Docstoc

1) Confidential Settlement Agreement - ATSI COMMUNICATIONS INC/DE - 12-15-2004

Document Sample
1)   Confidential Settlement Agreement - ATSI COMMUNICATIONS INC/DE - 12-15-2004 Powered By Docstoc
					Exhibit 10.1 ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ DOCUMENTS INCLUDED: 1) Confidential Settlement Agreement and Mutual Release, dated October 1, 2004 2) Promissory note payable, dated October 1, 2004 3) Lock-out Agreement, dated October 1, 2004 ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE ATSI Communications, Inc., a Nevada corporation ("ATSI"), formerly a Delaware corporation, and Alfonso Torres Roqueni, an individual residing in Mexico City, Mexico, ("Torres") (collectively, the "Parties"), hereby enter into this Confidential Settlement Agreement and Mutual Release (the "Settlement Agreement"). RECITALS WHEREAS, the Parties are AGREED that certain relationships between and among the Parties should be ended and any and all claims or liabilities between and among them be held for naught; and WHEREAS, the Parties entered into an agreement on June 7, 2000 regarding the sale by Torres of the 3% stock and the 48% stock as defined in such Agreement; and WHEREAS, the Parties amended such Agreement on July 19, 2001; and WHEREAS, ATSI executed a Promissory Note for $357,000 on November 1, 2001; and WHEREAS, ATSI has defaulted in its obligations of the Amended Agreement and Promissory Note; and WHEREAS, all Parties wish to reach a full and final settlement of all matters and all causes and potential causes of action arising from any of their relationships with Page 1

each other, including any and all disputes or rights or potential rights between or among the Parties arising from any transactions between or among them prior to the execution date of this Agreement, and now desire to set forth their agreement in writing. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and further good and valuable consideration, the Parties hereby agree and covenant as follows: 1. PAYMENT. As consideration for all amounts owed up to and including September 30, 2004 of $1,359,500 including any and all accrued interest, ATSI shall deliver to Torres a total of 687,600 shares of ATSI's common stock post-split (the "Payment"), for $859,500 and a promissory note for $500,000 payable on October 1, 2007. The Shares will be considered issued at $1.25 per share; however, if on the Measurement Date the price per share is below $1.15, ATSI shall issue an additional 59,791 shares of ATSI's common stock; if, however, the share price is at or above $1.15 on the Measurement Date, there shall be no additional consideration paid and the amount of shares issued (687,600) shall be considered as final consideration. Measurement Date shall be defined as the arithmetic mean of the average closing prices of the Common Shares for the ten (10) trading days immediately preceding April 1, 2005. This Payment is subject to the approval of the Board of Directors whose approval shall be sought as soon as practicable. 2. RELEASE BY TORRES. In consideration of the receipt of the Payment, Torres, with the intention of binding itself, and its officers, directors, shareholder, employees, representatives, attorneys-in-fact, predecessors, successors and assigns, (the "Torres Releasing Parties") expressly releases, acquits, and discharges ATSI and its respective officers, directors, shareholders, representatives, attorneys, successors, and assigns (the "ATSI Released Parties") from all claims, demands, causes of action and potential Page 2

claims or causes of action, of whatever nature that the Torres Releasing Parties may have or claim to have against the ATSI Released Parties arising from or connected with, directly or indirectly, any and all claims the Torres Releasing Parties may have or claim to have against the ATSI Released Parties accruing before the execution date of this Release. Notwithstanding the foregoing paragraph, the ATSI Released Parties are not released from the obligations or indemnities set forth in this Settlement Agreement. 3. RELEASE BY ATSI. In further consideration of the foregoing, ATSI, with the intention of binding itself and its respective officers, directors, shareholders, employees, representatives, attorneys-in-fact, predecessors, successors, assigns, and subsidiaries (the "ATSI Releasing Parties") expressly release, acquit, and discharge Torres and its officers, directors, shareholders, representatives, attorneys, successors, and assigns, (the "Torres Released Parties") from all claims, demands, and causes of action or potential claims and causes of action of whatever nature that the ATSI Releasing Parties may have or claim to have against the Torres Released Parties arising from or connected with, directly or indirectly, any relationship or transaction between or among the Parties, as well as any and all other or potential claims that the ATSI Releasing Parties may have or claim to have against the Torres Released Parties accruing before the execution date of this Settlement Agreement. Notwithstanding the foregoing paragraph, the Torres Released Parties are not released from the obligations of this Settlement Agreement. 4. NO ADMISSION OF LIABILITY. This settlement and the Payment made hereunder do not constitute an admission of liability by any Party hereto, and liability is expressly denied by all Parties. 5. CONFIDENTIALITY. The Parties agree that they will not disclose the terms of this Settlement Agreement, unless necessary to enforce the terms of this Settlement Agreement or after receipt of judicial process or lawful discovery procedures. In the Page 3

