Document:

<PAGE>

                                                                 EXHIBIT (10)(i)

STEPHEN E. ROTH

DIRECT LINE: (202) 383-0158

Internet: sroth@sablaw.com

                                October 31, 2001

VIA EDGAR TRANSMISSION
----------------------

Board of Directors
GE Capital Life Assurance
 Company of New York
125 Park Avenue, 6th Floor
New York, NY 10017-5529

          Re:   GE Capital Life Separate Account II
                -----------------------------------

Ladies and Gentlemen:

          We hereby consent to the reference to our name under the caption
"Legal Matters" in the Statement of Additional Information filed as part of
Post-Effective Amendment No. 3 to the Registration Statement on Form N-4 filed
by GE Capital Life Separate Account II for certain flexible premium variable
deferred annuity contracts (File No. 333-47016).  In giving this consent, we do
not admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.

                              Very truly yours,

                              SUTHERLAND ASBILL & BRENNAN LLP

                              By: /s/ Stephen E. Roth
                                  -------------------
                                  Stephen E. Roth<PAGE>

                                                                 EXHIBIT 10(ii)

Consent of Independent Auditors

The Board of Directors
GE Capital Life Assurance Company of New York
  and
Contractholders
GE Capital Life Separate Account II:

We consent to the use of our reports included herein and to the reference to our
firm under the heading "Experts" in the Statement of Additional Information.

Our report covering the December 31, 2000 financial statements of GE Capital
Life Assurance Company of New York dated January 22, 2001, except for Note 15
which is as of June 28, 2001, contains an explanatory paragraph that states that
the balance sheet of GE Capital Life Assurance Company of New York as of
December 31, 2000 and the related statement of shareholder's interest for the
year then ended have been restated.

/s/ KPMG LLP

Richmond, Virginia
November 2, 2001EXHIBIT 4.1

                         ____________________________

                             P R O S P E C T U S
                         ____________________________

                       UNITED FINANCIAL MORTGAGE CORP.

                NON-QUALIFIED AND INCENTIVE STOCK OPTION PLAN

      This document  constitutes  part of  a  prospectus covering  shares  of
 common stock registered under  the Securities Act of  1933, as amended  (the
 "Act").

      This  document  (referred  to  herein  as  the  Prospectus)  and  other
 documents discussed  below  constitute  a prospectus  which  is  part  of  a
 registration statement on Form S-8 covering  500,000 shares of common  stock
 issuable under the Non-Qualified and Incentive Stock Option Plan ("Plan") of
 United Financial Mortgage Corp., an Illinois corporation ("Company").

      You, as an employee,  officer or employee  or non-employee director  of
 the Company, have been awarded an option to purchase shares of the Company's
 common stock under the Plan as  incentive compensation.  The purpose of this
 Prospectus is  to briefly  describe the  Plan's operation,  your rights  and
 responsibilities, and some general federal tax consequences, in relation  to
 this award of a stock option(s).  The options awarded to you under the  Plan
 are sometimes referred to herein as the " Options".

      No person has been authorized by the Company to give any information or
 to make any representation other than  as contained in this Prospectus,  and
 if given or made, such information or representation must not be relied upon
 by you as  having been authorized  by the Company.  Neither the delivery  of
 this Prospectus nor the issuance and delivery of Shares to you shall,  under
 any circumstances, create any implication that  there has been no change  in
 the Company's affairs  since the date  of this  Prospectus. This  Prospectus
 speaks only as of its date.

      NEITHER THE OPTION NOR THE SHARES THAT MAY BE ACQUIRED UPON EXERCISE OF
 AN OPTION(S)  HAVE  BEEN  APPROVED OR  DISAPPROVED  BY  THE  SECURITIES  AND
 EXCHANGE COMMISSION,  NOR HAS  THE COMMISSION  PASSED UPON  THE ACCURACY  OR
 ADEQUACY OF  THIS  PROSPECTUS.  ANY REPRESENTATION  TO  THE  CONTRARY  IS  A
 CRIMINAL OFFENSE.

      This Prospectus does not constitute an offer to sell securities in  any
 state or in any other jurisdiction to any  person to whom it is unlawful  to
 make such an offer in such state or other jurisdiction.

                           DESCRIPTION OF THE PLAN

      A maximum of 500,000 shares of the Company's common stock are  issuable
 under the terms of  the Plan. The Board  of Directors ("Board") has  adopted
 the Plan in order  to provide a  further means to  support and increase  the
 Company's ability to  attract, retain and  compensate persons of  experience
 and ability and  whose services are  considered valuable,  to encourage  the
 sense of  proprietorship  in  such persons,  and  to  stimulate  the  active
 interest of such persons in the development and success of the Company.  The
 Plan provides for grants of options to salaried officers, key employees  and
 employee and  non-employee directors.  The following  is  a summary  of  the
 material provisions of the Plan and is qualified in its entirety by  express
 reference to the text of the Plan, a copy of which is available upon oral or
 written request from  the Company at  United Financial  Mortgage Corp.,  600
 Enterprise Drive, Suite 206, Oak Brook, Illinois 60523 Attn: Steve Khoshabe,
 Executive Vice President.

