Document:

EXHIBIT 4.1

                            ATSI COMMUNICATIONS, INC.
                          2004 STOCK COMPENSATION PLAN

SECTION  1.  PURPOSE  OF  THE  PLAN.  The purpose of the 2004 Stock Compensation
Plan  ("Plan") is to maintain the ability of ATSI Communications, Inc., a Nevada
corporation  (the  "Company")  and its subsidiaries to attract and retain highly
qualified  and experienced directors, employees and consultants and to give such
directors,  employees  and  consultants  a continued proprietary interest in the
success  of  the Company and its subsidiaries.  In addition the Plan is intended
to encourage ownership of common stock, $.001 par value ("Common Stock"), of the
Company  by  the  directors,  employees  and  consultants of the Company and its
Affiliates  (as  defined  below)  and  to  provide  increased incentive for such
persons  to  render  services and to exert maximum effort for the success of the
Company's  business.  The  Plan  provides eligible employees and consultants the
opportunity to participate in the enhancement of stockholder value by the grants
of  warrants,  options,  restricted common, unrestricted common and other awards
under  this  Plan  and  to  have their bonuses and/or consulting fees payable in
warrants,  restricted  common,  unrestricted  common  and  other  awards, or any
combination  thereof.  In  addition,  the  Company  expects  that  the Plan will
further  strengthen  the  identification  of  the  directors,  employees  and
consultants  with  the stockholders.  Certain options and warrants to be granted
under  this  Plan  are  intended  to qualify as Incentive Stock Options ("ISOs")
pursuant  to  Section  422  of  the  Internal  Revenue  Code of 1986, as amended
("Code"),  while  other  options  and  warrants  granted under this Plan will be
nonqualified  options  or  warrants  which  are  not intended to qualify as ISOs
("Nonqualified  Options"),  either  or  both  as  provided  in  the  agreements
evidencing  the  options  or  warrants  described  in  Section  5.  Employees,
consultants  and  directors who participate or become eligible to participate in
this  Plan  from  time  to  time  are  referred  to  collectively  herein  as
"Participants".  As  used  in this Plan, the term "Affiliates" means any "parent
corporation"  of  the  Company  and  any "subsidiary corporation" of the Company
within  the  meaning  of  Code  Sections  424(e)  and  (f),  respectively.

SECTION  2.  ADMINISTRATION  OF  THE  PLAN.

(a)  Committee.  The Plan shall be administered by the Board of Directors of the
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Company  (the  "Board")  or a committee thereof designated by the Board with the
specific  authority  to  administer  the Plan.  When acting in such capacity the
Board  is  herein referred to as the "Committee".  If the Company is governed by
Rule  16b-3 promulgated by the Securities and Exchange Commission ("Commission")
pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act"), no
director  shall  serve  as a member of the Committee or shall participate in the
administration  of the Plan unless he or she is a "Non-Employee Director" within
the  meaning  of  such  Rule  16b-3.

(b)  Committee  Action.  The Committee shall hold its meetings at such times and
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places  as  it  may  determine.  A  majority  of  its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a
majority  of  its members.  Any decision or determination reduced to writing and
signed  by  a  majority  of the members shall be fully as effective as if it had
been  made  by  a  majority  vote  of  its  members at a meeting duly called and

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held.  The Committee may designate the Secretary of the Company or other Company
employees  to  assist  the  Committee in the administration of the Plan, and may
grant  authority  to such persons to execute award agreements or other documents
on  behalf  of the Committee and the Company.  Any duly constituted committee of
the  Board  satisfying  the qualifications of this Section 2 may be appointed as
the  Committee.

(c)  Committee Expenses.  All expenses and liabilities incurred by the Committee
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in  the administration of the Plan shall he borne by the Company.  The Committee
may  employ  attorneys,  consultants,  accountants  or  other  persons.

SECTION  3.  STOCK  RESERVED FOR THE PLAN.  Subject to adjustment as provided in
Section  8  hereof, the aggregate number of shares that may be optioned, subject
to conversion or issued under the Plan is 7,500,000 shares of Common Stock.  The
shares  subject  to  the Plan shall consist of authorized but unissued shares of
Common  Stock and such number of shares shall be and is hereby reserved for sale
for  such purpose.  Any of such shares which may remain unsold and which are not
subject  to  issuance  upon  exercise  of outstanding options or warrants at the
termination  of the Plan shall cease to be reserved for the purpose of the Plan,
but  until termination of the Plan or the termination of the last of the options
or  warrants granted under the Plan, whichever last occurs, the Company shall at
all  times reserve a sufficient number of shares to meet the requirements of the
Plan.  Should any option or warrant expire or be cancelled prior to its exercise
in  full,  the shares theretofore subject to such option or warrant may again be
made  subject  to  an  option  or  warrant  under  the  Plan.

SECTION  4.  ELIGIBILITY.  The  Participants shall include directors, employees,
including  officers,  of  the  Company  and  its divisions and subsidiaries, and
consultants  and  attorneys  who  provide  bona  fide  services  to the Company.
Participants  are  eligible  to be granted warrants, options, restricted common,
unrestricted  common  and other awards under this Plan and to have their bonuses
and/or  consulting  fees  payable  in  warrants, restricted common, unrestricted
common  and  other  awards.  A  Participant  who  has  been granted an option or
warrant  hereunder  may  be  granted an additional option or warrant, options or
warrants,  if  the  Committee  shall  so  determine.

SECTION 5. GRANT OF OPTIONS OR WARRANTS.

(a)  Committee  Discretion.  The  Committee  shall  have  sole  and  absolute
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discretionary authority (i) to determine, authorize, and designate those persons
pursuant  to  this Plan who are to receive warrants, options, restricted common,
or unrestricted common under the Plan, (ii) to determine the number of shares of
Common  Stock  to  be  covered by such grant or such options or warrants and the
terms  thereof,  (iii)  to  determine whether the grant of Common Stock shall be
restricted  or unrestricted or a combination of restricted and unrestricted, and
(iv)  to  determine  whether  any  option  shall be an ISO, a nonqualified stock
option  or  a  combination of ISO and nonqualified stock option.  Subject to the
express provisions of the Plan, the Committee shall have discretionary authority
to  prescribe,  amend and rescind rules and regulations relating to the Plan, to
interpret  the  Plan,  to prescribe and amend the terms of the option or warrant
agreements  (which  need  not be identical) and to make all other determinations
deemed  necessary  or  advisable  for  the  administration  of  the  Plan.

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(b)  Stockholder Approval.  All ISOs granted under this Plan are subject to, and
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may not be exercised before, the approval of this Plan by the stockholders prior
to  the first anniversary date of the Board meeting held to approve the Plan, by
the  affirmative  vote of the holders of a majority of the outstanding shares of
the  Company  present, or represented by proxy, and entitled to vote thereat, or
by  written consent in accordance with the laws of the State of Nevada, provided
that if such approval by the stockholders of the Company is not forthcoming, all
options  or  warrants  and stock awards previously granted under this Plan other
than  ISOs  shall  be  valid  in  all  respects.