event that any Party is served with notice to disclose such information by subpoena or otherwise, that Party agrees promptly to notify the other Parties in writing of such notice. The Party or Parties so notified in writing shall thereafter undertake the cost and obligation to maintain the propriety and confidentiality of the terms of such information. 6. NON-DISPARAGEMENT. The Parties agree to use reasonable effort not to disparage or interfere with any other Party's agreements or prospective agreements with any third party. 7. ENTIRE AGREEMENT. This Settlement Agreement contains the entire understanding and agreement of the Parties hereto with respect to the subject matters herein, and may not be amended or modified in any respect other than in a writing which specifically refers to this Settlement Agreement and which is signed by all of the Parties hereto. 8. GOVERNING LAW. This Settlement Agreement was negotiated in, and shall be governed by and construed according to, the laws of the State of Texas. In the event that any provision herein is deemed not enforceable, the remainder of this Settlement Agreement will remain unaffected. Venue for any action relating to the provisions of this Agreement shall be in Bexar County, Texas. 9. NO ASSIGNMENT. By signing this Settlement Agreement, each of the Parties represents and warrants that it has not assigned or subrogated any of its claims or potential claims, in whole or in part, to any third party. 10. MODIFICATION AND ATTORNEY'S FEES. This Settlement Agreement shall not be suspended, amended, or modified in any manner except by an instrument in writing signed by all Parties to be bound. Should it become necessary to enforce this Settlement Agreement, or any portion of it, or to declare the effect of any provision of this Settlement Agreement, the prevailing Party shall be entitled to recover costs incurred including reasonable attorney's fees. Page 4

11. INFORMED CONSENT. The Parties acknowledge that they have had the opportunity to consult with their respective attorneys regarding the meaning and effect of this Settlement Agreement, and that none of the Parties has made any representations, written or oral, upon which another Party relies in executing this Settlement Agreement. 12. COUNTERPARTS. This Settlement Agreement may be executed in multiple counterparts. A set of counterpart copies which collectively contains the signature and acknowledgment of all Parties shall constitute an original. EXECUTED by an authorized representative of ATSI Communications, Inc., a Nevada corporation, on the date written below. ATSI COMMUNICATIONS, INC.
By: /S/ Arthur L. Smith ------------------Its: PRESIDENT AND CHIEF EXECUTIVE OFFICER ------------------------------------Date: October 1, 2004 ---------------

EXECUTED by Alfonso Torres Roqueni on the date written below. ALFONSO TORRES ROQUE-I
By: Its: Date: /s/ Alfonso Torres Roqueni -------------------------President --------October 1, 2004 ---------------

