OF

                          PLAN AND AGREEMENT OF MERGER

                                       OF

                            ATSI COMMUNICATIONS, INC.
                            (a Delaware corporation)

                                       AND

                             ATSI MERGER CORPORATION
                             (a Nevada corporation)

PLAN  AND  AGREEMENT  OF  MERGER  entered  into  on  March  24,  2004,  by  ATSI
Communications,  Inc.,  a  Delaware  corporation  ("ATSI"),  and  ATSI  Merger
Corporation,  a  Nevada  corporation  ("Merger  Corporation").

     WHEREAS,  ATSI  is  a  business  corporation  of the State of Delaware; and

     WHEREAS,  Merger  Corporation  is  a  business  corporation of the State of
Nevada;  and

     WHEREAS,  the  Delaware  General  Corporation  Law  permits  a  merger of a
business  corporation  of  the  State  of  Delaware  with  and  into  a business
corporation  of  another  jurisdiction;  and

     WHEREAS,  the  Nevada  Revised  Statutes  permit  the  merger of a business
corporation  of another jurisdiction with and into a business corporation of the
State  of  Nevada;  and

     WHEREAS, ATSI and Merger Corporation and the respective Boards of Directors
thereof  declare  it advisable and to the advantage, welfare, and best interests
of  said  corporations  and their respective stockholders to merge ATSI with and
into  Merger  Corporation  pursuant  to  the  provisions of the Delaware General
Corporation  Law  and  pursuant to the provisions of the Nevada Revised Statutes
upon  the  terms  and  conditions  hereinafter  set  forth;

     NOW,  THEREFORE,  in  consideration  of  the  premises  and  of  the mutual
agreement  of  the parties hereto, being thereunto duly entered into by ATSI and
approved  by  a resolution adopted by its Board of Directors and being thereunto
duly  entered into by Merger Corporation and approved by a resolution adopted by
its  Board of Directors, the Merger and the terms and conditions thereof and the
mode  of carrying the same into effect, are hereby determined and agreed upon as
hereinafter  in  this  Plan  and  Agreement  of  Merger  set  forth.

     1.   ATSI  shall,  pursuant  to  the  provisions  of  the  Delaware General
Corporation  Law and to the provisions of the Nevada Revised Statutes, be merged
with  and into Merger Corporation, which shall be the surviving corporation from
and  after  the  effective time of the Merger and which is sometimes hereinafter
referred to as the "surviving corporation," and which shall continue to exist as
said  surviving corporation under its present name pursuant to the provisions of
the Nevada Revised Statutes.  The separate existence of ATSI, which is sometimes
hereinafter  referred  to  as  the



"terminating corporation," shall cease at said effective time in accordance with
the  provisions  of  the  Delaware  General  Corporation  Law.

     2.   The  name  of  the  surviving  corporation  shall  be  changed to ATSI
Communications,  Inc.  The  surviving  corporation  shall  designate a series of
preferred stock (the "Series H Convertible Preferred Stock") having preferences,
limitations, and relative rights as set forth in Schedule A attached hereto.  As
amended, the present Articles of Incorporation of the surviving corporation will
be  the Articles of Incorporation of the surviving corporation and will continue
in  full force and effect until changed, altered, or amended as therein provided
and  in  the manner prescribed by the provisions of the Nevada Revised Statutes.

     3.   The  present bylaws of the surviving corporation will be the bylaws of
said  surviving  corporation  and  will  continue in full force and effect until
changed, altered, or amended as therein provided and in the manner prescribed by
the  provisions  of  the  Nevada  Revised  Statutes.

     4.   The  directors  and officers in office of the surviving corporation at
the  effective time of the Merger shall be the members of the Board of Directors
and  the  officers  of  the  surviving corporation, all of whom shall hold their
directorships  and  offices  until  the  election  and  qualification  of  their
respective  successors  or  until  their  tenure  is  otherwise  terminated  in
accordance  with  the  bylaws  of  the  surviving  corporation.

     5.   Each  issued  share of the common stock of the terminating corporation
shall,  from  and  after the effective time of the Merger, be converted into one
one-hundredth  (.01)  share of the common stock of the surviving corporation and
one-tenth  (.1)  share  of  the  Series  H  Convertible  Preferred  Stock of the
surviving  corporation.  The  surviving  corporation  shall  not  issue  any
certificate  or  script  representing  a  fractional  share  of  common stock or
preferred stock.  Any fractional shares that would otherwise be issuable will be
rounded up to the next full share.  Pursuant to the laws of the State of Nevada,
each  share  of  the  terminating corporation shall be tendered to the surviving
corporation for exchange into shares of the surviving corporation within 60 days
after  the  effective  time  of  the Merger.  Upon receipt of such shares of the
terminating corporation, the surviving corporation shall issue a certificate for
the  whole  shares of the common stock and a certificate for the whole shares of
the  preferred  stock of the surviving corporation that are issuable in exchange
for  the  shares  of  the  terminating corporation.  The shares of the surviving
corporation  that are outstanding immediately prior to the effective time of the
Merger shall be cancelled and deemed not outstanding as of the effective time of
the  Merger.

