Exhibit
      4.20 

     

    CONVERTIBLE
      PROMISSORY NOTE

     

    
      	
              $150,000

            	
              July
                13, 2007

            
	 	
              San
                Antonio, Texas 

            


    

     

    For
      value
      received, NetSapiens, Inc., a Delaware corporation (the “Company”),
      promises to pay to ATSI Communications, Inc (the “Holder”),
      at
      the location specified below for notice, the principal sum of $150,000 (One
      Hundred and Fifty Thousand Dollars), or the amount thereof that has been funded
      as set forth herein, whichever is less, together with interest from the date
      of
      this Note on the unpaid principal amount of this Note from time to time
      outstanding at a rate equal to 8.00% per annum, compounded annually, based
      on a
      year of 365 or 366 days, as the case may be. This Note is subject to the
      following terms and conditions.

     

    1. Funding.This
      Note
      shall be funded by the Holder in five (5) installments as follows, subject
      however to the Holder’s determination before each installment that the Company
      is creditworthy, which determination shall be the sole discretion of the
      Holder:

     

    
      	
            	a.	
              The
                first installment shall be in the amount of FIFTY THOUSAND and NO/100
                UNITED STATES DOLLARS ($50,000.00) and shall be funded on July 13,
                2007;

            


    

     

    
      	
            	b.	
              The
                second installment shall be in the amount of TWENTY-FIVE THOUSAND
                and
                NO/100 UNITED STATES DOLLARS ($25,000.00) and shall be funded August
                13,
                2007; 

            


    

     

    
      	
            	c.	
              The
                third installment shall be in the amount of TWENTY-FIVE THOUSAND
                and
                NO/100 UNITED STATES DOLLARS ($25,000.00) and shall be funded September
                13, 2007; 

            


    

     

    
      	
            	d.	
              The
                fourth installment shall be in the amount of TWENTY-FIVE THOUSAND
                and
                NO/100 UNITED STATES DOLLARS ($25,000.00) and shall be funded October
                13,
                2007; 

            


    

     

    
      	
            	e.	
              The
                fifth and final installment shall be in the amount of TWENTY-FIVE
                THOUSAND
                and NO/100 UNITED STATES DOLLARS ($25,000.00) and shall be funded
                November
                13, 2007; 

            


    

     

    provided,
      however, that
      the
      Holder shall have no obligation to fund any installment and shall have no
      liability for Holder’s decision to withhold funding of any installment for any
      reason.

     

    2. Maturity.
      Unless
      converted as provided in Section 4, this Note will automatically mature and
      be
      due and payable on the earlier of (a) June 26, 2008, or (b) the date of a Change
      in Control, as herein after defined (the “Maturity
      Date”).
      Notwithstanding the foregoing, the entire unpaid principal sum of this Note,
      together with accrued and unpaid interest thereon, shall become immediately
      due
      and payable upon the insolvency of the Company, the execution by the Company
      of
      a general assignment for the benefit of creditors, the filing by or against
      the
      Company of a petition in bankruptcy or any petition for relief under the federal
      bankruptcy act or the continuation of such petition without dismissal for a
      period of 90 days or more, or the appointment of a receiver or trustee to take
      possession of the property or assets of the Company. The term “Change of
      Control” shall mean any transaction or series of transactions involving (i) the
      sale, conveyance or other disposition of all or substantially all of the
      Company’s assets, property or business; (ii) the merger of the Company with or
      into or consolidation of the Company with any other corporation, limited
      liability company or other entity; or (iii) in which any person acquires or
      would become the beneficial owner of more than 20% of the voting power of the
      Company (assuming the conversion of all convertible securities and the exercise
      of all options, warrants and other rights to acquire voting securities),
      provided that the term “Change of Control” shall not include: (A) a merger of
      the Company in which the Company is the surviving entity and the stockholders
      of
      the Company immediately prior to the transaction own at least 51% of the voting
      power of the Company after the transaction, assuming the conversion of all
      convertible securities and the exercise of all options, warrants or other rights
      to purchase voting securities, or (B) a merger of the Company in which the
      Company is not the surviving entity and in which all of the outstanding voting
      securities of the surviving corporation, assuming the conversion of all
      convertible securities and the exercise of all options, warrants and other
      rights to purchase voting securities, are owned in by the stockholders of the
      Company immediately prior to the transaction in the same percentages as the
      voting securities of the Company were owned by such stockholders prior to the
      transaction, or (C) the acquisition of voting securities by any person that
      owns
      20% or more of the voting power of the Company on the date of this Note.