                  This Prospectus is dated November 2, 2001

<PAGE>

 Administration

      The Plan provides for its administration by the Board or a Stock Option
 Committee ("Committee").  The  Committee  and the  Board  has  discretionary
 authority (subject to certain restrictions) to determine the individuals  to
 whom and the times at which  option will be granted  under the Plan and  the
 number of shares granted. The Committee and the Board may interpret the Plan
 and may prescribe, amend and rescind rules and regulations relating thereto.

 Eligibility

      The options  may  be awarded  to  the following  persons:  (I)  persons
 employed by the Company or an affiliated corporation in key capacities;  and
 (ii) officers and any director of the Company.

 Termination and Amendment

      No options may be awarded under  the Plan after December 31, 2003.  The
 Plan may  be  amended  consistent  with  applicable  laws  and  regulations,
 suspended or terminated at  any time by the  Board, subject to  shareholders
 approval,  or  by  the exercise  of  all  outstanding options.   Subject  to
 shareholder approval,  the Board  may increase  or  decrease the  number  of
 Shares subject to the Plan.

 Delivery of Stock Certificates

      As promptly as practicable after authorizing an award of an option (s),
 the Company will deliver to the person who is the recipient of the award, an
 award agreement specifying the terms of the option, including the number  of
 shares subject to the option;  and the term of  the option and the  purchase
 price of a share under the option.

 Assignability

      An option may not be assigned. The shares purchased upon exercise of an
 option may  be  assigned  only  after  such  shares  have  been  issued  and
 delivered, and only  in accordance with  law and  any transfer  restrictions
 imposed at the time of award.

 Employment not Conferred

      Nothing in the Plan or in the award of an option shall confer upon  any
 employee the right to continue in the employ of the Company or an affiliated
 corporation nor shall it  interfere with or restrict  in any way the  lawful
 rights of  the  Company  or any  affiliated  corporation  to  discharge  any
 Employee at any time for any reason whatsoever, with or without cause.

 Laws and Regulations

      The obligation of the Company to issue and deliver shares following the
 exercise of  an  option granted  under  the Plan  shall  be subject  to  the
 condition that the Company is satisfied  that the sale and delivery  thereof
 will not violate the Act or any other applicable laws, rules or regulations.

 Discretion as to Awards

      The Stock Option Committee and/or the Board has absolute discretion  to
 determine when and to whom   awards under the Plan are  to be made, and  the
 number of shares purchasable  upon exercise of the  option. No person  shall
 have any tacit or other right to an award  of an option unless and until  an
 explicit award under the Plan has been made.

 Nature of the Plan

      The Plan is strictly compensatory in nature and is not in the nature of
 a  savings,   dividend  reinvestment,   profit-sharing  or   pension   plan.
 Accordingly, the Plan has no assets or funds to be administered or  invested
 by its administrators.  Please note that  you do not  and will  not own  any
 interest of any kind in the Plan itself.

                                    - 2 -
<PAGE>

 Nature of the Award

      The option has been issued to you as incentive compensation for and  in
 recognition of services.

                             CERTAIN TAX MATTERS

 ERISA Applicability

      The Plan,  and the  options awarded  to  you, are  not subject  to  the
 Employee Retirement Income Security Act of 1974, as amended.

 Federal Income Tax Consequences

      The Company believes that you will  not recognize ordinary income  upon
 receipt of an option award to you.

      Upon exercise  of  the  option  your  basis,  for  federal  income  tax
 purposes, in the shares will generally be equal to the purchase price of the
 shares at the time of option exercise. Upon disposition of those shares, you
 will realize a capital gain (or  loss) equal to the difference between  your
 tax basis and the amount realized upon disposition. Your tax basis in  these
 shares and the  amount of income  you will recognize  upon the  sale of  the
 shares may be based upon or affected by other factors.

      The Plan is not qualified under Section 401(a) of the Internal  Revenue
 Code of 1986, as amended.

      The foregoing  summary of  federal income  tax  aspects is  subject  to
 change.  Moreover, federal income tax laws  are quite complex, and the facts
 of your personal situation (or other facts in connection with the award) may
 create a different  federal tax  result for  you.  The Company is  not in  a
 position to advise  you as to  possible federal taxation  issues other  than
 income tax or as to state, county or other local city taxes. You are advised
 to consult your own accountant, attorney  or other tax advisor.  The Company
 and its  personnel cannot  advise you  as  to state,  federal or  local  tax
 consequences beyond the general discussion above.