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Page 5

PROMISSORY NOTE PRINCIPAL AMOUNT: $500,000.00 DATED: OCTOBER 1, 2004 This Promissory Note ("Note") is made and entered into as of this 1st day of October, 2004 by and between ATSI Communications, Inc., a Nevada corporation ("ATSI") with its principal place of business located at 8600 Wurzbach, Suite 700W, San Antonio, Texas, 78240 and Dr. Alfonso Torres Roque i, ("Lender") of Blvd. Miguel Avila Camacho No. 184, Piso 16, Col. Lomas de San Isidro, Mexico City, Mexico. For value received, ATSI promises to pay FIVE HUNDRED THOUSAND U.S. Dollars ($500,000) to the order of Lender at Blvd. Miguel Avila Camacho No. 184, Piso 16, Col. Lomas de San Isidro, Mexico City, Mexico, or such other location as Lender may designate in writing, on October 1, 2007. Interest shall accrue at 6% (six percent) per annum. Lender shall not impose any penalty for ATSI's pre-payment of this Note. Upon and at any time after any Default (as defined below) all amounts due under this Note, at the option of Lender and without demand, notice or legal process of any kind, may be declared and immediately shall become due and payable. "Default" shall mean the occurrence or existence of any one or more of the following events or conditions: (i) ATSI fails to pay when due any amount due under this Note and fails to cure such late payment within five (5) days following written receipt of notice of the late payment; or (ii) ATSI makes an assignment for the benefit of creditors, or any proceeding is filed or commenced by or against ATSI under any bankruptcy, reorganization, arrangement of debt insolvency, readjustment of debt or receivership law or statute, and any such proceeding remains undismissed or unstayed for a period of 30 days, or any of the actions sought in any such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, ATSI or for any substantial part of its property) shall occur, or ATSI shall take any action to authorize any of the actions set forth above in this subsection. ATSI hereby waives presentment, demand of payment, protest or notice with respect to the indebtedness evidenced by this Note including, without limitation, notice that the Note or any portion thereof, is due. If Lender prevails in any action to collect on or enforce this Note or claims arising from the execution of this Note, then Lender's reasonable attorneys' fees and costs will also be payable under this Note. Neither party may assign this Note without the prior written consent of the other, which shall not be unreasonably withheld. This Note may be modified only by a written document that refers specifically to this Note and is signed by both parties. A party's failure or delay in enforcing any provision of this Note will not be deemed a waiver of that party's rights with respect to that provision or any other Page 6

provision of this Note. A party's waiver of any of its rights under this Note is not a waiver of any of its other rights with respect to a prior, contemporaneous or future occurrence, whether similar in nature or not. This Note shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, AND LENDER AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS FOR ALL PURPOSES. SOLE AND EXCLUSIVE VENUE FOR ANY DISPUTE OR DISAGREEMENT ARISING UNDER OR RELATING TO THIS NOTE SHALL BE IN A COURT SITTING IN BEXAR COUNTY, SAN ANTONIO, TEXAS. MADE this 1st day of October, 2004.
ATSI COMMUNICATIONS, INC. ALFONSO TORRES ROQUE I/GEORGE KAUSS

By: /s/ Arthur L. Smith -------------------------------ARTHUR L. SMITH PRESIDENT & CEO

By: /s/Alfonso Torres Roqueni ---------------------------ALFONSO TORRES ROQUENI

By: /s/ George Kauss ---------------------------GEORGE KAUSS

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Page 7

LOCK-OUT AGREEMENT
ATSI Communications, Inc. 8600 Wurzbach, Suite 700W San Antonio, TX 78240 Re: ATSI Communications, Inc. (the "Company") October 1, 2004

Ladies and Gentlemen: The undersigned stock holder or warrant holder hereby agrees that for a period of twelve (12) months (such period being a "Restricted Period") the undersigned may only offer to sell, contract to sell, or otherwise sell, dispose of, pledge or grant any rights with respect to (collectively, a "Disposition") up to 5,000 shares of Common Stock per calendar month or a total of 60,000 total shares, any options or warrants to purchase any shares of Common Stock or any securities convertible into or exchangeable for shares of, or enter into any hedging or derivatives transaction related to the Common Stock of the Company (collectively, "Securities") resulting from the Confidential Settlement Agreement and Mutual Release dated October 1, 2004 or hereafter acquired directly by such person or with respect to which such person has or hereafter acquires the power of disposition. The foregoing restriction has been expressly agreed to preclude the undersigned during the Restricted Period from engaging in any hedging or other transaction that is designed to or reasonably expected to lead to or result in a Disposition of Securities during the Lock-out Period, even if such Securities would be disposed of by someone other than such holder. Such prohibited hedging or other transactions would include, without limitation, any short sale (whether or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any Securities or with respect to any security (other than a broad-based market basket or index) that included, relates to or derives any significant part of its value from Securities. The undersigned agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of shares of Common Stock or Securities held by the undersigned except in compliance with the foregoing restrictions. This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned. Dated October 1, 2004 Alfonso Torres Roqueni Printed Name of Holder
/S/ Alfonso Torres Roqueni ---------------------------Signature

