedule
      A.
      Interest will accrue on the unpaid principal amount hereof for each day from
      (and including) the date of this Promissory Note to (but excluding) the date
      on
      which the principal amount hereof has been paid in full, at the rate of 7.5%
      per
      annum, compounded monthly, based on a 360-day year. 

     

    This
      Promissory Note is subject to the following terms and conditions: 

     

    
      	I.	
              Payment
                and Prepayment 

            


    

     

    A. All
      payments are due on the dates and in the amounts specified in the attached
      Schedule A.

     

    B. All
      payments of principal of and interest on this Promissory Note shall be made
      to
      Payee by wire transfer of immediately available funds to the following
      account:

     

    JPMorgan
      Chase

    395
      No.
      Service Road, Melville, NY, 11747 

    Attn:
      John Spurrell

    ABA
      #
      021-000-021

    Meltzer,
      Lippe & Goldstein, LLP Attorney Trust Account

    Account
      #
      777-738228

    Reference:
      Shaar Fund: ATSI

    


    If
      the
      date set for payment is a Saturday, Sunday or legal holiday, then such payment
      shall be made on the preceding business day. Upon final payment of all principal
      and interest on this Promissory Note it shall be surrendered for
      cancellation.

     

    C. The
      full
      amount of any payment required hereunder and not paid when due shall bear
      interest, payable on demand, for each day from (and including) the date payment
      thereof was due to (but excluding) the date of actual payment at a rate per
      annum, equal to the greater of (i) 11.0% and (ii) the sum of (x) 3.0% and (y)
      the Base Rate for each such day, compounded monthly based on a 360-day year.
      “Base Rate” shall mean the rate of interest publicly announced by Citibank, N.A.
      in New York City from time to time as its Base Rate. Notwithstanding the
      foregoing, nothing in this Promissory Note shall require ATSI to pay interest
      at
      a rate exceeding the maximum rate permitted by applicable law. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	II.	
              Discount
                for Prepayment

            


    

     

    A. Within
      eighteen (18) months of the execution of this Promissory Note, and provided
      that
      there has been no Event of Default pursuant to Section III(A)(1), ATSI may
      discharge its obligations hereunder in full by paying seventy-seven and one-half
      percent (77.5%) of the then-outstanding principal balance hereunder, plus
      interest due thereon to the date of payment. 

     

    
      	III.	
              Events
                of Default 

            


    

     

    A. The
      following events shall be deemed “Events of Default”:

     

    
      	 	
              1.

            	
              Failure
                of ATSI to pay any amount arising under this Promissory Note when
                due, or
                within three (3) business days after it is
                due;

            


    

     

    
      	 	
              2.

            	
              ATSI
                or any of its subsidiaries

            


    

     

    a) files,
      or
      consents by answer or otherwise to the filing against it of, a petition for
      relief or reorganization or arrangement or any other petition in bankruptcy,
      seeking to adjudicate it as bankrupt or insolvent, for liquidation or to take
      advantage of any bankruptcy, insolvency, reorganization, moratorium, or other
      similar law of any jurisdiction,

     

    b) makes
      a
      general assignment for the benefit of its creditors, or

     

    c) consents
      to the appointment of a custodian, receiver, trustee or other officer with
      similar powers with respect to it or with respect to all or substantially all
      of
      its property; or

     

    
      	 	
              3.

            	
              A
                court or governmental authority of competent jurisdiction enters
                into an
                order appointing, without consent by ATSI, a custodian, receiver,
                trustee
                or other officer with similar powers with respect to it or with respect
                to
                any of its subsidiaries or any substantial part of its property,
                or
                constituting an order for relief or approving a petition for relief
                or
                reorganization or any other petition in bankruptcy or insolvency
                law in
                any jurisdiction, or ordering the dissolution, winding-up or liquidation
                of ATSI or any of its subsidiaries, or petition for any action (including
                a petition in bankruptcy or seeking to adjudicate ATSI as bankrupt
                or
                insolvent) shall be filed against ATSI and such petition shall not
                be
                dismissed within 90 days.