 Federal Income Tax Withholding

      If subject  to  withholding  tax, the  Company  may  require  that  the
 employee concurrently pay to the Company  the entire amount or a portion  of
 any taxes  which the  Company is  required  to withhold  by reason  of  your
 exercise an option  under the Plan,  in such amount  as the  Company in  its
 discretion may  determine.  If the Company  becomes  required to  pay  with-
 holding taxes to any federal, state or other taxing authority as a result of
 the granting of an award  of common stock under  the Plan, and the  employee
 fails to  provide  the  Company  with  the funds  with  which  to  pay  that
 withholding tax,  the Company  may withhold  up to  50% of  each payment  of
 salary, bonus or other compensation payable  to the employee (which will  be
 in addition to any required or permitted withholding), until the Company has
 been reimbursed for  the entire withholding  tax it was  required to pay  in
 respect of issuance of any shares awarded under the Plan.

                          DESCRIPTION OF SECURITIES

      The authorized  capital stock  of the  Company consists  of  20,000,000
 shares of Common  Stock, no  par value per  share, and  5,000,000 shares  of
 Preferred Stock, no par value.

      Common Stock

      The holders of  Common Stock  are entitled to  one vote  per share.  No
 cumulative voting  is required  or permitted.  Therefore, the  holders of  a
 majority of  shares voting  for  the election  of  directors can  elect  all
 directors, and  the  remaining  holders  will  not  be  able  to  elect  any
 directors.

      Holders of Common Stock are entitled to receive such dividends, if any,
 as the Board  may from time  to time declare  out of funds  the Company  has
 legally available for the payment of dividends. Holders of the Common  Stock
 are entitled  to  share  pro rata  in  any  dividends declared.  It  is  not
 anticipated that dividends will be paid in the near future. Future  dividend
 policy will  depend upon  conditions existing  at that  time, including  the
 Company's earnings and financial condition.

                                    - 3 -
<PAGE>

      Upon liquidation,  dissolution or  winding-up  of the  Company,  Common
 Stock stockholders are entitled to receive pro rata all of the assets of the
 Company available  for distribution  to  stockholders. Stockholders  of  the
 Company do not have  preemptive rights or other  rights to subscribe for  or
 purchase any stock,  options, warrants or  other securities  offered by  the
 Company.

      Preferred Stock

      The Articles of Incorporation  of the Company  authorizes its Board  of
 Directors to issue up to 5,000,000 shares of Preferred Stock in one or  more
 series and  to  fix  the  designations,  preferences,  powers  and  relative
 participating, optional and  other rights,  qualifications, limitations  and
 restrictions thereof, including the dividend rate, conversion rights, voting
 rights, redemption rights and liquidation preference, and to fix the  number
 of shares to be included  in any such series.  The Preferred Stock may  rank
 superior to the  common stock with  respect to the  payment of dividends  or
 amounts upon liquidation, dissolution or  winding-up, or both. In  addition,
 any such shares of Preferred Stock may have class or series voting rights.

      Series A Preferred Stock

      The Company has  sixty-three (63)  shares of  shares of  Series A  Non-
 voting Preferred Stock ("Preferred Stock"), outstanding, all of which shares
 are registered in  the name of  the J.K. Trust  which is  controlled by  Mr.
 Joseph Khoshabe, the Company's president. All such shares of Preferred Stock
 are registered in the name of the J. K. Trust. The Shares of Preferred Stock
 were purchased for a total consideration of $5,000 per share. The holders of
 Preferred Stock are entitled to receive variable dividends as determined  by
 the Board of Directors from time to time; and do not have voting rights. The
 amount of the variable  dividend is determined solely  at the discretion  of
 the Company's Board of Directors.

      The terms of  the Preferred Stock  additionally provide  that upon  any
 liquidation, dissolution  or  winding-up  of the  affairs  of  the  Company,
 whether voluntarily or involuntarily, after payment or provision for payment
 of debts and other  liabilities of the Company,  the holder(s) of shares  of
 Preferred stock shall  be entitled to  receive from the  Company $5,000  per
 share,  from  the  remaining  net  assets  of  the  Corporation  before  any
 distribution is made with respect to the Common Stock. The liquidation value
 for the Preferred Stock is $5,000 per share.

       The Company's bylaws provide  for a board of  not less than three  and
 not more than nine directors, all of whom are elected for one-year terms  at
 the annual meeting of  shareholders. The affirmative vote  of a majority  of
 all the  outstanding  shares entitled  to  vote  is necessary  to  remove  a
 director. A special meeting of shareholders may be called by the  President,
 Secretary, or a majority of the Board of Directors. Holders of Common  Stock
 are entitled to receive, pro rata, dividends if, when and as declared by the
 Board of Directors out of funds  legally available therefor, subject to  the
 rights of the holders of Preferred  Stock. Upon liquidation, dissolution  or
 winding up of  the Company, holders  of Common Stock  are entitled to  share
 ratably in the Company's  assets legally available  for distribution to  its
 shareholders, subject to the  rights of the holders  of the Preferred  Stock
 and  any  other  then  outstanding  series  of  preferred  stock  having   a
 liquidation preference over the  Common Stock. The  Award Shares will,  when
 issued in accordance with the Plan, be fully paid and nonassessable.