(c)  Limitation  on  Incentive  Stock  Options and Warrants.  The aggregate fair
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market value (determined in accordance with Section 5(d)(ii) of this Plan at the
time the option or warrant is granted) of the Common Stock with respect to which
ISOs  may  be  exercisable  for  the  first  time  by any Participant during any
calendar  year  under all such plans of the Company and its Affiliates shall not
exceed  $1,000,000.

(d)  Terms  and Conditions.  Each option or warrant granted under the Plan shall
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be  evidenced  by an agreement, in a form approved by the Committee, which shall
be subject to the following express terms and conditions and to such other terms
and  conditions  as  the  Committee  may  deem  appropriate:

     (i)  Option  or  Warrant  Period.  The  Committee shall promptly notify the
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     Participant  of  the  option or warrant grant and a written agreement shall
     promptly  be executed and delivered by and on behalf of the Company and the
     Participant,  provided  that  the option or warrant grant shall expire if a
     written  agreement  is  not  signed  by  said  Participant (or his agent or
     attorney)  and  returned to the Company within 60 days from date of receipt
     by  the  Participant of such agreement. The date of grant shall be the date
     the option or warrant is actually granted by the Committee, even though the
     written  agreement  may  be  executed  and delivered by the Company and the
     Participant after that date. Each option or warrant agreement shall specify
     the  period for which the option or warrant thereunder is granted (which in
     no  event  shall exceed ten years from the date of grant) and shall provide
     that  the  option or warrant shall expire at the end of such period. If the
     original  term of an option or warrant is less than ten years from the date
     of  grant,  the  option  or warrant may be amended prior to its expiration,
     with  the approval of the Committee and the Participant, to extend the term
     so  that  the  term  as amended is not more than ten years from the date of
     grant.  However, in the case of an ISO granted to an individual who, at the
     time  of  grant,  owns  stock  possessing more than 10 percent of the total
     combined  voting  power  of  all  classes  of  stock  of the Company or its
     Affiliate  (a "Ten Percent Stockholder"), such period shall not exceed five
     years  from  the  date  of  grant.

     (ii)  Option  or Warrant Price.  The purchase price of each share of Common
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     Stock  subject to each option or warrant granted pursuant to the Plan shall
     be determined by the Committee at the time the option or warrant is granted
     and,  in  the  case of ISOs, shall not be less than 100% of the fair market
     value  of  a  share  of  Common  Stock on the date the option or warrant is
     granted, as determined by the Committee. In the case of an ISO granted to a
     Ten Percent Stockholder, the option or warrant price shall not be less than

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     110%  of  the  fair market value of a share of Common Stock on the date the
     option  or  warrant  is granted. The purchase price of each share of Common
     Stock  subject to a Nonqualified Option or Warrant under this Plan shall be
     determined  by  the  Committee prior to granting the option or warrant. The
     Committee  shall  set  the  purchase  price  for  each  share  subject to a
     Nonqualified  Option  or  Warrant  at  either the fair market value of each
     share  on the date the option or warrant is granted, or at such other price
     as  the  Committee  in  its  sole discretion shall determine. At the time a
     determination  of  the  fair  market  value  of  a share of Common Stock is
     required  to  be made hereunder, the determination of its fair market value
     shall  be  made  by  the Committee in such manner, as it deems appropriate.

     (iii)  Exercise Period.  The Committee may provide in the option or warrant
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     agreement that an option or warrant may be exercised in whole, immediately,
     or  is  to  be  exercisable  in  increments. In addition, the Committee may
     provide that the exercise of all or part of an option or warrant is subject
     to  specified  performance  by  the  Participant.

     (iv) Procedure for Exercise.  Options or warrants shall be exercised in the
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     manner specified in the option or warrant agreement. The notice of exercise
     shall  specify the address to which the certificates for such shares are to
     be  mailed.  As  promptly  as practicable, the Company shall deliver to the
     Participant  or other holder of the warrant, certificates for the number of
     shares  with respect to which such option or warrant has been so exercised,
     issued in the holder's name or such other name as holder directs; provided,
     however,  that such delivery shall be deemed effected for all purposes when
     a  stock  transfer  agent  of  the  Company  shall  have  deposited  such
     certificates with a carrier for overnight delivery, addressed to the holder
     at  the  address  specified  pursuant  to  this  Section  5(d).

     (v) Termination of Employment.  If a Participant employee to whom an option
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     or  warrant  is granted ceases to be employed by the Company for any reason
     other  than death or disability, any option or warrant which is exercisable
     on  the  date  of  such termination of employment may be exercised during a
     period  beginning  on  such  date  and  ending at the time set forth in the
     option  or  warrant  agreement;  provided, however, that if a Participant's
     employment is terminated because of the Participant's theft or embezzlement
     from  the  Company,  disclosure  of  trade  secrets  of  the Company or the
     commission  of  a  willful,  felonious  act  while in the employment of the
     Company (such reasons shall hereinafter be collectively referred to as "for
     cause"),  then any option or warrant or unexercised portion thereof granted
     to  said  Participant  shall  expire  upon  such termination of employment.
     Notwithstanding  the  foregoing,  no  ISO may be exercised later than three
     months  after  an employee's termination of employment for any reason other
     than  death  or  disability.

     (vi) Disability or Death of Participant.  In the event of the determination
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     of  disability  or death of a Participant under the Plan while he or she is
     employed  by the Company, the options or warrants previously granted to him
     may be exercised (to the extent he or she would have been entitled to do so
     at  the  date  of the determination of disability or death) at any time and
     from  time  to  time,  within  a  period  beginning  on  the  date  of such

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     determination  of  disability  or death and ending at the time set forth in
     the  option  or  warrant agreement, by the former employee, the guardian of
     his estate, the executor or administrator of his estate or by the person or
     persons  to  whom his rights under the option or warrant shall pass by will
     or  the laws of descent and distribution, but in no event may the option or
     warrant  be exercised after its expiration under the terms of the option or
     warrant  agreement.  Notwithstanding the foregoing, no ISO may be exercised
     later  than  one  year  after  the  determination of disability or death. A
     Participant  shall  be  deemed  to  be  disabled  if,  in  the opinion of a
     physician  selected  by the Committee, he or she is incapable of performing
     services  for  the Company of the kind he or she was performing at the time
     the disability occurred by reason of any medically determinable physical or
     mental  impairment  which  can  be  expected to result in death or to be of
     long,  continued  and  indefinite  duration.  The  date of determination of
     disability  for  purposes hereof shall be the date of such determination by
     such  physician.

     (vii)  No  Right as Stockholder.  No Participant shall have any rights as a
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     stockholder  with  respect  to shares covered by an option or warrant until
     the  option  or warrant is exercised as provided in clause (d)(iv) above. A
     Participant  shall  be  deemed  to  be a stockholder with respect to shares
     covered  by  an  option  or warrant on the date of exercise pursuant to the
     option  or  warrant  agreement.