            


    

     

    B. Upon
      the
      occurrence of any Event of Default pursuant to Section III(A)(1), Payee may
      declare, by notice of default given to ATSI, the entire principal amount of
      this
      Promissory Note to be forthwith due and payable, whereupon the entire principal
      amount of this Promissory Note outstanding and any accrued and unpaid interest
      hereunder shall become due and payable without presentment, demand, protest,
      notice of dishonor and all other demands and notices of any kind, all of which
      are hereby expressly waived. Solely with respect to the first Event of Default
      pursuant to Section III(A)(1), the notice of default given to ATSI for such
      Event of Default shall be automatically annulled if such Event of Default is
      cured within twenty (20) days of the notice.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    C. Upon
      the
      occurrence of any Event of Default pursuant to Section III(A)(2) or Section
      III(A)(3) of this Promissory Note, the entire principal amount of this
      Promissory Note shall automatically become due and payable (without any notice
      of default required to be given to ATSI) without presentment, demand, notice
      or
      dishonor and all other demands and notices of any kind, all of which are hereby
      expressly waived. 

     

    D. If
      an
      Event of Default shall occur hereunder, ATSI shall pay all reasonable costs
      and
      expenses, including reasonable attorneys’ fees and disbursements, incurred by
      Payee in connection with such Event of Default and in connection with any
      collection, bankruptcy, insolvency, restructuring and other enforcement
      proceedings resulting therefrom. 

     

    E. No
      delay
      or failure by Payee in the exercise of any right or remedy shall constitute
      a
      waiver thereof, and no single or partial exercise by Payee of any right or
      remedy shall preclude other or future exercise thereof or the exercise of any
      other right or remedy.

     

    
      	IV.	
              Obligations
                Absolute

            


    

     

    A. ATSI’s
      payment obligations under this Promissory Note shall be unconditional and
      irrevocable and shall be paid strictly in accordance with the terms of this
      Promissory Note under all circumstances, including, without limitation, the
      following circumstances:

     

    
      	 	
              1.

            	
              The
                existence of any claim, set-off, or other right or defense that ATSI
                or
                any other person may have against Payee whether
                in connection with this Promissory Note or any related or unrelated
                transaction; or

            


    

     

    
      	 	
              2.

            	
              Any
                other circumstance or happening whatsoever, whether or not similar
                to any
                of the foregoing.

            


    

     

    B. ATSI
      hereby
      unconditionally waives any rights that it may now have or hereafter acquire
      against Payee that arise from the existence, payment, performance, or
      enforcement of ATSI’s obligations under or in respect of this Promissory Note,
      unless and until all of the amounts payable under this Promissory Note shall
      have been previously paid in full in immediately available funds.

     

    
      	V.	
              Miscellaneous

            


    

     

    A. All
      notices and other communications hereunder shall be in writing and will be
      deemed to have been duly given if delivered or mailed to the following
      addresses:

     

    If
      to
      ATSI:

    


    ATSI
      Communications, Inc.

    3201
      Cherry Ridge Drive, Suite C-300

    San
      Antonio, Texas 78230

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    and

    


    Peter
      Kilpatrick

    Langley
      & Banack,
      Inc.

    745
      East
      Mulberry, Suite 900

    San
      Antonio, Texas 78212

    


    If
      to
      Payee:

    


    The
      Shaar
      Fund, Ltd.

    c/o
      Jonathan M. Sperling

    Covington
      & Burling LLP

    620
      Eighth Avenue

    New
      York,
      NY 10018

    


    A
      party
      may change its address by written notice to the other party given pursuant
      to
      this Section V.

     

    B. This
      Promissory Note shall inure to the benefit of and be binding upon ATSI and
      Payee
      and their respective successors and assigns, except that ATSI may not assign
      or
      otherwise transfer any of its rights or obligations hereunder without the prior
      written consent of Payee.

     

    C. The
      headings contained in this Promissory Note are for reference purposes only
      and
      shall not affect in any way the meaning or interpretation of the provisions
      hereof.

     

    D. This
      Promissory Note may not be amended, modified, superseded, cancelled, renewed,
      or
      extended orally, but only by an agreement in writing signed by Payee and
      ATSI.

     

    E. If
      any
      provision in this Promissory Note shall be held invalid, illegal, or
      unenforceable, the validity, legality, or enforceability of any other provision
      shall not be in any way affected or impaired in any other
      jurisdiction.

     

    F. This
      Promissory Note shall be construed in accordance with and governed by the laws
      of the State of New York without giving effect to the conflict of laws
      principles thereof.