 Transfer Agent

      Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive, Suite 430,
 Denver, Colorado 80209-4614, acts as transfer agent and registrar for the
 Common Stock of the Company.  Its telephone number is (303) 282-4800.

                               DIVIDEND POLICY

      The declaration and  payment of dividends  on Common Shares  is at  the
 absolute discretion of  the Company's Board  of Directors  and will  depend,
 among other  things,  on the  Company's  earnings, financial  condition  and
 capital requirements. The Company has not  paid any cash dividends to  date,
 and no cash dividends will be declared or  paid on the Common Shares in  the
 foreseeable future.

                                    - 4 -
<PAGE>

                     TRANSFERABILITY OF THE AWARD SHARES

 Generally

      The shares proposed  to be issued  to you upon  exercise of the  option
 under the Plan are  expected to be  registered under the  1933 Act with  the
 U.S. Securities and  Exchange Commission  ("Commission"), under  cover of  a
 registration statement on Form S-8 of the Commission. Upon completion of the
 registration, about which you will be notified by the Company, the shares of
 stock awarded to you will not be "restricted" and, generally, will be freely
 transferable by you (whether in an  open market transaction or in a  private
 transaction)  under  the  Act  without  need  of  further  registration   or
 compliance with any exemption from registration under the Act.  Accordingly,
 the certificate evidencing  the shares is  not expected to  bear any  legend
 restricting transfer.  Special  rules  regarding  transferability  of  these
 shares may apply to you, however, if you are an "affiliate" of the  Company.
 See "Applicability of Rule 144" below.

 Applicability of Rule 144

      Special rules  will apply  to you  if  you are  an "affiliate"  of  the
 Company, or of any parent or subsidiary of the Company, and in that event  a
 special legend  may  be placed  on  the certificate  evidencing  the  shares
 awarded to you. If you are an "affiliate,"  you may be required to sell  the
 shares of  stock pursuant  to an  effective  registration statement,  or  in
 compliance with the provisions of Rule 144 of the Commission (except for the
 holding period requirement),  including the filing  of a Form  144 with  the
 Commission prior to sale,  or pursuant to  another available exemption  from
 registration. In general, Rule  144 as currently in  effect would allow  any
 affiliate (defined below) of the Company to publicly sell, within any three-
 month period, common shares of the Company in a number equal to the  greater
 of (i) 1% of  the total number of  the Company's common  shares of the  same
 class then  outstanding,  or (ii)  the  average weekly  reported  volume  of
 trading in  the  Company's common  shares  during the  four  calendar  weeks
 immediately preceding the sale.  Sales made in reliance  upon Rule 144  also
 are subject to certain manner-of-sale and the availability of current public
 information provisions concerning the Company.

      An "affiliate" of the Company is defined as any person who controls, is
 controlled by, or is under common control with the Company. Persons who  are
 directors or  executive  officers  of  the Company,  or  of  any  parent  or
 subsidiary of the Company, and persons  who beneficially own 10% or more  of
 the outstanding common stock of the Company  or  of any parent or subsidiary
 of the Company, will be presumed to be affiliates.

      An affiliate's failure to comply with  the provisions of Rule 144 is  a
 serious violation of law. If you are an affiliate of the Company, you should
 consult with the Secretary of or counsel to the Company prior to making  any
 sale of these shares. See also "Liability for Short-Swing Sales" below.

                           AVAILABILITY OF FORM S-8

      The rules and regulations of the Commission make Form S-8 available  to
 issuers only for the issuance of securities which are compensatory in nature
 and which are issued pursuant to an "employee benefit plan" (defined in Rule
 405  of  Regulation  C  of  the  Commission  to  include  various  types  of
 compensatory  plans  and  written  compensation  agreements)  to  compensate
 persons who are employees of the Company or an affiliate of the Company. The
 term "employee" generally includes employees, officers, and directors of the
 Company or an affiliate of the Company.

      These rules and regulations  prohibit the use of  Form S-8 to  register
 securities if the issuance of the securities is in connection with the offer
 or sale of  securities in  a capital-raising  transaction. Accordingly,  the
 issuance of  the award  shares to  you would  be improper  if the  award  is
 intended as compensation  for raising or  helping to raise  capital for  the
 Company by the  offer or sale  of securities, even  if you  are a  full-time
 employee of  the  Company with  other,  regular duties  unconnected  to  the
 raising of capital.  Accordingly, if you  have any  question concerning  the
 nature of the  services for which  an option has  been awarded  to you,  you
 should consult the Secretary of or counsel to the Company.

