UCAP INC
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>v02879_ex10-1.txt
<TEXT>
                            REVOLVING LINE OF CREDIT
                                 LOAN AGREEMENT

      This agreement  ("Agreement") is made and entered into effective as of the
14th day of April,  2004 (the  "Effective  Date")  by and among  United  Capital
Mortgage Corporation,  an Arkansas corporation  ("Borrower") and Absolute Return
Europe Fund, Ltd. ("ARE") and Florian Homm ("Homm") (ARE and Homm, collectively,
the "Lender").

                                    RECITALS:

      Borrower  desires to obtain from  Lender a  revolving  line of credit (the
"Loan")  and  Lender  is  willing  to make the  Loan,  but only on the terms and
conditions hereinafter set forth.

      NOW,  THEREFORE in  consideration  of the premises and the mutual promises
herein  contained  and other good and  valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

      1.    LOAN.

            1.1 REVOLVING  LINE OF CREDIT.  Subject to the terms and  conditions
contained herein and in the other documents, instruments and agreements executed
in  connection  with the Loan (the "Loan  Documents"),  Lender agrees to lend to
Borrower the Loan as a revolving  line of credit  against which Lender will make
advances (the "Advances") from time to time for the purpose of providing working
capital to Borrower.  Subject to the terms hereof, Borrower shall have the right
to obtain Advances, repay Advances and obtain additional Advances;  however, all
of the Advances hereunder shall be viewed as a single loan. At no time shall the
unpaid principal balance of the Loan exceed Two Million Dollars  ($2,000,000.00)
(the  "Maximum  Amount") and all Advances of the Loan shall be made on or before
December 31, 2004 (the "Maturity Date"), unless otherwise extended at the option
of Borrower pursuant to Section 1.2 hereof. Lender's obligation to make Loans to
Borrower under this Agreement is hereinafter referred to as the "Commitment".

            1.2 OPTION TO EXTEND.  Borrower  shall have the option to extend the
Maturity  Date without  penalty or interest for a period of 8.5 months ending on
August 15, 2005 by (a)  providing  Lender  written  notice of its  intention  to
extend  the  Maturity  Date at any time prior to  December  31,  2004;  rovided,
however,  that there has been no Event of  Default,  which has not been cured or
waived by Lender.

            1.3 NOTE.  The Loan shall be  evidenced  by a  promissory  note (the
"Note")  of even date  herewith  in a form  approved  by  Lender in the  Maximum
Amount, payable in accordance with the terms thereof.  Interest on the principal
amount  outstanding  from time to time shall be charged as  provided in the Note
and should such rate of interest as calculated thereunder exceed that allowed by
law,  the  applicable  rate of  interest  will be the  maximum  rate of interest
allowed by applicable law.

            1.4 PREPAYMENTS.  Borrower may from time to time, prepay all or part
of the outstanding principal balance of the Loan.

      2.    ADVANCES.

            2.1  CONDITIONS  PRECEDENT TO ADVANCES.  Lender shall have  complete
discretion as to whether to make any and all Advances hereunder.


<PAGE>


            2.2 REQUEST FOR ADVANCES. Advances may be made by Lender at the oral
or written  request of the persons named in Section 12.2 hereof,  any one acting
alone, who are authorized to request Advances and direct disposition of any such
Advances  until written  notice of the  revocation of such authority is received
from Borrower by Lender.

            2.3  Subject to this  Section 2, the  Borrower  shall be entitled to
borrow,  repay and reborrow the principal amount of this Loan at any time during
the term of this Loan.

            2.4 The  parties  acknowledge  that the advance  previously  made by
Lender to UCAP in the amount of $1,000,000 on March 31, 2004 shall be considered
an Advance under this Agreement.