George Kauss Printed Name of Person Signing
/s/ George Kauss ---------------Signature

Page 8

Exhibit 10.2 CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE ATSI Communications, Inc., a Nevada corporation ("ATSI"), formerly a Delaware corporation, and Infraestructura Espacial, S.A. de C.V., a Mexican corporation ("Infraestructura") (collectively, the "Parties"), hereby enter into this Confidential Settlement Agreement and Mutual Release (the "Settlement Agreement"). RECITALS WHEREAS, the Parties are AGREED that certain relationships between and among the Parties should be ended and any and all claims or liabilities between and among them be held for naught; and WHEREAS, ATSI executed on March 22, 2001 a Pledge Agreement with Infraestructura; and WHEREAS, ATSI executed a replacement Pledge Agreement on September 12, 2002; and WHEREAS, Infraestructura agreed to loan ATSI $250,000; and WHEREAS, ATSI failed to pay Infraestructura; and WHEREAS, Infraestructura therefore collected the security interest under such Agreement consisting of 357,104 shares of old ATSI (ATSI Delaware) treasury stock; and WHEREAS, all Parties wish to reach a full and final settlement of all matters and all causes and potential causes of action arising from any of their relationships with each other, including any and all disputes or rights or potential rights between or among the Parties arising from any transactions between or among them prior to the execution date of this Agreement, and now desire to set forth their agreement in writing. CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 1

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, and further good and valuable consideration, the Parties hereby agree and covenant as follows: 1. PAYMENT. As consideration for all amounts owed including any accrued interest, ATSI shall deliver to Infraestructura 30,000 shares of ATSI's common stock (Nevada) post-split (the "Payment"). This Payment is subject to the approval of the Board of Directors whose approval shall be sought as soon as practicable. 2. RELEASE BY INFRAESTRUCTURA. In consideration of the receipt of the Payment, Infraestructura, with the intention of binding itself, and its officers, directors, shareholder, employees, representatives, attorneys-infact, predecessors, successors and assigns, (the "Infraestructura Releasing Parties") expressly releases, acquits, and discharges ATSI and its respective officers, directors, shareholders, representatives, attorneys, successors, and assigns (the "ATSI Released Parties") from all claims, demands, causes of action and potential claims or causes of action, of whatever nature that the Infraestructura Releasing Parties may have or claim to have against the ATSI Released Parties arising from or connected with, directly or indirectly, any and all claims the Infraestructura Releasing Parties may have or claim to have against the ATSI Released Parties accruing before the execution date of this Release. Notwithstanding the foregoing paragraph, the ATSI Released Parties are not released from the obligations or indemnities set forth in this Settlement Agreement. 2. RELEASE BY ATSI. In further consideration of the foregoing, ATSI, with the intention of binding itself and its respective officers, directors, shareholders, employees, representatives, attorneys-in-fact, predecessors, successors, assigns, and subsidiaries (the "ATSI Releasing Parties") expressly release, acquit, and discharge Infraestructura and its officers, directors, shareholders, representatives, attorneys, CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 2

successors, and assigns, (the "Infraestructura Released Parties") from all claims, demands, and causes of action or potential claims and causes of action of whatever nature that the ATSI Releasing Parties may have or claim to have against the Infraestructura Released Parties arising from or connected with, directly or indirectly, any relationship or transaction between or among the Parties, as well as any and all other or potential claims that the ATSI Releasing Parties may have or claim to have against the Infraestructura Released Parties accruing before the execution date of this Settlement Agreement. Notwithstanding the foregoing paragraph, the Infraestructura Released Parties are not released from the obligations of this Settlement Agreement. 3. NO ADMISSION OF LIABILITY. This settlement and the Payment made hereunder do not constitute an admission of liability by any Party hereto, and liability is expressly denied by all Parties. 4. CONFIDENTIALITY. The Parties agree that they will not disclose the terms of this Settlement Agreement, unless necessary to enforce the terms of this Settlement Agreement or after receipt of judicial process or lawful discovery procedures. In the event that any Party is served with notice to disclose such information by subpoena or otherwise, that Party agrees promptly to notify the other Parties in writing of such notice. The Party or Parties so notified in writing shall thereafter undertake the cost and obligation to maintain the propriety and confidentiality of the terms of such information. 5. NON-DISPARAGEMENT. The Parties agree to use reasonable effort not to disparage or interfere with any other Party's agreements or prospective agreements with any third party. 6. ENTIRE AGREEMENT. This Settlement Agreement contains the entire understanding and agreement of the Parties hereto with respect to the subject matters herein, and may not be amended or modified in any respect other than in a writing which specifically refers to this Settlement Agreement and which is signed by all of the CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE Page 3