     (viii)  Assignability.  An  option  or  warrant  shall not be assignable or
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     otherwise  transferable,  in whole or in part, by a Participant except that
     an  option  or warrant may be transferable to a member of the Participant's
     immediate  family or to a trust in which the Participant and members of his
     immediate  family  are  the  only  beneficiaries.

     (ix) Incentive Stock Options.  Each option or warrant agreement may contain
          -----------------------
     such terms and provisions as the Committee may determine to be necessary or
     desirable  in  order  to  qualify  an  option  or  warrant designated as an
     incentive  stock  option.

SECTION 6. GRANT OF RESTRICTED STOCK.

(a)  Committee  Discretion.  Awards of restricted stock under this Plan shall be
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subject  to  all  the applicable provisions of this Plan and to such other terms
and  conditions  not  inconsistent  therewith, as the Committee shall determine.
Awards of restricted stock may be in addition to or in lieu of option or warrant
grants.  Awards  may  be conditioned on the attainment of particular performance
goals  based  on criteria established by the Committee at the time of each award
of  restricted  stock.

(b)  Restriction  Period.  During  a  period  set  forth  in  the agreement (the
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"Restriction  Period"),  the recipient shall not be permitted to sell, transfer,
pledge,  or  otherwise encumber the shares of restricted stock; except that such
shares may be used, if the agreement permits, to pay the option or warrant price
pursuant  to  any  option  or warrant granted under this Plan, provided an equal
number  of shares delivered to the Participant shall carry the same restrictions
as  the  shares  so  used.  Shares  of restricted stock shall become free of all
restrictions  if during the Restriction Period, (i) the recipient dies, (ii) the
recipient's  directorship,  employment,  or  consultancy terminates by reason of
permanent  disability,  as  determined  by  the  Committee,  (iii) the recipient

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retires  after  attaining  both 59 1/2 years of age and five years of continuous
service with the Company and/or a division or subsidiary, or (iv) if provided in
the agreement, there is a "change in control" of the Company (as defined in such
agreement).  The Committee may require medical evidence of permanent disability,
including  medical examinations by physicians selected by it.  Unless and to the
extent  otherwise provided in the agreement, shares of restricted stock shall be
forfeited  and  revert  to  the  Company  upon  the  recipient's  termination of
directorship,  employment  or  consultancy during the Restriction Period for any
reason  other  than death, permanent disability, as determined by the Committee,
retirement after attaining both 59 1/2 years of age and five years of continuous
service  with  the  Company  and/or  a subsidiary or division, or, to the extent
provided  in  the agreement, a "change in control" of the Company (as defined in
such  agreement),  except  to  the extent the Committee, in its sole discretion,
finds  that  such  forfeiture  might not be in the best interests of the Company
and,  therefore,  waives all or part of the application of this provision to the
restricted  stock  held  by  such  recipient.

(c)  Restriction.  Certificates  for restricted stock shall be registered in the
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name  of  the  recipient  but shall be imprinted with the appropriate legend and
returned  to  the Company by the recipient, together with a stock power endorsed
in  blank  by  the recipient.  The recipient shall be entitled to vote shares of
restricted  stock  and  shall  be entitled to all dividends paid thereon, except
that  dividends  paid in Common Stock or other property shall also be subject to
the  same  restrictions.

(d)  Termination  of  Restriction.  Restricted  Stock  shall  become free of the
     ----------------------------
foregoing  restrictions upon expiration of the applicable Restriction Period and
the  Company  shall  then  deliver  to  the  recipient Common Stock certificates
evidencing  such stock.  Restricted stock and any Common Stock received upon the
expiration  of  the  restriction  period shall be subject to such other transfer
restrictions  and/or  legend  requirements  as  are  specified in the applicable
agreement.

SECTION 7. GRANT OF UNRESTRICTED STOCK.

(a)  Bonuses  Payable  in Unrestricted Stock.  In lieu of cash bonuses otherwise
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payable  under  the  Company's  or  applicable  division's  or  subsidiary's
compensation  practices  to employees and consultants eligible to participate in
this  Plan,  the  Committee,  in  its  sole  discretion, may determine that such
bonuses  shall be payable in unrestricted Common Stock or partly in unrestricted
Common  Stock  and  partly  in  cash.  Such bonuses shall be in consideration of
services  previously  performed  and  as an incentive toward future services and
shall  consist  of  shares of unrestricted Common Stock subject to such terms as
the  Committee  may  determine  in its sole discretion.  The number of shares of
unrestricted  Common Stock payable in lieu of a bonus otherwise payable shall be
determined  by  dividing such bonus amount by the fair market value of one share
of  Common  Stock  on  the  date  the  bonus  is  payable.

(b)  Salaries  and  Fees Payable in Unrestricted Stock.  In lieu of salaries and
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fees  otherwise  payable  by the Company to employees, attorneys and consultants
eligible to participate in this Plan, the Committee, in its sole discretion, may
determine  that  such  unpaid salaries and fees shall be payable in unrestricted
Common  Stock  or  partly in unrestricted Common Stock and partly in cash.  Such
awards  shall  be  in  consideration  of services previously performed and as an
incentive  toward  future  services  and shall consist of shares of unrestricted
Common  Stock  subject  to such terms as the Committee may determine in its sole
discretion.  The  number  of  shares  of

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unrestricted Common Stock payable in lieu of salaries and fees otherwise payable
shall  be  determined  by dividing each calendar month's of unpaid salary or fee
amount  by  the  fair  market value of one share of Common Stock on the date the
salary  or  fee  is  payable.

SECTION 8. ADJUSTMENTS.

(a)  Extraordinary Corporate Transactions.  The existence of outstanding options
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or warrants shall not affect in any way the right or power of the Company or its
stockholders  to  make  or  authorize any or all adjustments, recapitalizations,
reorganizations,  exchanges, or other changes in the Company's capital structure
or  its business, or any merger or consolidation of the Company, or any issuance
of  Common  Stock  or  other  securities  or subscription rights thereto, or any
issuance  of  bonds, debentures, preferred or prior preference stock ahead of or
affecting  the  Common  Stock  or  the  rights  thereof,  or  the dissolution or
liquidation  of  the  Company, or any sale or transfer of all or any part of its
assets  or  business,  or  any  other  corporate act or proceeding, whether of a
similar  character  or  otherwise.  If  the  Company  recapitalizes or otherwise
changes  its capital structure, or merges, consolidates, sells all of its assets
or  dissolves  (each  of  the foregoing a "Fundamental Change"), then thereafter
upon  any  exercise  of an option or warrant theretofore granted the Participant
shall  be  entitled  to  purchase  under  such option or warrant, in lieu of the
number  of  shares  of  Common Stock as to which option or warrant shall then be
exercisable, the number and class of shares of stock and securities to which the
Participant  would  have  been entitled pursuant to the terms of the Fundamental
Change  if,  immediately  prior  to such Fundamental Change, the Participant had
been  the  holder  of record of the number of shares of Common Stock as to which
such option or warrant is then exercisable.  If (i) the Company shall not be the
surviving  entity  in  any  merger  or  consolidation  (or  survives  only  as a
subsidiary  of  another entity), (ii) the Company sells all or substantially all
of  its  assets  to  any  other  person  or  entity  (other  than a wholly owned
subsidiary),  (iii) any person or entity (including a "group" as contemplated by
Section  13(d)(3) of the Exchange Act) acquires or gains ownership or control of
(including,  without limitation, power to vote) more than 50% of the outstanding
shares  of  Common Stock, (iv) the Company is to be dissolved and liquidated, or
(v)  as a result of or in connection with a contested election of directors, the
persons  who  were  directors of the Company before such election shall cease to
constitute  a  majority of the Board (each such event in clauses (i) through (v)
above is referred to herein as a "Corporate Change"), the Committee, in its sole
discretion, may accelerate the time at which all or a portion of a Participant's
option or warrants may be exercised for a limited period of time before or after
a  specified  date.