      3.    COLLATERAL AND GUARANTY

            3.1 The repayment by Borrower of its indebtedness under the Loan and
the  Note,  and the  performance  by  Borrower  of all  obligations  under  this
Agreement  shall be secured by a security  interest in all of the  Collateral of
UCMC as such term is defined in and  pursuant  to a Security  Agreement  of even
date herewith in a form approved by Lender (the "UCMC Security Agreement").

            3.2 The repayment by Borrower of its indebtedness under the Loan and
the  Note,  and the  performance  by  Borrower  of all  obligations  under  this
Agreement  shall  be  further  secured  by a  security  interest  in  all of the
Collateral of UCAP Incorporated,  a Colorado  corporation and parent corporation
of  borrower  ("UCAP")  as such term is  defined in and  pursuant  to a Security
Agreement of even date herewith in a form approved by Lender (the "UCAP Security
Agreement").

            3.3 Borrower and UCAP shall  execute and deliver,  or shall cause to
be executed and delivered,  UCC financing  statements  and such other  documents
relating to and  perfecting  Lender's  security  interest in the  Collateral  as
Lender may from time to time request.

            3.4 The repayment by Borrower of its indebtedness under the Loan and
the  Note,  and the  performance  by  Borrower  of all  obligations  under  this
Agreement  shall  be  further  secured  by a  pledge  of all of the  issued  and
outstanding  stock of Borrower by UCAP  pursuant to a Pledge  Agreement  of even
date herewith in a form approved by Lender (the "Pledge Agreement").

      4.    GUARANTY.  As  additional  consideration  for Lender's commitment to
make the Loan, UCAP shall guaranty  the full  and punctual  payment  (whether at
stated  maturity,  upon   acceleration  or  otherwise) of  the principal  of and
interest on the Note  pursuant to a  Guaranty  Agreement  of even date  herewith
 in a form approved by Lender (the "Guaranty Agreement").

      5.    REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.

            Borrower represents and warrants to Lender as follows:

            5.1 Borrower is a corporation  duly organized,  validly existing and
in good standing under the laws of Arkansas,  and is qualified to do business in
all jurisdictions in which it is required to be qualified.

            5.2 The execution  and delivery by Borrower of, and the  performance
by Borrower of its obligations under, this Agreement and the Note have been duly
authorized by all  requisite  action on the part of Borrower and do not and will
not (i) violate any provision of Borrower's  organizational  documents, (ii) any
law or any judgment,  order or ruling of any court or  governmental  agency,  or
(iii) be in  conflict  with,  result in a breach  of, or  constitute,  following
notice  or  lapse of time or both,  a  default  under  any  material  indenture,


                                      -2-
<PAGE>


agreement or other  instrument to which Borrower is a party or by which Borrower
or any of its property is bound.

            5.3 This  Agreement  and the Note  constitute  the legal,  valid and
binding agreements of Borrower enforceable in accordance with their terms.

            5.4  Except  as  reported  in the  reports  filed  by UCAP  with the
Securities  and  Exchange  Commission  or as  otherwise  provided  to  Lender in
writing,  there are no pending or threatened  actions or proceedings  before any
court or  administrative  or  governmental  agency  that  may,  individually  or
collectively, adversely affect the financial condition or business operations of
Borrower.

            5.5 The  financial  statements  previously  delivered by Borrower to
Lender,  fairly and accurately present the financial condition of Borrower as of
such  date  and  have  been  prepared  in  accordance  with  generally  accepted
accounting  principles  consistently  applied.  Since the date of such financial
statements, there has been no material adverse change in the financial condition
of Borrower,  and, after reasonable inquiry, there exists no material contingent
liability or obligation assertable against Borrower, except as disclosed in such
financial statements.

            5.6 All federal, state and other tax returns of Borrower required by
law to be filed have been  completed  in full and have been duly filed,  and all
taxes,  assessments and withholdings shown on such returns or billed to Borrower
have been paid, and Borrower maintains adequate reserves and accruals in respect
of all such federal, state and other taxes, assessments and withholdings.  There
are no assessments  pending against Borrower for any taxes or withholdings,  and
Borrower knows of no basis therefor.