                                    - 5 -
<PAGE>

                    STOCK OWNERSHIP REPORTING REQUIREMENTS

      If you are  an executive  officer or director  of the  Company, or  the
 beneficial owner of 10% or more of the Company's outstanding common stock (a
 "Section 16(a) reporting person"), you are required by Section 16(a) of  the
 Securities Exchange Act of 1934, as amended ("Exchange Act"), and the  rules
 of the Commission  thereunder, to file  with the Commission  a statement  of
 changes of  beneficial ownership  of securities  on Form  4 to  reflect  the
 issuance of the award shares to you. This report must be filed no later than
 the 10th day of the month following the month in which the award shares were
 granted and  issued to  you. Your  failure to  timely file  this report,  if
 required, could subject you to fines or penalties under the Exchange Act and
 may result  in disclosure  of your  failure to  so report  in the  Company's
 annual report  on Form  10-KSB to  be filed  with the  Commission and  proxy
 statement. If  you recently  became an  executive officer,  director or  10%
 shareholder of  the Company  and have  not yet  filed an  initial report  of
 beneficial ownership of securities report on Form 3, then this filing should
 be promptly made (it must be filed within 10 days of the triggering  event).
 Finally, if you are a Section 16(a) reporting person, you may be required to
 file, within  45  days of  the  Company's  accounting year  end,  an  annual
 statement of beneficial ownership  of securities on  Form 5 reflecting  this
 award.

      You should consult with the Secretary  of or counsel to the Company  if
 you are unsure as to your reporting obligations under Section 16(a) and  the
 rules of the Commission.

                       LIABILITY FOR SHORT-SWING SALES

      If you are a  Section 16(a) reporting person,  you also are subject  to
 the "short-swing" sales provisions of Section 16(b) of the Exchange Act  and
 rules and regulations of  the Commission thereunder,  and the discussion  in
 this paragraph  applies to  you. The  issuance of  the award  shares to  you
 probably will constitute a "purchase" of  those shares by you under  Section
 16(b), unless the award is  purely a bonus (such  as a Christmas bonus)  and
 not intended  as compensation  for services  rendered or  in lieu  of  other
 earned compensation due.  If you  are a  Section 16(a)  reporting person,  a
 report on Form 4 concerning the award may be due, even though no  "purchase"
 has occurred for short-swing purposes.

      Section 16(b) and  the Commission's rules  thereunder provide that  any
 sale of the Company's common stock by you within the 6-month period prior to
 or following  the award  of shares  to  you, at  a  price greater  than  the
 "purchase" price of  the awarded shares,  results in  an illegal  (so-called
 "short swing") profit to you.  The "purchase price" of the award shares will
 for almost all purposes be the fair market  value of the shares on the  date
 of award. A  short-swing profit  is recoverable by  the Company  in a  legal
 action within two years after the  illegal profit is realized, which may  be
 brought in federal court.  The Company also would be entitled to recover its
 reasonable  legal  fees  incurred  in  recovering  the  short-swing  profit.
 Moreover, any shareholder of  the Company may bring  an action to recover  a
 short-swing profit,  if the  Company does  not, and  likewise recover  legal
 fees.

      You are urged to consult the Company Secretary or your own attorney  if
 you are unsure whether  Section 16(b) applies to  you and to determine  your
 compliance with Section 16(b), if it is applicable to you.

                        INFORMATION AND OTHER MATTERS

 Additional Information

      The Company  is  subject  to the  periodic  reporting  requirements  of
 Section 13(a)  of the  Exchange Act,  and  pursuant thereto  files  periodic
 reports and  other information  with the  Commission as  a "small  business"
 issuer pursuant  to Regulation  S-B of  the  Commission.  Reports and  other
 information so  filed by  the Company  can be  inspected and  copied at  the
 public reference facilities maintained by the Commission at 450 Fifth Street
 N.W., Judiciary Plaza, Washington, D.C. 20549.  Copies of such material  may
 be obtained from  Public Reference Section  of the Commission's  Washington,
 D.C. office  at  prescribed  rates.  This  information  is  in  addition  to
 information which may be requested orally or in writing from the Company  at
 no charge to you (see below).

 Market Information

      The Common Stock of the Company is traded on the Chicago Stock Exchange
 under the symbol "UFM".  On October 24, 2001, the closing bid and ask prices
 for the Common Stock were $1.63 and $2.00, respectively.

                                    - 6 -
<PAGE>

 Fees and Expenses of Registration

      All fees  and expenses,  including legal  fees and  registration  fees,
 incurred in connection with  the creation of the  Plan, preparation  of this
 document and  preparation  and filing  of  the registration  statement,  and
 issuance and delivery of the award shares, have been or will be paid  by the
 Company.