     6.   Each  issued  share  of  the  preferred  stock  of  the  terminating
corporation shall, from and after the effective time of the Merger, be converted
into  one  share  of  the  preferred  stock of the surviving corporation, having
substantially  similar  powers,  designations,  preferences  and  relative,
participating,  optional  and  other  rights  as  the  preferred  shares  of the
terminating  corporation.  Pursuant  to  the  laws  of the State of Nevada, each
share of the preferred stock of the terminating corporation shall be tendered to
the surviving corporation for exchange into shares of the preferred stock of the
surviving  corporation  within  60  days after the effective time of the Merger.


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     7.   The  surviving  corporation  may xxx in any court with jurisdiction to
cause  any  stockholder  of  the  terminating corporation to tender certificates
representing  shares  owned  by such stockholder to be tendered to the surviving
corporation  for  exchange.  Stockholders  of  the terminating corporation shall
have no rights to notices, distributions or voting with respect to the surviving
corporation  unless  the  certificates  representing  shares  of the terminating
corporation  are  tendered  to  the  surviving  corporation  for  exchange.

     8.   Except  to  the  extent otherwise provided in the terms of outstanding
options, warrants or other rights to purchase, or securities convertible into or
exchangeable  for common stock of the terminating corporation (other than shares
of the preferred stock of the terminating corporation), each outstanding option,
warrant  or  other  right to purchase, and each outstanding security convertible
into or exchangeable for common stock shall be converted into an option, warrant
or  other  right  to  purchase, or security convertible into or exchangeable for
common  stock  of  the  surviving  corporation on the basis of one one-hundredth
(.01)  share of the common stock of the surviving corporation and one-tenth (.1)
share  of  the Series H Convertible Preferred Stock of the surviving corporation
for  each  share  of  common stock of the terminating corporation.  The exercise
price  or  conversion  ratio set forth in such option, warrant or other right to
purchase,  or  security convertible into or exchangeable for common stock of the
surviving  corporation  shall  be ratably adjusted so that the total exercise or
conversion  price shall be the same as under the option, warrant, or other right
to  purchase,  or  security convertible into or exchangeable for common stock of
the  terminating  corporation.

     9.   In  the  event  that this Plan and Agreement of Merger shall have been
fully  approved  and  adopted  upon  behalf  of  the  terminating corporation in
accordance  with the provisions of the Delaware General Corporation Law and upon
behalf  of  the  surviving  corporation in accordance with the provisions of the
Nevada  Revised Statutes, the said corporations agree that they will cause to be
executed and filed and recorded any document or documents prescribed by the laws
of  the  State of Delaware and by the laws of the State of Nevada, and that they
will  cause  to be performed all necessary acts within the State of Delaware and
the  State of Nevada and elsewhere to effectuate the Merger herein provided for.

     10.  The  Board  of  Directors  and  the proper officers of the terminating
corporation  and  of the surviving corporation are hereby authorized, empowered,
and  directed  to do any and all acts and things, and to make, execute, deliver,
file,  and  record any and all instruments, papers, and documents which shall be
or  become  necessary, proper, or convenient to carry out or put into effect any
of  the  provisions of this Plan and Agreement of Merger or of the Merger herein
provided  for.

     11.  The  effective time of this Plan and Agreement of Merger, and the time
at  which  the  Merger  herein  agreed  shall  become  effective in the State of
Delaware  and  the  State  of  Nevada,  shall  be  on  the  last  to  occur  of:

     (a)  the  approval of this Plan and Agreement of Merger by the stockholders
          of the terminating corporation in accordance with the Delaware General
          Corporation  Law;


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          or
     (b)  the  date  this  Plan  and  Agreement of Merger, or Articles of Merger
          meeting the requirements of the Nevada Revised Statutes, is filed with
          the  Secretary  of  State  of  the  State  of  Nevada;  or

     (c)  May  24,  2004.

     12.  Notwithstanding  the  full  approval  and  adoption  of  this Plan and
Agreement  of Merger, the said Plan and Agreement of Merger may be terminated at
any time prior to the filing thereof with the Secretary of State of the State of
Nevada.

     13.  Notwithstanding  the  full  approval  and  adoption  of  this Plan and
Agreement of Merger, the said Plan and Agreement of Merger may be amended at any
time  and  from  time  to time prior to the filing thereof with the Secretary of
State  of  the  State of Delaware and at any time and from time to time prior to
the  filing of any requisite Merger documents with the Secretary of State of the
State  of  Nevada  except that, without the approval of the stockholders of ATSI
and the stockholders of Merger Corporation, no such amendment may (a) change the
rate of exchange for any shares of ATSI or the types or amounts of consideration
that  will  be  distributed  to  the holders of the shares of stock of ATSI; (b)
change  any  term of the Articles of Incorporation of the surviving corporation;
or  (c) adversely affect any of the rights of the stockholders of ATSI or Merger
Corporation.

     IN  WITNESS  WHEREOF,  this Plan and Agreement of Merger is hereby executed
upon  behalf  of  each  of  the  constituent  corporation  parties  thereto.

Dated:  March 24, 2004      ATSI COMMUNICATIONS, INC.

                                     /s/  Xxxxxx X. Xxxxx
                            By:
                               ------------------------------------------------
                               Name:   Xxxxxx X. Xxxxx
                               Title:  President and Chief Executive Officer


                            ATSI MERGER CORPORATION

                                     /s/  Xxxxxx X. Xxxxx
                            By:
                               ------------------------------------------------
                               Name:   Xxxxxx X. Xxxxx
                               Title:  President and Chief Executive Officer


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