(b) Changes in Company's Capital Structure.  If the outstanding shares of Common
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Stock  or  other  securities  of  the  Company, or both, for which the option or
warrant  is  then exercisable at any time be changed or exchanged by declaration
of  a  stock  dividend, stock split, combination of shares, recapitalization, or
reorganization,  the  number  and  kind  of  shares  of  Common  Stock  or other
securities  which  are subject to the Plan or subject to any options or warrants
theretofore granted, and the option or warrant prices, shall be ratably adjusted
to  reflect an increase or decrease in the number of shares of Common Stock that
may  be  purchased  and a decrease or increase in the purchase price pursuant to
such  options  or  warrants.

(c)  Acceleration  of  Options  and  Warrants.  Except as hereinbefore expressly
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provided,  (i)  the  issuance  by the Company of shares of stock or any class of
securities  convertible  into  shares  of

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stock  of  any  class,  for cash, property, labor or services, upon direct sale,
upon  the  exercise  of  rights  or  warrants  to  subscribe  therefor,  or upon
conversion  of shares or obligations of the Company convertible into such shares
or  other  securities,  (ii)  the  payment  of a dividend in property other than
Common Stock or (iii) the occurrence of any similar transaction, and in any case
whether  or  not  for  fair value, shall not affect, and no adjustment by reason
thereof  shall  be  made  with  respect to, the number of shares of Common Stock
subject  to  options  or  warrants theretofore granted or the purchase price per
share,  unless  the  Committee  shall determine, in its sole discretion, that an
adjustment  is  necessary  to  provide  equitable  treatment  to  Participant.
Notwithstanding  anything  to the contrary contained in this Plan, the Committee
may,  in its sole discretion, accelerate the time at which any option or warrant
may  be  exercised,  including,  but  not limited to, upon the occurrence of the
events  specified  in  this  Section  8, and is authorized at any time (with the
consent  of the Participant) to purchase options or warrants pursuant to Section
9.

SECTION 9. RELINQUISHMENT OF OPTIONS OR WARRANTS.

(a)  The  Committee,  in  granting  options  or  warrants  hereunder, shall have
discretion to determine whether or not options or warrants shall include a right
of  relinquishment  as  hereinafter  provided  by this Section 9.  The Committee
shall  also  have discretion to determine whether an option or warrant agreement
evidencing  an  option  or  warrant initially granted by the Committee without a
right of relinquishment shall be amended or supplemented to include such a right
of  relinquishment.  Neither  the  Committee  nor the Company shall be under any
obligation  or  incur  any  liability to any person by reason of the Committee's
refusal  to  grant or include a right of relinquishment in any option or warrant
granted  hereunder  or  in  any option or warrant agreement evidencing the same.
Subject  to  the Committee's determination in any case that the grant by it of a
right  of  relinquishment  is  consistent  with  Section 1 hereof, any option or
warrant  granted under this Plan, and the option or warrant agreement evidencing
such  option  or  warrant,  may  provide:

     (i)  That  the  Participant,  or  his  or  her  heirs  or  other  legal
     representatives  to  the  extent entitled to exercise the option or warrant
     under  the terms thereof, in lieu of purchasing the entire number of shares
     subject  to  purchase thereunder, shall have the right to relinquish all or
     any  part  of the then unexercised portion of the option or warrant (to the
     extent  then  exercisable)  for  a  number  of shares of Common Stock to be
     determined  in accordance with the following provisions of this clause (i):

          (A)  The  written  notice  of exercise of such right of relinquishment
          shall  state  the  percentage  of the total number of shares of Common
          Stock issuable pursuant to such relinquishment (as defined below) that
          the  Participant  elects  to  receive;

          (B) The number of shares of Common Stock, if any, issuable pursuant to
          such relinquishment shall be the number of such shares, rounded to the
          next  greater number of full shares, as shall be equal to the quotient
          obtained  by  dividing  (i) the Appreciated Value by (ii) the purchase
          price  for  each  of  such shares specified in such option or warrant;

          (C)  For the purpose of this clause (C), "Appreciated Value" means the
          excess,  if

                                        8
<PAGE>
          any,  of  (x)  the  total current market value of the shares of Common
          Stock  covered  by  the option or warrant or the portion thereof to be
          relinquished  over  (y)  the  total  purchase  price  for  such shares
          specified  in  such  option  or  warrant;

     (ii)  That  such right of relinquishment may be exercised only upon receipt
     by  the  Company  of a written notice of such relinquishment which shall be
     dated  the  date of election to make such relinquishment; and that, for the
     purposes of this Plan, such date of election shall be deemed to be the date
     when  such  notice is sent by registered or certified mail, or when receipt
     is  acknowledged  by  the  Company,  if  mailed by other than registered or
     certified mail or if delivered by hand or by any telegraphic communications
     equipment  of  the  sender  or  otherwise delivered; provided, that, in the
     event the method just described for determining such date of election shall
     not  be  or  remain  consistent with the provisions of Section 16(b) of the
     Exchange  Act  or  the  rules  and  regulations  adopted  by the Commission
     thereunder,  as  presently  existing  or as may be hereafter amended, which
     regulations  exempt from the operation of Section 16(b) of the Exchange Act
     in  whole or in part any such relinquishment transaction, then such date of
     election  shall  be determined by such other method consistent with Section
     16(b)  of  the  Exchange Act or the rules and regulations thereunder as the
     Committee  shall  in  its  discretion  select  and  apply;

     (iii)  That  the  "current  market  value"  of a share of Common Stock on a
     particular  date  shall be deemed to be its fair market value on that date;
     and

     (iv)  That  the  option  or  warrant,  or  any  portion  thereof,  may  be
     relinquished  only  to  the  extent  that (A) it is exercisable on the date
     written  notice  of  relinquishment is received by the Company, and (B) the
     holder  of  such option or warrant pays, or makes provision satisfactory to
     the Company for the payment of, any taxes which the Company is obligated to
     collect  with  respect  to  such  relinquishment.