     

    G. ATSI,
      to
      the extent that it may lawfully do so, hereby consents to service of process,
      and to be sued, in the State of New York and consents to the exclusive
      jurisdiction of the courts of the State of New York and the United States
      District Court for the Southern District of New York, as well as to the
      jurisdiction of all courts to which an appeal may be taken from such courts,
      for
      the purpose of any suit, action or other proceeding arising out of any of its
      obligations hereunder or with respect to the transactions contemplated hereby,
      and expressly waives any and all objections it may have as to venue in any
      such
      courts or that any such suit, action or other proceeding was brought in an
      inconvenient court. ATSI further agrees that a summons and complaint commencing
      an action or proceeding in any of such courts shall be properly served and
      shall
      confer personal jurisdiction if served personally or by certified mail to it
      in
      accordance with Section V(A) hereof or as otherwise provided under the laws
      of
      the State of New York. ATSI and Payee agree that final judgment in such suit,
      action, or proceeding shall be conclusive and may be enforced in any other
      jurisdiction by suit on the judgment or in any other manner provided by
      law.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    H. In
      the
      event any action is brought or claim is asserted to enforce the terms of this
      Promissory Note, the prevailing party shall be entitled to its reasonable
      attorneys’ fees, expenses and costs in addition to all other relief to which
      that party may be entitled. 

     

    I. ATSI
      IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER
      PROCEEDING INSTITUTED BY OR AGAINST IT IN RESPECT OF ITS OBLIGATIONS HEREUNDER
      OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, ATSI has caused this instrument to be executed as of the day
      and year first above written.

     

    
      	
              ATSI
                COMMUNICATIONS, INC.

            
	 	 
	
              By:
                

            	
              /s/
                Arthur L. Smith

            
	 	 
	 	
              Arthur
                L. Smith

            
	 	
              President
                and CEO

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Schedule
      A

     

    By
      executing this Promissory Note, ATSI Communications, Inc. promises to make
      payments, in the amount of Four Hundred Fifty Thousand Dollars ($450,000) plus
      seven-and-one-half percent (7.5 %) interest per annum, for a total amount of
      Five Hundred Thirty Four Thousand Seven Hundred Sixteen Dollars and Fifty Five
      Cents ($534,716.55), in accordance with the following schedule:

     

    
      
        	
                Date
                  Due:

              	 	
                Principal:

              	 	
                Interest

              	 	
                Total Payment

                Due:

              	 
	 	 	 	 	 	 	 	 
	
                January
                  31, 2008

              	 	
                $

              	
                16,666.64

              	 	
                $

              	
                8,680.21

              	 	
                $

              	
                25,346.85

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                April
                  30, 2008

              	 	
                $

              	
                16,666.64

              	 	
                $

              	
                8,175.87

              	 	
                $

              	
                24,842.51

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                July
                  31, 2008

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                8,037.24

              	 	
                $

              	
                34,078.91

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                October
                  31, 2008

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                7,534.91

              	 	
                $

              	
                33,576.58

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                January
                  31, 2009

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                7,032.59

              	 	
                $

              	
                33,074.26

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                April
                  30, 2009

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                6,315.97

              	 	
                $

              	
                32,357.64

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                July
                  31, 2009

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                6,027.93

              	 	
                $

              	
                32,069.60

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                October
                  31, 2009

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                5,525.60

              	 	
                $

              	
                31,567.27

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                January
                  31, 2010

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                5,023.27

              	 	
                $

              	
                31,064.94

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                April
                  30, 2010

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                4,372.59

              	 	
                $

              	
                30,414.26

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                July
                  31, 2010

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                4,018.62

              	 	
                $

              	
                30,060.29

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                October
                  31, 2010

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                3,516.29

              	 	
                $

              	
                29,557.96

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                January
                  31, 2011

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                3,013.96

              	 	
                $

              	
                29,055.63

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                April
                  30, 2011

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                2,429.22

              	 	
                $

              	
                28,470.89

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                July
                  31, 2011

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                2,009.31

              	 	
                $

              	
                28,050.98

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                October
                  31, 2011

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                1,506.98

              	 	
                $

              	
                27,548.65

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                January
                  31, 2012

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                1,004.65

              	 	
                $

              	
                27,046.32

              	 
	 	 	 	 	 	 	 	 	 	 	 
	
                April
                  30, 2012

              	 	
                $

              	
                26,041.67

              	 	
                $

              	
                491.34

              	 	
                $

              	
                26,533.01

              	 


      

    

     

    
      
        
        

      

      
        7