Parties hereto. 7. GOVERNING LAW. This Settlement Agreement was negotiated in, and shall be governed by and construed according to, the laws of the State of Texas. In the event that any provision herein is deemed not enforceable, the remainder of this Settlement Agreement will remain unaffected. Venue for any action relating to the provisions of this Agreement shall be in Bexar County, Texas. 8. NO ASSIGNMENT. By signing this Settlement Agreement, each of the Parties represents and warrants that it has not assigned or subrogated any of its claims or potential claims, in whole or in part, to any third party. 9. MODIFICATION AND ATTORNEY'S FEES. This Settlement Agreement shall not be suspended, amended, or modified in any manner except by an instrument in writing signed by all Parties to be bound. Should it become necessary to enforce this Settlement Agreement, or any portion of it, or to declare the effect of any provision of this Settlement Agreement, the prevailing Party shall be entitled to recover costs incurred including reasonable attorney's fees. 10. INFORMED CONSENT. The Parties acknowledge that they have had the opportunity to consult with their respective attorneys regarding the meaning and effect of this Settlement Agreement, and that none of the Parties has made any representations, written or oral, upon which another Party relies in executing this Settlement Agreement. 11. COUNTERPARTS. This Settlement Agreement may be executed in multiple counterparts. A set of counterpart copies which collectively contains the signature and acknowledgment of all Parties shall constitute an original. EXECUTED by an authorized representative of ATSI Communications, Inc., a Nevada corporation, on the date written below. CONFIDENTIAL MUTUAL RELEASE Page 4

ATSI COMMUNICATIONS, INC.
/s/ Arthur L. Smith ------------------Its: President and CEO ----------------Date: October 26, 2004 ----------------By:

EXECUTED by an authorized representative of Infraestructura Espacial, S.A. de C.V., a Mexican corporation, on the date written below. INFRAESTRUCTURA ESPACIAL, S.A. DE C.V.
/s/ Tomas Revesz ---------------Its: President and CEO ----------------Date: October 26, 2004 ----------------By:

CONFIDENTIAL MUTUAL RELEASE Page 5

Exhibit 31.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PERSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Arthur L. Smith, certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of ATSI Communications, Inc., a Nevada Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
By /s/ Arthur L. Smith Arthur L. Smith President and Chief Executive Officer December 15, 2004

Exhibit 31.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PERSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Antonio Estrada, certify that: 1. I have reviewed this Quarterly Report on Form 10-QSB of ATSI Communications, Inc., a Nevada Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
By /s/ Antonio Estrada Antonio Estrada Corporate Controller and Chief Financial Officer December 15, 2004

Exhibit 32.1 CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ATSI Communications, Inc. on Form 10-QSB for the period ending October 31, 2004, as filed with the Securities and Exchange Commission on the date hereof, I, Arthur L. Smith, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C, ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, 1) the Report complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) the information in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
By /s/ Arthur L. Smith Arthur L. Smith President and Chief Executive Officer December 15, 2004

Exhibit 32.2 CERTIFICATION OF CORPORATE CONTROLLER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of ATSI Communications, Inc. on Form 10-QSB for the period ending October 31, 2004, as filed with the Securities and Exchange Commission on the date hereof, I, Antonio Estrada, Corporate Controller and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C, ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 1) the Report complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) the information in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
By /s/ Antonio Estrada Antonio Estrada Corporate Controller and Principal Financial Officer December 15, 2004