(b)  The  Committee  shall have sole discretion to consent to or disapprove, and
neither  the Committee nor the Company shall be under any liability by reason of
the  Committee's disapproval of, any election by a holder of options or warrants
to  relinquish  such  options  or  warrants  in  whole or in part as provided in
Paragraph  9(a),  except that no such consent to or approval of a relinquishment
shall  be  required  under the following circumstances.  Each Participant who is
subject  to the short-swing profits recapture provisions of Section 16(b) of the
Exchange  Act ("Covered Participant") shall not be entitled to receive shares of
Common  Stock when options or warrants are relinquished during any window period
commencing  on  the  third  business  day  following  the Company's release of a
quarterly  or  annual  summary statement of sales and earnings and ending on the
twelfth  business  day  following  such  release  ("Window  Period").  A Covered
Participant  shall  be  entitled  to  receive  shares  of  Common Stock upon the
relinquishment  of  options  or  warrants  outside  a  Window  Period.

(c)  The  Committee,  in  granting  options  or  warrants  hereunder, shall have
discretion  to  determine the terms upon which such options or warrants shall be
relinquishable, subject to the applicable provisions of this Plan, and including
such  provisions  as  are  deemed  advisable  to  permit  the exemption from the
operation  from  Section  16(b)  of  the  Exchange  Act  of  any  such

                                        9
<PAGE>
relinquishment  transaction,  and  options  or  warrants outstanding, and option
agreements evidencing such options, may be amended, if necessary, to permit such
exemption.  If  options  or  warrants  are  relinquished, such option or warrant
shall  be deemed to have been exercised to the extent of the number of shares of
Common  Stock  covered  by  the  option  or  warrant  or  part  thereof which is
relinquished,  and  no  further options or warrants may be granted covering such
shares  of  Common  Stock.

(d)  Any  options or warrants or any right to relinquish the same to the Company
as  contemplated  by  this  Section  9  shall  be assignable by the Participant,
provided  the  transaction  complies  with  any  applicable  securities  laws.

(e)  Except as provided in Section 9(f) below, no right of relinquishment may be
exercised  within  the first six months after the initial award of any option or
warrant  containing,  or the amendment or supplementation of any existing option
or  warrant  agreement  adding,  the  right  of  relinquishment.

(f)  No  right of relinquishment may be exercised after the initial award of any
option  or  warrant  containing,  or  the  amendment  or  supplementation of any
existing  option or warrant agreement adding the right of relinquishment, unless
such  right  of  relinquishment  is  effective  upon  the  Participant's  death,
disability  or  termination  of  his  relationship with the Company for a reason
other  than  "for  cause."

SECTION  10.  AMENDMENTS  OR  TERMINATION.  The  Board  may  amend,  alter  or
discontinue  the  Plan, but no amendment or alteration shall be made which would
impair  the  rights of any Participant, without his consent, under any option or
warrant  theretofore  granted.

SECTION  11.  COMPLIANCE  WITH  OTHER LAWS AND REGULATIONS.  The Plan, the grant
and  exercise  of  options  or  warrants  thereunder,  and the obligation of the
Company  to  sell  and  deliver  shares under such options or warrants, shall be
subject  to  all applicable federal and state laws, rules and regulations and to
such approvals by any governmental or regulatory agency as may be required.  The
Company shall not be required to issue or deliver any certificates for shares of
Common  Stock  prior  to  the completion of any registration or qualification of
such  shares  under  any  federal  or  state  law  or  issuance of any ruling or
regulation  of  any  government  body  which  the  Company  shall,  in  its sole
discretion,  determine  to  be necessary or advisable.  Any adjustments provided
for  in  Section  8  shall  be subject to any stockholder action required by the
corporate  law  of  the  state  of  incorporation  of  the  Company.

SECTION  12.  PURCHASE FOR INVESTMENT.  Unless the options, warrants, and shares
of  Common  Stock covered by this Plan have been registered under the Securities
Act of 1933, as amended, or the Company has determined that such registration is
unnecessary, each person acquiring or exercising an option or warrant under this
Plan  may be required by the Company to give a representation in writing that he
or  she  is  acquiring such option or warrant or such shares for his own account
for  investment  and  not  with  a  view to, or for sale in connection with, the
distribution  of  any  part  thereof.

                                       10
<PAGE>
SECTION 13. TAXES.

(a)  The  Company  may  make  such provisions as it may deem appropriate for the
withholding  of any taxes which it determines is required in connection with any
options  or  warrants  granted  under  this  Plan.

(b) Notwithstanding the terms of Paragraph 13(a), any Participant may pay all or
any  portion  of the taxes required to be withheld by the Company or paid by him
or  her  in  connection with the exercise of a nonqualified option or warrant by
electing  to  have the Company withhold shares of Common Stock, or by delivering
previously owned shares of Common Stock, having a fair market value equal to the
amount  required  to be withheld or paid.  A Participant must make the foregoing
election  on  or  before  the  date  that  the  amount  of tax to be withheld is
determined  ("Tax  Date").  All  such  elections  are irrevocable and subject to
disapproval  by the Committee.  Elections by Covered Participants are subject to
the  following additional restrictions: (i) such election may not be made within
six  months  of the grant of an option or warrant, provided that this limitation
shall not apply in the event of death or disability, and (ii) such election must
be  made  either six months or more prior to the Tax Date or in a Window Period.
Where  the  Tax  Date  in  respect of an option or warrant is deferred until six
months  after exercise and the Covered Participant elects share withholding, the
full  amount of shares of Common Stock will be issued or transferred to him upon
exercise  of  the  option  or  warrant,  but  he or she shall be unconditionally
obligated  to  tender  back  to  the  Company  the number of shares necessary to
discharge  the  Company's withholding obligation or his estimated tax obligation
on  the  Tax  Date.

SECTION  14.  REPLACEMENT  OF  OPTIONS AND WARRANTS.  The Committee from time to
time  may  permit a Participant under the Plan to surrender for cancellation any
unexercised  outstanding  option  or  warrant  and  receive  from the Company in
exchange  an  option or warrant for such number of shares of Common Stock as may
be  designated  by  the  Committee.  The  Committee may, with the consent of the
holder  of  any  outstanding  option  or  warrant, amend such option or warrant,
including  reducing the exercise price of any option or warrant to not less than
the  fair  market  value  of  the  Common Stock at the time of the amendment and
extending  the  exercise  term  of  any  warrant  or  option.

SECTION  15.  NO  RIGHT  TO  COMPANY  EMPLOYMENT.  Nothing  in this Plan or as a
result  of  any  option or warrant granted pursuant to this Plan shall confer on
any  individual  any right to continue in the employ of the Company or interfere
in any way with the right of the Company to terminate an individual's employment
at  any  time.  The  option or warrant agreements may contain such provisions as
the  Committee  may  approve  with reference to the effect of approved leaves of
absence.