 Updating of Prospectus

      This Prospectus  will by  law be  deemed automatically  updated by  the
 Company's filing of Exchange Act reports  (including annual reports on  Form
 10-KSB, quarterly reports on Form 10-QSB,  current reports on Form 8-K,  and
 annual reports to shareholders)  with the Commission,  and all such  reports
 will be automatically incorporated by reference  in this Prospectus and  the
 Company's registration statement on  Form S-8 covering  the Plan and  common
 shares issuable thereunder.

 Incorporation by Reference

      The following documents are deemed to  be incorporated by reference  in
 this Prospectus and in the Company's registration statement on Form S-8  and
 are available upon oral or written request from the Secretary of the Company
 at the address set forth below:

      The Company's Annual Reports on Form 10-KSB.

      The Company's Quarterly Reports on Form 10-QSB.

      The Company's Current Reports on Form 8-K.

 Documents Attached to this Prospectus

      In accordance  with Rule  428(b)(2) of  the Commission,  the  following
 document or  documents  are  attached  to  this  Prospectus  and  are  being
 delivered to every person receiving a copy of this Prospectus:

      The Company's Annual Report  on Form 10-KSB, for  the year ended  April
           30, 2001, filed with the Commission on July 31, 2001.

      The Company's  Quarterly  Report on  Form  10-QSB, for  the  quarterly
           periods ended July  31, 2001 filed  with the commission  September
           14, 2001.

      A copy of the Non-Qualified and Incentive Stock Option Plan.

 Where to Request More Information

      Additional information, including a copy of  the Plan and of  documents
 listed above which have been incorporated  by reference in this  Prospectus,
 may be requested orally or in writing from the Company by calling or writing
 to the Secretary  of the Company  at the following  address: 600  Enterprise
 Drive, Suite 206. Oak Brook, Illinois 60523. The Company's telephone  number
 there is (630) 571-7222, and its  facsimile (fax) number is (630)  571-2623.
 Such information  will be  sent to  you promptly  upon request  and  without
 charge to you.

               E N D   OF   P R O S P E C T U S   T E X T

               This Prospectus speaks only as of its date.
     Any material changes to the information presented above will be
   contained in one or more supplements accompanying this Prospectus.

                                    - 7 -
<PAGE>

                         NON-QUALIFIED AND INCENTIVE
                              STOCK OPTION PLAN
                                      OF
                       UNITED FINANCIAL MORTGAGE CORP.

 1.  Purpose of the Plan.  This Non-Qualified and Incentive Stock Option Plan
 of United Financial Mortgage Corp., an Illinois corporation (the  "Company")
 as adopted on  this 15th day  of December, and  as subsequently amended,  is
 intended to encourage officers, key employees  and non-employee directors of
 the Company to acquire  or increase their ownership  of common stock of  the
 Company on  reasonable terms.  The opportunity  so provided  is intended  to
 foster in participants a  strong incentive to put  forth maximum effort  for
 the continued  success  and  growth  of the  Company  to  aid  in  retaining
 individuals who put forth such efforts and to assist in attracting the  best
 available individuals to the Company in the future.

 2.   Definitions.   When used  herein, the  following terms  shall have  the
 meaning set forth below:

 2.1  "Affiliate"  means, with  respect to  any specified  person or  entity,
 person  or  entity  that  directly  or  indirectly,  through  one  or   more
 intermediaries, controls, or is  controlled by, or  is under common  control
 with, the person or entity specified.

 2.2  "Award" means an Option.

 2.3  "Award Agreement"  means a written  agreement in such  form as may  be,
 from time to time, hereafter approved  by the Committee or the Board,  which
 shall be duly executed by the Company  and the Employee and which shall  set
 forth the terms and conditions of an Award under the Plan.

 2.4  "Board" means the Board of Directors of the Company.

 2.5  "Code" means  the Internal Revenue code  of 1986, as  in effect at  the
 time of reference,  or any  successor revenue  code which  may hereafter  be
 adopted in lieu  thereof, and reference  to any specific  provisions of  the
 Code shall  refer to  the corresponding  provisions of  the Code  as it  may
 hereafter be amended or replaced.

 2.6  "Committee" means the Stock Option Committee of the Board or any  other
 committee appointed by  the Board whose  members meet  the requirements  for
 eligibility to serve, set forth in Section 4, which is invested by the Board
 with responsibility for the administration of the Plan.

 2.7   "Company" means United Financial Mortgage Corp.

 2.8   "Employees" means officers (including officers who are members of  the
 Board), non-employee members  of the Board  and other key  employees of  the
 Company.