            5.7 Except  with  respect to  Residential  Funding  Corporation,  as
reported  by UCAP in the  reports  that it files with the SEC,  or as  otherwise
reported in writing to Lender,  the obligations of Borrower under this Agreement
and the Note are not  currently  subordinated  in right of  payment to any other
obligations of Borrower.

            5.8 No event has occurred and is continuing  which is, or which with
the giving of notice or lapse of time or both would be, an Event of Default  (as
defined in Section 8 below).

      6.    AFFIRMATIVE COVENANTS.

            Borrower  covenants  and agrees that, so long as it may borrow under
this Agreement or so long as any indebtedness remains outstanding under the Loan
or under the Note, Borrower shall:

            6.1 Maintain  its books,  accounts  and records in  accordance  with
generally accepted  accounting  principles and shall permit any person or entity
designated  in writing  by Lender to visit and  inspect  any of its  properties,
books and financial records, and to make copies thereof.

            6.2 Pay and discharge all taxes, assessments, fees, withholdings and
other  governmental  charges  or levies  imposed  upon it or upon its income and
profits,  or upon  any  property  belonging  to it,  prior  to the date on which
penalties  attached  thereto,  unless the legality thereof shall be promptly and
actively contested in good faith by appropriate proceedings.

            6.3 Promptly notify Lender in writing of the occurrence of any Event
of Default or of any pending or threatened  litigation  claiming  damages in any
amount seeking relief that, if granted,  would  materially  adversely affect the
financial condition or business operations of Borrower.


                                      -3-
<PAGE>


      7.    NEGATIVE COVENANTS.

            Borrower  covenants  and  agrees  that,  without  the prior  written
consent of Lender,  so long as it may borrow under this  Agreement or so long as
any indebtedness  remains outstanding under the Loan or under the Note, Borrower
shall not:

            7.1 Use any  proceeds  of the Loan  except for  purposes  of working
capital or as otherwise agreed to in writing by Lender.

            7.2 Merge,  consolidate or enter into a partnership or joint venture
with any other person or entity; or sell,  lease,  transfer or otherwise dispose
of all or any substantial  portion of its assets,  except in the ordinary course
of business.

            7.3 Guarantee or become  contingently  liable for any  obligation or
indebtedness  of any other  person or entity,  except that  Borrower may endorse
negotiable  instruments  for  collection  in the  ordinary  course of  business,
including  with  respect to those  sources of  financing  disclosed  pursuant to
Section 5.7.

            7.4 Make any loans,  advances or  extensions of credit to any person
or entity, except in the ordinary course of business, and including with respect
to those sources of financing disclosed pursuant to Section 5.7.

            7.5  Grant  any  lien  on or  security  interest  in,  or  otherwise
encumber,  any of its  properties or assets,  except for liens for taxes not yet
due and  payable  or  which  are  being  actively  contested  in good  faith  by
appropriate  proceedings and for which adequate reserves are being maintained by
Borrower and those liens disclosed to Lender by Borrower in writing prior to the
execution of this Agreement,  and including those sources of financing disclosed
pursuant to Section 5.7,  Borrower shall not permit to exist any lien,  security
interest or other encumbrance on any of the Collateral.