SECTION  16.  LIABILITY  OF  COMPANY.  The Company and any Affiliate which is in
existence or hereafter comes into existence shall not be liable to a Participant
or  other  persons  as  to:

(a)  The Non-Issuance of Shares.  The non-issuance or sale of shares as to which
     --------------------------
the  Company  has  been  unable  to  obtain  from  any  regulatory  body  having
jurisdiction  the  authority  deemed  by

                                       11
<PAGE>
the  Company's  counsel  to  be necessary to the lawful issuance and sale of any
shares  hereunder;  and

(b)  Tax  Consequences.  Any  tax consequence expected, but not realized, by any
     -----------------
Participant or other person due to the exercise of any option or warrant granted
hereunder.

SECTION  17.  EFFECTIVENESS AND EXPIRATION OF PLAN.  The Plan shall be effective
on  the  date  the Board adopts the Plan.  The Plan shall expire ten years after
the  date  the Board approves the Plan and thereafter no option or warrant shall
be  granted  pursuant  to  the  Plan.

SECTION 18.  NON-EXCLUSIVITY OF THE PLAN.  Neither the adoption by the Board nor
the submission of the Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other  incentive  arrangements  as  it  may  deem  desirable,  including without
limitation,  the  granting  of  restricted  stock  or  stock options or warrants
otherwise  than  under  the  Plan, and such arrangements may be either generally
applicable  or  applicable  only  in  specific  cases.

SECTION  19.  GOVERNING  LAW.  This  Plan  and any agreements hereunder shall be
interpreted  and  construed  in  accordance  with  the  laws  of  the  state  of
incorporation  of  the  Company  and  applicable  federal  law.

SECTION 20.  CASHLESS EXERCISE.  The Committee also may allow cashless exercises
as  permitted  under Federal Reserve Board's Regulation T, subject to applicable
securities  law  restrictions,  or  by  any  other  means  which  the  Committee
determines  to  be  consistent  with the Plan's purpose and applicable law.  The
proceeds  from such a payment shall be added to the general funds of the Company
and  shall  be  used  for  general  corporate  purposes.

                                       12
<PAGE><PAGE>
                                                                    Exhibit 4.01

                                 [FACE OF NOTE]

[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1)

[IF THIS NOTE IS AN ORIGINAL ISSUE DISCOUNT NOTE, INSERT THE FOLLOWING LANGUAGE:
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE IS % OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS [AND] THE YIELD TO MATURITY IS %. [THE METHOD USED TO
DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF , 20 TO , 20 , IS % OF THE PRINCIPAL AMOUNT OF THIS NOTE.]]

[IF THIS NOTE IS SUBJECT TO THE CONTINGENT PAYMENT DEBT REGULATIONS, ALSO INSERT
THE FOLLOWING LANGUAGE: IN ADDITION, THIS NOTE IS SUBJECT TO UNITED STATES
FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $[ ] PER $1,000 OF PRINCIPAL
AMOUNT AND THE COMPARABLE YIELD IS [ ]%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE
TREATED AS THE YIELD FOR UNITED STATES FEDERAL INCOME TAX PURPOSES). THE COMPANY
AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO
THE COMPANY AT THE FOLLOWING ADDRESS: [                         ].]

___________________________________
(1) This paragraph applies to global Notes only.
<PAGE>
<Table>
<Caption>
REGISTERED                      CUSIP No.:                        PRINCIPAL AMOUNT:
No. FXR-__                      -----------------------           --------------------

                          UNITED DOMINION REALTY TRUST, INC.

                                   MEDIUM-TERM NOTE
                                    (FIXED RATE)

<S>                             <C>                               <C>
ORIGINAL ISSUE DATE:            INTEREST RATE:  %                 STATED MATURITY
                                                                  DATE:

INTEREST PAYMENT DATE(S)        [ ] CHECK IF DISCOUNT NOTE
[ ] _______ and ______                 Issue Price: %
[ ] Other:

INITIAL REDEMPTION              INITIAL REDEMPTION                ANNUAL REDEMPTION
DATE:                           PERCENTAGE:   %                   PERCENTAGE
                                                                  REDUCTION:    %

OPTIONAL REPAYMENT
DATE(S):

SPECIFIED CURRENCY:             AUTHORIZED DENOMINATION:          EXCHANGE RATE
[ ] United States dollars       [ ] $1,000 and integral           AGENT:
[ ] Other:                           multiples thereof
                                [ ] Other:

ADDENDUM ATTACHED               DEFAULT INTEREST RATE:            OTHER/ADDITIONAL
                                                                     PROVISIONS:
[ ] Yes
[ ] No
</Table>

                                       2
<PAGE>
         UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to        ,
or registered assigns, the Principal Amount of       , on the Stated Maturity
Date specified above (or any Redemption Date or Repayment Date, each as defined
on the reverse hereof, or any earlier date of acceleration of maturity) (each
such date being hereinafter referred to as the "Maturity Date" with respect to
the principal repayable on such date) and to pay interest thereon (and on any
overdue principal, premium and/or interest to the extent legally enforceable) at
the Interest Rate per annum specified above, until the principal hereof is paid
or duly made available for payment. The Company will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date; provided,
however, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payment
will commence on the Interest Payment Date immediately following the next
succeeding Record Date to the registered holder (the "Holder") of this Note on
the next succeeding Record Date. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.

         Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes, as defined
on the reverse hereof) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined below) immediately
preceding such Interest Payment Date (the "Record Date"); provided, however,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for on any Interest Payment
Date other than the Maturity Date ("Defaulted Interest") shall forthwith cease
to be payable to the Holder on the close of business on any Record Date and,
instead, shall be paid to the person in whose name this Note is registered at
the close of business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the Holder of this Note by the
Trustee not less than 10 calendar days prior to such Special Record Date or may
be paid at any time in any other lawful manner, all as more fully provided for
in the Indenture.

         Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, upon delivery of [a duly completed election form](2)
[instructions](3) as contemplated on the reverse hereof) at the office or

----------

(2) This text applies to certificated Notes only.

(3) This text applies to global Notes only.

                                       3
<PAGE>
agency maintained by the Company for that purpose in the Borough of Manhattan,
The City of New York, currently the corporate trust office of the Trustee
located at 40 Broad Street, 5th Floor, New York, New York 10004, or at such
other paying agency in the Borough of Manhattan, The City of New York, as the
Company may determine; provided, however, that if the Specified Currency (as
defined below) is other than United States dollars and such payment is to be
made in the Specified Currency in accordance with the provisions set forth
below, such payment will be made by wire transfer of immediately available funds
to an account with a bank designated by the Holder hereof at least 15 calendar
days prior to the Maturity Date, provided that such bank has appropriate
facilities therefor and that this Note is presented and surrendered and, if
applicable, [a duly completed repayment election form is](4) [instructions
are](5) delivered at the aforementioned office or agency maintained by the
Company in time for the Trustee to make such payment in such funds in accordance
with its normal procedures. Payment of interest due on any Interest Payment Date
other than the Maturity Date will be made at the aforementioned office or agency
maintained by the Company or, at the option of the Company, by check mailed to
the address of the person entitled thereto as such address shall appear in the
Security Register maintained by the Trustee; provided, however, that a Holder of
U.S.$10,000,000 (or, if the Specified Currency is other than United States
dollars, the equivalent thereof in the Specified Currency) or more in aggregate
principal amount of Notes (whether having identical or different terms and
provisions) will be entitled to receive interest payments on such Interest
Payment Date by wire transfer of immediately available funds if such Holder has
delivered appropriate wire transfer instructions in writing to the Trustee not
less than 15 calendar days prior to such Interest Payment Date. Any such wire
transfer instructions received by the Trustee shall remain in effect until
revoked by such Holder.