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Waivers
      by the Company.
      Except
      to the extent, if any, that notice of default is expressly required herein,
      the
      Company, and any and all co-makers, endorsers, guarantors and sureties severally
      waive notice (including, but not limited to, notice of intent to accelerate
      and
      notice of acceleration, notice of protest and notice of dishonor), demand,
      presentment for payment, protest, diligence in collecting and the filing of
      suit
      for the purpose of fixing liability and consent that the time of payment hereof
      may be extended and re-extended from time to time without notice to any of
      them.

     

    4. Grant
      of License and Conversion. 

     

    (a) License.
      As
      additional consideration for the Holder to fund this Note, the Company will
      grant to the Holder a License for the use of certain Products as set forth
      in
      the attached License Agreement (the “License”). 

     

    (b)
       Conversion.
      The
      entire principal amount from time to time outstanding of, and accrued interest
      on, this Note may be converted at the option of the Holder into a perpetual
      paid
      up license in accordance with the terms of the License. 

     

    (c) Mechanics
      and Effect of Conversion.
      The
      Holder of this Note may elect to convert all, but not less than all, of the
      principal amount and accrued interest into the License as set forth in Section
      4(a) by providing the Company with written notice of conversion (a “Conversion
      Notice”) at any time prior to or after the Maturity Date. Upon conversion of
      this Note, the Company will be forever released from all of its obligations
      and
      liabilities with regard to the repayment of the principal of or accrued interest
      on this Note. From and after such conversion, the Holder shall have the
      obligation to fund any and all remaining installments under this note on the
      later of (i) the date that such installment was originally scheduled for
      funding; or (ii) the date of such conversion; provided, however, that in either
      event, the Holder shall not have any obligation to fund the remaining
      installments under this Note notwithstanding the conversion hereof if the
      Company is in default of any provision of this Note or the License at the time
      of conversion.

     

    5. Payment;
      Prepayment.
      All
      payments shall be made in lawful money of the United States of America at such
      place as the Holder hereof may from time to time designate in writing to the
      Company. Payment shall be credited first to the accrued interest then due and
      payable and the remainder applied to principal. Prepayment of this Note may
      be
      made at any time without penalty.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6. Transfer;
      Successors and Assigns.
      The
      terms and conditions of this Note shall inure to the benefit of and be binding
      upon the respective successors and assigns of the parties. Subject to the
      preceding sentence, this Note may be transferred only upon surrender of the
      original Note for registration of transfer, duly endorsed, or accompanied by
      a
      duly executed written instrument of transfer in form satisfactory to the
      Company. Thereupon, a new note for the same principal amount and interest will
      be issued to, and registered in the name of, the transferee. Interest and
      principal are payable only to the registered holder of this Note.

     

    7. Governing
      Law; Jurisdiction and Venue. This
      Note and all acts and transactions pursuant hereto and the rights and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of Texas, without giving effect to
      principles of conflicts of law. Any action to collect this Note or relating
      to
      the enforcement or interpretation of this Note shall be brought in the state
      courts, or if they can obtain subject matter jurisdiction, the Federal Courts
      sitting in Bexar County Texas, to whose jurisdiction and which venue the Company
      agrees. To the maximum extent permitted by law, the Company waives any claim
      that such jurisdiction or venue is improper or inconvenient and agrees to submit
      to the personal jurisdiction of such courts. 

     

    8. Amendments
      and Waivers.
      Any term
      of this Note may be amended only with the written consent of the Company and
      the
      Holder. Any
      amendment or waiver effected in accordance with this Section 7 shall be
      binding upon the Company, each Holder and each transferee of any
      Note.

     

    9. Action
      to Collect on Note.
      If
      action is instituted to collect on this Note, the losong party promises to
      pay
      all costs and expenses, including reasonable attorney’s fees, incurred in
      connection with such action.