      8. EVENTS OF DEFAULT.  Borrower will be deemed to be in default (an "Event
of Default") if (a) any principal,  interest or other monetary sum due under the
Note is not paid within  five days from the date when due and Lender  shall have
given notice of such  failure to Borrower  and such failure  shall not have been
cured by Borrower  within fifteen (15) days from the delivery of such notice (an
"Event of  Default");  (b)  Borrower  materially  breaches  any  representation,
warranty or covenant  contained in this  Agreement and fails to cure such breach
within  thirty (30) days from  delivery of notice of such  breach;  (c) Borrower
fails to pay when due any  payment of  principal  or  interest  due on any other
obligation  for money borrowed in excess of $5,000,  and such default  continues
beyond any grace  period;  (d) Any judgment or order for the payment of money in
excess of $10,000.00,  is entered against Borrower, unless the same shall be (i)
fully  covered by insurance and the issuer of the  applicable  policy shall have
acknowledged  full coverage in writing  within thirty (30) days of judgment,  or
(ii) vacated,  stayed, bonded, paid or discharged within a period of thirty (30)
days from the date of such  judgment or order;  (e) Borrower or Guarantor  shall
take  any  action  to make  an  assignment  for the  benefit  of  creditors,  or
petitioning or taking any action to petition any tribunal for the appointment of
a custodian, receiver or any trustee for it or a substantial part of its assets,
or  commencing  or  taking  any  action to  commence  any  proceeding  under any
bankruptcy,  reorganization,  arrangement,  readjustment  of debt,  dissolution,
liquidation or debtor relief law or statute of any jurisdiction,  whether now or
hereafter in effect, including,  without limitation,  any chapter of the federal
Bankruptcy  Code;  or, if there  shall  have  been  filed or  commenced  against
Borrower or Guarantor any such petition,  application or proceeding which is not
dismissed within sixty (60) days or in which an order for relief is entered;  or
should Borrower or Guarantor by any act or omission  indicate its approval of or
acquiescence in any such petition, application or proceeding or order for relief
or  the  appointment  of a  custodian,  receiver  or any  trustee  for it or any


                                      -4-
<PAGE>


substantial  part of any of its  properties;  or should  Borrower  or  Guarantor
suffer  to exist  any  such  custodianship,  receivership  or  trusteeship;  (f)
Borrower or Guarantor conceals,  removes, or permits to be concealed or removed,
any part of its property,  with intent to hinder, delay or defraud its creditors
or any of them,  or making or suffering a transfer of any of its property  which
may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
making any  transfer  of its  property  to or for the benefit of a creditor at a
time when other creditors similarly situated have not been paid, or suffering or
permitting,  while  insolvent,  any  creditor  to  obtain a lien upon any of its
property  through legal  proceedings or distraint which is not vacated within 30
days after the date thereof; or (g) the dissolution,  cessation of business,  or
insolvency of Borrower or Guarantor.

      9. REMEDIES OF LENDER UPON DEFAULT. Upon an Event of Default,  Lender will
have,  in  addition to its rights and  remedies  under the Note,  full  recourse
against any assets of Borrower,  and may pursue any legal or equitable  remedies
that are available to Lender, and may declare the entire unpaid principal amount
of this Note and all unpaid  accrued  interest  under the Note to be immediately
due and payable in full.

      10.  WAIVER.  Any waiver of any of the terms of this  Agreement  by Lender
shall not be construed as a waiver of any other terms of this Agreement,  and no
waiver  shall be  effective  unless  made in  writing.  The failure of Lender to
exercise any right with respect to the  declaration  of any default shall not be
deemed or  construed  to  constitute  a waiver by, or to  preclude  Lender  from
exercising  any right  with  respect  to such  default  at a later  date or with
respect to any subsequent default by Borrower.

      11. NOTICES. Any notices required or permitted to be given pursuant to any
of the Loan  Documents  shall be in writing and shall be deemed given (i) in the
case of personal delivery or delivery by telecopy, on the date of such delivery,
or (ii) in the case of dispatch by international overnight courier, two business
days following such  dispatch,  to the address or facsimile  number set forth in
Section 12.3 hereof.  If either party desires to change the address or facsimile
number to which notices are to be sent it shall do so in writing and deliver the
same to the other  party in  accordance  with the  notice  provisions  set forth
above.

      12.   MISCELLANEOUS.

            12.1 PARTIES.  This Agreement is made solely among Borrower,  Lender
and UCAP,  and no other  person  shall have any right of action  hereunder.  The
parties  expressly  agree that no person shall be a third-party  beneficiary  to
this Agreement.