 2.9  "Fair Market Value" with respect to the Company's Shares means: (i) for
 options granted on or before the effective day of any Registration Statement
 the Company may file with the  Securities and Exchange Commission an  amount
 based on an average of fair market value as  of the date of grant set  forth
 in the opinion of such independent  well-qualified experts as the  Committee
 or the Board  may from time  to time select;  and (ii)  for options  granted
 thereafter, the closing price of the  Shares on the last business day  prior
 to the date of grant on  which transactions in Shares occurred, as  reported
 on such source of quotation for,  or reports of, trading activity in  Shares
 as the Committee or the Board may from time to time select.

 2.10  "Incentive Stock Option" means an Option meeting the requirements and
 containing the limitations and restrictions set forth in Section 422A of the
 Code.

 2.11  "Non-Qualified Stock Option" means  an Option other than an  Incentive
 Stock Option.

 2.12  "Option" means the right to purchase, at a price and for a term  fixed
 by the Committee or the  Board in accordance with  the Plan, and subject  to
 such other limitations and restrictions as the Plan and the Committee or the
 Board impose, and  the number of  Shares specified by  the Committee or  the
 Board.

                                    - 1 -
<PAGE>

 2.13  "Parent" means any corporation (other than the Company) in an unbroken
 chain of  corporations  ending with  the  Company if,  at  the time  of  the
 granting of the option, each of the corporations other than the Company owns
 stock possessing fifty percent  (50%) or more of  the total combined  voting
 power of all  classes of  stock in  one of  the other  corporations in  such
 chain.

 2.14  "Plan" means  the Company's Non-Qualified  and Incentive Stock  Option
 Plan.

 2.15  "Shares" means shares of the  Company's no par value common stock,  or
 if by reason of the adjustment  provisions hereof any rights under an  Award
 under the Plan pertaining to any other security, such other security.

 2.16   "Subsidiary" means  any  corporation other  than  the Company  in  an
 unbroken chain of  corporations beginning with  the Company if  each of  the
 corporations other  than the  last corporation  in the  unbroken chain  owns
 stock possessing fifty percent  (50%) or more of  the total combined  voting
 power of all  classes of  stock in  one of  the other  corporations in  such
 chain.

 2.17  "Successor" means the legal representative of the estate of a deceased
 Employee or the persons who shall acquire the right to exercise an Award  by
 bequest or inheritance or by reason of  the death of the Employee.

 2.18   "Term"  means the  period  during which  a  particular Award  may  be
 exercised.

 3.  Stock Subject  to  the Plan.  There will be  reserved for use, upon  the
 exercise  of Awards  to  be granted  from  time  to timeunder  the  Plan, an
 aggregate of 500,000  Shares, which Shares may  be, in whole  or in part, as
 the Board shall from time to time determine, authorized but unissued Shares,
 or issued Shares which shall have been reacquired by the Company. Any Shares
 subject  to issuance  upon  exercise of  Options  but which  are  not issued
 because of a surrender, lapse,  expiration or termination of any such Option
 prior to issuance of  the Shares shall once  again be available for issuance
 in satisfaction of Awards.

 4.  Administration  of the  Plan.  The  Board shall  appoint the  Committee,
 which shall consist of not less than  twomembers of the Board. Except as the
 Board may  determine with respect  to non-employee members  of the Board who
 are to become grantees  of Awards, no member of  the Board shall be eligible
 to serve or  continue to serve on  the Committee if, at  the time, or at any
 time during the  twelve months preceding commencement  of his service, he is
 or was eligible  to receive an Award  under the Plan or  any award under any
 other employee benefit  plan of the Company  entitling him to acquire stock,
 stock options  or stock appreciation  rights of the  Company. Subject to the
 provisions of  the Plan,  the Committee  or  the Board  shall have  the full
 authority, in  its discretion,  to  determine the  Employees to  whom Awards
 shall be granted, the number of Shares to  be covered by each of the Awards,
 and the  terms of  any such  Award; to  amend or  cancel Awards  (subject to
 Section 18 of the Plan); to accelerate the vesting of Awards; to require the
 cancellation or surrender of  any previously granted options under this Plan
 or any other plan of the Company as a condition to the granting of an Award;
 to  interpret the  Plan;  and to  prescribe,  amend, and  rescind  rules and
 regulations relating to it, and generally to interpret and determine any and
 all matters  whatsoever relating to  the administration of  the Plan and the
 granting of  Awards hereunder.  The Board  may, from  time to  time, appoint
 members to  the  Committee in  substitution for  or  in addition  to members
 previously  appointed  and  may  fill  vacancies,  however  caused,  in  the
 Committee. The Committee shall select one of its members as its Chairman and
 shall hold its meetings at such times and places as it shall deem advisable.
 A majority  of its  members shall  constitute  a quorum.  Any action of  the
 Committee may be taken by a written instrument signed by all of the members,
 and any action so taken shall be fully  as effective as if it had been taken
 by a vote  of a majority of  the members at a  meeting duly called and held.
 The Committee and/or the Board shall make such rules and regulations for the
 conduct of  its business  as it  shall  deem advisable  and shall  appoint a
 Secretary who shall  keep minutes of  its meeting and  records of all action
 taken in writing without a meeting. No  member of the Committee or the Board
 shall be liable, in  the absence of bad faith, for  any act or omission with
 respect to his service on the Committee.