EXHIBIT 99.1 JULIE PARSLEY [GRAPHIC OMITTED] COMMISSIONER PAUL HUDSON RECEIVED CHAIRMAN 04 OCT-4 PM 12:01 PUBLIC UTILITY COMMISSION BARRY T. SMITHERMAN FILING CLERK COMMISSIONER W. LANE LANFORD EXECUTIVE DIRECTOR PUBLIC UTILITY COMMISSION OF TEXAS TO: Alejandro Hinojosa, Jr. Hinotel 2759 West Business 83 Harlingen, TX. 78552 Telecommunications Division Legal and Enforcement Division RE: DOCKET NO. 30130 - APPLICATION OF HINOTEL FOR AN AMENDMENT TO ITS SERVICE PROVIDER CERTIFICATE OF OPERATING AUTHORITY NOTICE OF APPROVAL This Notice approves the application of Hinotel (the Applicant) filed on August 27, 2004, for an amendment to its service provider certificate of operating authority (SPCOA) No. 60359(1) to reflect a change in ownership/control as well as a name change to Telefamilia Communications, Inc. The docket was processed in accordance with applicable statutes and Commission rules. The Commission provided notice of the application to interested parties. More than 15 days have passed since the completion of notice. No protests, motions to intervene, or requests for hearing were filed. The Applicant and the Commission Staff (Staff) are the only parties to the proceeding. Staff recommended approval of the application. The application is approved.

1 Granted in Application of Hinotel, Inc. for a Service Provider Certificate of Operating Authority, Docket No 22330 (May 18, 2000); and amended in Application of Hinotel for an Amendment to its Service Provider Certificate of Operating Authority, Docket No. 23331 (Jan. 22, 2001). O PRINTED ON RECYCLED PAPER AN EQUAL OPPORTUNITY EMPLOYER 1701 N. CONGRESS AVENUE PO BOX 13326 AUSTIN, TX 78711 512/936-7000 FAX: 512/936-7003 WEB SITE: WWW.PUC.STATE.TX.US

DOCKET NO. 30130 NOTICE OF APPROVAL PAGE 2 OF 6 STATUTORY FINDINGS 1. Telefamilia Communications, Inc. is a Texas corporation formed on April 22, 2004. 2. Telefamilia Communications, Inc.'s parent company is ATSI Communications, Inc., a Nevada corporation formed on May 24, 2004. 3. Telefamilia Communications, Inc. has no affiliates that are public utilities or that are providing telecommunications services. 4. The Applicant does not currently have authority to provide local or long distance telecommunications services in any other state. However, a now bankrupt subsidiary of the owner of Telefamilia Communications, Inc., known as American Telesource International Inc., held authorization to provide long distance services in the following states: California, Colorado, Delaware, Florida, Kansas, Louisiana, Maryland, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas, Vermont, and West Virginia. 5. All operator services certifications as shown above were revoked with the bankruptcy of American Telesource International Inc. in May 2003. 6. American Telesource International, Inc. provided interexchange long distance service in Texas, and operator services in the states shown above.

DOCKET NO. 30130 NOTICE OF APPROVAL PAGE 3 OF 6 7. The Applicant requests to amend its SPCOA to reflect a change in ownership control and a name change to Telefamilia Communications, Inc. (proposed services). 8. The application complies with PURA (2) Sec. 54.154(b). 9. The Applicant is not precluded by PURA Sec.Sec. 54.201 or 54.152 from providing service under an SPCOA. 10. The Applicant is entitled to approval of this application, having demonstrated the financial and technical qualifications to provide the proposed services, and the ability to provide the necessary quality of service to its customers, as required by PURA Sec.Sec. 54.154(b) and 54.155(b). COMPLAINT HISTORY 11. The Office of the Texas Attorney General reported no complaints registered against the Applicant. 12. A check of the Commission's Customer Protection Division complaint database revealed no complaints registered against the Applicant or Telefamilia Communications. 13. A check of the Commission's Enforcement & Investigations database revealed no outstanding notices of violation against the Applicant or Telefamilia Communications. 14. The Applicant committed in its responses to the Commission's Service Quality Questionnaire to continue to meet the quality of service standards.