            12.2 PERSONS AUTHORIZED TO REQUEST ADVANCES FROM LENDER:

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

            Or such other  persons  as may be  evidenced  by written  notice and
accompanied  by an  incumbency  certificate  from the Borrower  reflecting  such
persons authority to make such requests from time tot time.

            12.3  ADDRESSES  FOR NOTICES:  All notices,  requests,  consents and
other  communications  hereunder  shall be in writing and shall be  delivered in
person,  mailed by certified or registered mail,  return receipt  requested,  or
sent by telecopier  or  recognized  overnight  courier  service,  to the address
listed below or at such other address or addresses as shall have been  furnished
in writing by such party:


                                      -5-
<PAGE>


           (a)      if to the Borrower:      United Capital Mortgage Corporation
                                             14001 East Iliff Avenue, Suite 701
                                             Denver, CO 80014
                                             Facsimile: (303) 696-6369
                                             Attn: _______________________


           (b)                               if to the  Lender:
                                             Absolute    Return
                                             Europe Fund, Ltd.

                                             Facsimile:
                                                        -----------------------
                                             Attn:
                                                   ----------------------------

                                             Mr. Florian Homm
                                             C'an Girasol
                                             Cami de Sarria 63
                                             07010 Establiments
                                             Palma de Mallorca, Spain

            12.4  ENTIRE  AGREEMENT.  This  Agreement,  the  Note,  and the Loan
Documents  constitute the entire agreement and  understanding  among the parties
with  respect  to  the  subject   matter   thereof  and   supersede   any  prior
understandings or agreements of the parties with respect to such subject matter.

            12.5 ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties  hereto and their  respective  successors  and assigns;
provided,  however,  that neither this  Agreement nor any rights or  obligations
hereunder  shall be  assignable  by Borrower by  operations of law or otherwise,
without  the  prior  express  written  consent  of  Lender,  and  any  purported
assignment made in contravention hereof shall be void.

            12.6  GOVERNING  LAW. This  Agreement and each of the Loan Documents
shall be construed in  accordance  with and governed by the laws of the State of
Colorado.

            12.7 TIME. Time is of the essence hereof.

            12.8 TERMINATION.  Borrower may terminate this Agreement at any time
by written notice to Lender accompanied with payment of all accrued interest and
outstanding principal.

            12.9 SEVERABILITY. If any term or provision of this Agreement or any
other Loan Document,  or the application  thereof to any circumstance,  shall be
invalid,  illegal or unenforceable  to any extent,  such term or provision shall
not  invalidate  or render  unenforceable  any other term or  provision  of this
Agreement  or any  other  Loan  Document,  or the  application  of such  term or
provision to any other circumstance. To the extent permitted by law, the parties
hereto  hereby  waive any  provision  of law that  renders any term or provision
hereof invalid or unenforceable in any respect.



                  [Remainder of page intentionally left blank]



                                      -6-
<PAGE>



         IN WITNESS WHEREOF,  the parties have executed this Agreement effective
as of the date first written above.

                    BORROWER:

                    United Capital Mortgage Corporation, an Arkansas corporation


                    By: /s/ Colleen Brewer
                       -------------------------------
                    Name: Colleen Brewer
                    Its: Investment Advisor, Principal




                    LENDER:

                    Absolute Return Europe Fund, Ltd.


                    By: /s/ Florian Homm
                       -------------------------------
                    Name: Florian Homm
                    Its: Investment Advisor, Principal



                    /s/ Florian Homm
                    -----------------------------------
                    Florian Homm, Individually



Acknowledged and Agreed
for purposes of Articles 3 & 4

UCAP Incorporated, a Colorado corporation

By: /s/ Colleen Brewer
   -------------------
Name: Colleen Brewer
Its: Chief Financial Officer



</TEXT>
</DOCUMENT>