         If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.

         As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that if the Specified Currency is other
than United States dollars, such day must also not be a day on which commercial
banks are authorized or required by law, regulation or executive order to close
in the Principal Financial Center (as defined below) of the country issuing the
Specified Currency (or, if the Specified Currency is Euro, such day must also be
a day on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open). "Principal Financial Center" means the
capital city of the country issuing the Specified Currency, except that with
respect to United States dollars, Australian dollars, Canadian dollars, Euros,

----------

(4)  This text applies to certificated Note only.

(5)  This text applies to global Notes only.

                                        4
<PAGE>

South African rands and Swiss francs, the "Principal Financial Center" shall be
The City of New York, Sydney, Toronto, Johannesburg and Zurich, respectively.

         The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the currency in which this Note is
denominated above (or, if such currency is not at the time of such payment legal
tender for the payment of public and private debts in the country issuing such
currency or, if such currency is Euro, in the member states of the European
Union that have adopted the single currency in accordance with the Treaty
establishing the European Community, as amended by the Treaty on European Union,
then the currency which is at the time of such payment legal tender in the
related country or in the adopting member states of the European Union, as the
case may be) (the "Specified Currency"). If the Specified Currency is other than
United States dollars, except as otherwise provided below, any such amounts so
payable by the Company will be converted by the Exchange Rate Agent specified
above into United States dollars for payment to the Holder of this Note.

         Any United States dollar amount to be received by the Holder of this
Note will be based on the highest bid quotation in The City of New York received
by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on
the second Business Day preceding the applicable payment date from three
recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent)
selected by the Exchange Rate Agent and approved by the Company for the purchase
by the quoting dealer of the Specified Currency for United States dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to all Holders of Notes scheduled to receive United States
dollar payments and at which the applicable dealer commits to execute a
contract. All currency exchange costs will be borne by the Holder of this Note
by deductions from such payments. If three such bid quotations are not
available, payments on this Note will be made in the Specified Currency.

         If the Specified Currency is other than United States dollars, the
Holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest, if any, in respect of
this Note in the Specified Currency by submitting a written request for such
payment to the Trustee at its corporate trust office in The City of New York on
or prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be. Such written request may be mailed or hand
delivered or sent by cable, telex or other form of facsimile transmission. The
Holder of this Note may elect to receive all or a specified portion of all
future payments in the Specified Currency in respect of such principal, premium,
if any, and/or interest, if any, and need not file a separate election for each
payment. Such election will remain in effect until revoked by written notice
delivered to the Trustee, but written notice of any such revocation must be
received by the Trustee on or prior to the applicable Record Date or at least 15
calendar days prior to the Maturity Date, as the case may be.

         If the Specified Currency is other than United States dollars and the
Holder of this Note shall have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest,
if any, in respect of this Note in the Specified Currency, but the Specified
Currency is not available due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company will be entitled to
satisfy its obligations to the Holder of this Note by making such payment in
United States dollars on the

                                       5
<PAGE>

basis of the Market Exchange Rate (as defined below) determined by the Exchange
Rate Agent on the second Business Day prior to such payment date or, if such
Market Exchange Rate is not then available, on the basis of the most recently
available Market Exchange Rate. The "Market Exchange Rate" for the Specified
Currency other than United States dollars means the noon dollar buying rate in
The City of New York for cable transfers for the Specified Currency as certified
for customs purposes (or, if not so certified, as otherwise determined) by the
Federal Reserve Bank of New York. Any payment made in United States dollars
under such circumstances shall not constitute an Event of Default (as defined in
the Indenture).

         All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.

         The Company agrees to indemnify the Holder of any Note against any loss
incurred by such Holder as a result of any judgment or order being given or made
against the Company for any amount due hereunder and such judgment or order
requiring payment in a currency (the "Judgment Currency") other than the
Specified Currency, and as a result of any variation between (i) the rate of
exchange at which the Specified Currency amount is converted into the Judgment
Currency for the purpose of such judgment or order, and (ii) the rate of
exchange at which such Holder, on the date of payment of such judgment or order,
is able to purchase the Specified Currency with the amount of the Judgment
Currency actually received by such Holder, as the case may be. The foregoing
indemnity constitutes a separate and independent obligation of the Company and
continues in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" includes any premiums and costs of
exchange payable in connection with the purchase of, or conversion into, the
relevant currency.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall have the same force and effect
as if set forth on the face hereof.

         Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".

         Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

                                       6
<PAGE>
         IN WITNESS WHEREOF, United Dominion Realty Trust, Inc. has caused this
Note to be duly executed by one of its duly authorized officers.

                                              UNITED DOMINION REALTY TRUST, INC.

                                              By
                                                --------------------------------
                                                Name:
                                                Title:

ATTEST:

By
  --------------------------
   Name:
   Title:

Dated:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee

By
  ---------------------------
     Authorized Signatory

                                       7
<PAGE>

                                [REVERSE OF NOTE]

                       UNITED DOMINION REALTY TRUST, INC.

                                MEDIUM-TERM NOTE
                                  (FIXED RATE)

         This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under an Indenture,
dated as of November 1, 1995, as amended, modified or supplemented from time to
time (the "Indenture"), between the Company (successor by merger to United
Dominion Realty Trust, Inc., a Virginia corporation) and Wachovia Bank, National
Association, (formerly known as First Union National Bank of Virginia) as
trustee (the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Debt Securities, and of the terms upon which the Debt Securities are, and
are to be, authenticated and delivered. This Note is one of the series of Debt
Securities designated as "Medium-Term Notes Due Nine Months or More From Date of
Issue" (the "Notes"). All terms used but not defined in this Note or in an
Addendum hereto shall have the meanings assigned to such terms in the Indenture
or on the face hereof, as the case may be.

         This Note is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof or other
Authorized Denomination specified on the face hereof.

         This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.

         This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S. $1,000 or
other integral multiple of an Authorized Denomination (provided that any
remaining principal amount hereof shall be at least U.S. $1,000 or such other
minimum Authorized Denomination), at the Redemption Price (as defined below),
together with unpaid interest accrued thereon to the date fixed for redemption
(the "Redemption Date"), on written notice given to the Holder hereof (in
accordance with the provisions of the Indenture) not more than 60 nor less than
30 calendar days prior to the Redemption Date. The "Redemption Price" shall be
an amount equal to the Initial Redemption Percentage specified on the face
hereof (as adjusted by the Annual Redemption Percentage Reduction, if any,
specified on the face hereof) multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage, if any, shall decline at
each anniversary of the Initial Redemption Date by the Annual Redemption
Percentage Reduction, if any, until the Redemption Price is 100% of unpaid
principal amount to be redeemed. In the event of redemption of this Note in part
only, a new Note of like tenor for the unredeemed portion hereof and otherwise
having the same

                                       8
<PAGE>
terms and provisions as this Note shall be issued by the Company in the name of
the Holder hereof upon the presentation and surrender hereof.