DOCKET NO. 30130 NOTICE OF APPROVAL PAGE 4 OF 6 ORDERING PARAGRAPHS 1. The application of Hinotel to amend its facilities-based, data, and resale telecommunications service provider certificate of operating authority (SPCOA) is approved.(3) Hinotel's SPCOA No. 60359 is amended to reflect a change in ownership/control and a name change to Telefamilia Communications, Inc. 2. The Applicant shall be bound by requirements of P.U.C. SUBST. R. 26.111. Service under this certificate shall be provided exclusively in the name under which the certificate was granted by the Commission. 3. The Applicant shall file any future changes in address, contact representative, and/or telephone numbers in an annual report with the Commission by June 30th of each year using the form Annual Information Reporting Requirements for a Service Provider Certificate of Operating Authority and/or a Certificate of Operating Authority, Docket No. 27357. If the SPCOA holder has any change during the year in the information requested in Section One of the annual report form, then the SPCOA holder shall file an updated form correcting the information in Section One within 30 days of the change. 4. The Applicant shall provide a copy of its application and/or the Commission's Notice of Approval, in accordance with the individual entity's requirements, to all affected Commission on State Emergency Communications (9-1-1) entities prior to providing service to those entities.

2 The Public Utility Regulatory Act, TEX. UTIL. CODE ANN. Sec.Sec. 11.001 64.158 (Vernon 2000 & Supp. 2005) (PURA). 3 Administrative approval of this uncontested application has no precedential value in a future proceeding.

DOCKET NO. 30130 NOTICE OF APPROVAL PAGE 5 OF 6 5. The Applicant's provision of local telephone service to end-users, whether by its own facilities, flat-rate resale, or usage sensitive loop, must also include "9-1-1" emergency telephone service at a level required by the applicable regional plan followed by local telephone service providers under Chapters 771 and 772 of the Texas Health and Safety Code, TEX. HEALTH & SAFETY CODE ANN. Sec.Sec. 771.001 et seq. (Vernon 2003) (the Code) or other applicable law, and any applicable rules and regulations implementing those chapters. The Applicant shall diligently work with the Commission on State Emergency Communications, local "9-1-1" entities, and any other agencies or entities authorized by Chapters 771 and 772 of the Code to ensure that all "9-1-1" emergency services, whether provided through the certificate holder's own facilities, flat-rate resale, or usage sensitive loop, are provided in a manner consistent with the applicable regional plan followed by local telephone service providers under Chapters 771 or 772 of the Code or other applicable law and any applicable rules and regulations implementing those chapters. The Applicant shall diligently work with the "9-1-1" entities to pursue, in good faith, the mutually agreed goal that the local "9-1-1" entities and emergency service providers experience no increase in their current level of rates and, to the extent technically feasible, no degradation in services as a result of the certification granted herein and the involvement of the certificate holder in the provision of "9-1-1" emergency service. 6. The Applicant shall notify all affected 9-1-1 administrative entities at least 30 days prior to activating or using a new NXX in a rate center or upon the commencement of providing local telephone service in any rate center in compliance with P.U.C. SUBST. R. 26.433(d)(3). 7. The Applicant shall execute a separate service agreement with each 9-1-1 entity and remit the required 9-1-1 emergency service fee to the 9-1-1 entity pursuant to such agreement in compliance with P.U.C. SUBST. R. 26.435(e)(4).

DOCKET NO. 30130 NOTICE OF APPROVAL PAGE 6 OF 6 8. The Applicant has committed to and is bound by the quality of service requirements set forth in the Quality of Service Questionnaire. The underlying incumbent local exchange companies (ILECs) continue to be bound by the quality of service requirements contained in P.U.C. SUBST. R. 26.51. Approval of the SPCOA application does not expand the scope of the underlying ILEC's obligation to its own customers. 9. All other motions, requests for entry of specific findings of fact and conclusions of law, and any other requests for general or specific relief, if not expressly granted herein, are hereby denied. SIGNED AT AUSTIN, TEXAS THE 4TH DAY OF OCTOBER 2004. PUBLIC UTILITY COMMISSION OF TEXAS
/S/ IRENE MONTELONGO ---------------------------------------------IRENE MONTELONGO ADMINISTRATIVE LAW JUDGE POLICY DEVELOPMENT DIVISION