     

    10. Usury.
      It
      is
      expressly provided and stipulated that notwithstanding any provision of this
      Note or any other instrument evidencing or securing the indebtedness evidenced
      hereby, in no event shall the aggregate of all interest paid by the Company
      to
      the Holder hereunder ever exceed the Maximum Nonusurious Rate of interest (as
      hereinafter defined) which may lawfully be charged the Company under the laws
      of
      the State of Texas or the United States Federal Government, as applicable,
      on
      the principal balance of this Note remaining unpaid. If under any circumstances
      the aggregate amounts paid on the indebtedness evidenced by this Note prior
      to
      and incident to the final payment hereof include amounts which by law are deemed
      interest and which would exceed the Maximum Nonusurious Rate of interest which
      could lawfully have been charged or collected on this Note, the Company
      stipulates that (a) any non-principal payment shall be characterized as an
      expense, fee, or premium rather than as interest, and any excess shall be
      credited hereon by the holder hereof (or, if this Note shall have been paid
      in
      full, refunded to the Company); (b) determination of the rate of interest for
      determining whether the indebtedness evidenced hereby is usurious shall be
      made
      by amortizing, prorating, allocating, and spreading, in equal parts during
      the
      full stated term of such indebtedness, all interest at any time contracted
      for,
      charged, or received from the Company in connection with such indebtedness,
      and
      any excess shall be canceled, credited or refunded as set forth in (a) herein.
      The term "Maximum Nonusurious Rate of interest" which may be charged as herein
      contemplated shall be the indicated rate ceiling from time to time in effect
      pursuant to the applicable provisions of the Texas Finance Code, as amended,
      provided that Payee may also rely on any alternative Maximum Nonusurious Rate
      of
      interest provided by other applicable laws if such other rates are higher than
      that allowed by said Article, as amended.

     

    11. Paragraph
      Headings.
      Paragraph headings appearing in this Note are for convenient reference only
      and
      shall not be used to interpret or limit the meaning of any provision of this
      Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12. Severability.
      If any
      provision of this Note is held to be illegal, invalid or unenforceable under
      present or future laws, the legality, validity and enforceability of the
      remaining provisions of this Note shall not be affected thereby, and this Note
      shall be liberally construed so as to carry out the intent of the parties to
      it.


     

    13. Notices.
      Any
      notice, request or other communication required or permitted to be given
      hereunder shall be given in writing by delivering it against receipt for it,
      by
      depositing it with an overnight delivery service or by depositing it in a
      receptacle maintained by the United States Postal Service, postage prepaid,
      registered or certified mail, return receipt requested, addressed to the
      respective parties as follows (and if so given, shall be deemed given when
      mailed):

     

    
      	
              If
                to the Company: 

            	
              NetSapiens,
                Inc.

            
	 	
              Attn:
                Anand J. Buch, CEO

            
	 	 
	 	 
	 	 
	
              If
                to the Holder: 

            	
              ATSI
                Communications, Inc.

            
	 	
              Attn:
                Art Smith, CEO

            
	 	
              3201
                Cherry Ridge Road

            
	 	
              Suite
                300C

            
	 	
              San
                Antonio, TX 78230

            


    

     

    The
      Company's address for notice may be changed at any time and from time to time,
      but only after thirty (30) days' advance written notice to the Holder and shall
      be the most recent such address furnished in writing by the Company to the
      Holder. The Holder's address for notice may be changed at any time and from
      time
      to time, but only after ten (10) days' advance written notice to the Company
      and
      shall be the most recent such address furnished in writing by Holder to the
      Company. Actual notice, however and from whomever given or received, shall
      always be effective when received.

     

    14. Entire
      Agreement.
      This
      Note and the License embody the entire agreement and understanding between
      the
      Company and the Holder with respect to their subject matter and supersede all
      prior conflicting or inconsistent agreements, consents and understandings
      relating to such subject matter. The Company acknowledges and agrees that there
      is no oral agreement between the Company and the Holder which has not been
      incorporated in this Note..

     

    
      	 	
              NETSAPIENS,
                INC.

            
	 	 
	 	
              By:
                /S/ Anand J. Buch

            
	 	
              Name:
                Anand J. Buch

            
	 	
              Title:
                Chief Executive Officer