         This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or from time to time in part in increments of U.S. $1,000
or other integral multiple of an Authorized Denomination (provided that any
remaining principal amount hereof shall be at least U.S. $1,000 or such other
minimum Authorized Denomination), at a repayment price equal to 100% of the
unpaid principal amount to be repaid, together with unpaid interest accrued
thereon to the date fixed for repayment (the "Repayment Date"). For this Note to
be repaid, the Trustee must receive at its corporate trust office in the Borough
of Manhattan, The City of New York, not more than 60 nor less than 30 calendar
days prior to the Repayment Date, such Note and [the form hereon entitled
"Option to Elect Repayment" duly completed](6) [instructions to such effect
forwarded by the Holder hereof].(7) Exercise of such repayment option by the
Holder hereof shall be irrevocable. In the event of repayment of this Note in
part only, a new Note of like tenor for the unrepaid portion hereof and
otherwise having the same terms and provisions as this Note shall be issued by
the Company in the name of the Holder hereof upon the presentation and surrender
hereof.

         If this Note is specified on the face hereof to be a Discount Note, the
amount payable to the Holder of this Note in the event of redemption, repayment
or acceleration of maturity will be equal to the sum of (1) the Issue Price
specified on the face hereof (increased by any accruals of the Discount, as
defined below) and, in the event of any redemption of this Note (if applicable),
multiplied by the Initial Redemption Percentage (as adjusted by the Annual
Redemption Percentage Reduction, if applicable) and (2) any unpaid interest
accrued thereon to the Redemption Date, Repayment Date or date of acceleration
of maturity, as the case may be. The difference between the Issue Price and 100%
of the principal amount of this Note is referred to herein as the "Discount".

         For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause the yield on the Note to
be constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.

----------

(6) This text applies to certificated Notes only.

(7) This text applies to global Notes only.

                                       9
<PAGE>
         In addition to the covenants set forth in the Indenture, the Company is
required to maintain Total Unencumbered Assets (as defined below) of not less
than 150% of the aggregate outstanding principal amount of the Company's
Unsecured Debt (as defined below). For purposes of this requirement, the
following capitalized terms shall be defined as follows:

         "Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets (as defined below) not subject to an encumbrance and (ii) all
other assets of the Company and its Subsidiaries (as defined below) not subject
to encumbrance determined in accordance with generally accepted accounting
principles (but excluding accounts receivable and intangibles).

         "Subsidiaries" means a corporation, a limited liability company or a
partnership a majority of the outstanding voting stock, limited liability
company or partnership interests, as the case may be, of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company. For purposes of this definition, "voting stock" means stock having
voting power for the election of directors, managing members or trustees,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.

         "Undepreciated Real Estate Assets" as of any date means the original
cost plus capital improvements of real estate assets of the Company and its
Subsidiaries determined in accordance with generally accepted accounting
principles.

         "Unsecured Debt" means debt of the Company or any Subsidiary which is
not secured by any mortgage, lien, charge, pledge or security interest of any
kind upon any of their properties.

         If an Event of Default shall occur and be continuing, the principal of
the Notes may, and in certain cases shall, be accelerated in the manner and with
the effect provided in the Indenture.

         [The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.](8)

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the Holders of a majority of the
aggregate principal amount of all Debt Securities at the time outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority of the aggregate principal amount of the outstanding Debt
Securities of any series, on behalf of the Holders of all such Debt Securities,
to waive compliance by the Company with certain provisions of the Indenture.
Furthermore, provisions in the Indenture permit the Holders of a majority of the
aggregate principal amount of the outstanding Debt Securities of any series, in
certain instances, to waive, on behalf of all of the Holders of Debt Securities
of such series,

----------

(8) Reference should be made to the terms of the particular series of Notes
    as to whether or not this paragraph applies.

                                       10
<PAGE>
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange heretofore or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
[and herein](9) set forth, the transfer of this Note is registrable in the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the principal
hereof and any premium or interest hereon are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes having
the same terms and provisions, of Authorized Denominations and for the same
aggregate principal amount, will be issued by the Company to the designated
transferee or transferees.

         As provided in the Indenture and subject to certain limitations therein
[and herein](10) set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different Authorized Denominations but otherwise
having the same terms and provisions, as requested by the Holder hereof
surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary, except as required by law.

         THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.

----------

(9)  This text applies to global Notes only.

(10) This text applies to global Notes only.

                                       11
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:

<Table>
<S>        <C>                                    <C>                 <C>
TEN COM    - as tenants in common                 UNIF GIFT MIN ACT   - ______ Custodian _______
TEN ENT    - as tenants by the entireties                               (Cust)           (Minor)
                                                                        under Uniform Gifts
JT TEN     - as joint tenants with right of                             to Minors Act___________
             survivorship and not as                                                     (State)
             tenants in common
</Table>

           Additional abbreviations may also be used though not in the
above list.

                       ----------------------------------

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
              OTHER
IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)

--------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting and
appointing

--------------------------------------------------------------------------------
Attorney to transfer this Note on the books of the Company, with full power of
substitution in the premises.

Dated:
      --------------------------                --------------------------------

      --------------------------                --------------------------------
                                                Notice: The signature(s)on this
                                                Assignment must correspond with
                                                the name(s) as written upon the
                                                face of this Note in every
                                                particular, without alteration
                                                or enlargement or any change
                                                whatsoever.

                                       12
<PAGE>
                           [OPTION TO ELECT REPAYMENT

         The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________

_______________________________________________________________________________.

--------------------------------------------------------------------------------
        (Please print or typewrite name and address of the undersigned)

         For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at 40 Broad Street, 5th Floor, New York, New York 10004, not more than
60 nor less than 30 calendar days prior to the Repayment Date, this Note with
this "Option to Elect Repayment" form duly completed.

         If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 or other
integral multiple of an Authorized Denomination) (provided that any remaining
principal amount shall be at least U.S. $1,000 or such other minimum Authorized
Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S. $1,000 or such other minimum
Authorized Denomination) of the Notes to be issued to the Holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).

Name:
       -----------------------------
Capacity:
           -------------------------
Address:
          --------------------------
Telephone No.:
                --------------------
Tax Identification
  or Social Security No.:
                           ---------

Principal Amount
to be Repaid:  $
                --------------------           ---------------------------------
                                               Notice:  The signature(s) on
Date:                                          this Option to Elect Repayment
       -----------------------------           must correspond with the name(s)
                                               as written upon the face of this
                                               Note in every particular,without
                                               alteration or enlargement or any
                                               change whatsoever.](11)

                                               ---------------------------------
                                               Medallion Signature Guarantee

----------

(11) This form applies to certificated Notes only.

                                       13

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