 5.   Employees to Whom Awards May Be Granted.  Awards may be granted in each
 calendar year or portion thereof while  thePlan is in effect to such of  the
 Employees as the Committee or the Board in its discretion, shall determine.

      In determining the Employees  to whom Awards shall  be granted and  the
 number of Shares to be subject to purchase under such Awards, the  Committee
 and/or the  Board shall  take  into account  the  duties of  the  respective
 Employees, their present and potential contributions  to the success of  the
 Company, and such  other factors  as the  Committee shall  deem relevant  in
 connection with accomplishing the purposes of the Plan.

                                    - 2 -
<PAGE>

 6.  Stock Options.

 6.1  Types of Options. Options granted under this Plan may be (i)  Incentive
 Stock Options, (ii) Non-Qualified Stock Options,  or (iii) a combination  of
 the foregoing. The Award Agreement shall  designate whether an Option is  an
 Incentive Stock Option or a Non-Qualified Stock Option.

 6.2  Option Price. The  option price per Share  of any Option granted  under
 the Plan shall not be less than the Fair Market Value of the Shares  covered
 by the Option on the date the Option is granted.

 6.3  Term of Options. Options  granted hereunder shall be exercisable for  a
 Term of not more  than ten (10) years  from the date  of grant thereof,  but
 shall be subject to earlier termination as hereinafter provided. Each  Award
 Agreement issued hereunder shall specify the Term of the Option, which  Term
 shall be determined by  the Committee in  accordance with its  discretionary
 authority hereunder.

 6.4  Limit on Fair Market Value of Incentive Stock Options.  No Employee may
 be  granted  an  Incentive  Stock  Option  hereunder to the extent that  the
 aggregate Fair  Market Value (such Fair  Market Value being determined as of
 the  date  of  grant  of  the  Option) of the  stock with  respect to  which
 Incentive Stock Options are exercisable for the first time by  such Employee
 during  any  calendar  year  (under  all  such  plans  of   such  Employee's
 employer corporation and  itsParent and Subsidiary corporations) exceeds the
 sum of One Hundred Thousand Dollars ($100,000).

 7.  Date of Grant. The  date of grant  of an  Award granted  hereunder shall
 be on the date on  which the Committee and/or the Board acts in granting the
 Award.

 8.  Exercise  of Rights Under  Awards. An Employee  entitled to exercise  an
 Award may do so by  delivery of a written  notice to that effect  specifying
 the  number of Shares with respect to which the Award is being exercised and
 any other  information the  Committee may  prescribe.  The notice  shall  be
 accompanied  by payment in full  of the purchase price  of any Shares to  be
 purchased, which payment may be made in cash or, with the Committee's or the
 Board's approval,  in Shares  valued at  Fair Market  Value at  the time  of
 exercise or a combination thereof. No  Shares shall be issued upon  exercise
 of an  Option until  full payment  has been  made therefor.  All notices  or
 requests provided for herein shall be delivered to the Company's president.

 9.  Award Terms and Conditions. The holder of an Award shall not have any of
 the rights of a stockholder with  respect to the Shares subject to  purchase
 under an Award, except upon the due exercise of the Award.

 10.  Nontransferability of Awards. An Award shall not be transferable, other
 than by will or the laws  of descent and distribution,  and an Award may  be
 exercised, during the lifetime of the holder of the Award, only by him.

 11.  Adjustments Upon Changes in Capitalization.  In the event of changes in
 all of the  outstandingShares by reason  of stock  dividends, stock  splits,
 recapitalizations,  mergers,  consolidations,  combinations,  exchanges   of
 Shares, separations, reorganizations or  liquidations, the number and  class
 of Shares available under the Plan in the aggregate, the number and  classes
 of Shares subject to Awards theretofore granted, applicable purchase  prices
 and all other applicable provisions, shall, subject to the provisions of the
 Plan, be equitably adjusted by the Committee or the Board (which  adjustment
 may, but need not, include payment in cash  or in Shares in an amount  equal
 to the difference between the price at which such Award may be exercised and
 the then current Fair Market  Value of the Shares  subject to such Award  as
 equitably determined  by  the  Committee  or  the  Board)..  The  manner  of
 application of the foregoing provisions shall be determined by the Committee
 or the Board in its sole discretion. Any such adjustment may provide for the
 elimination of any fractional Share which might otherwise become subject  to
 a Award.

 12.  Unusual Corporate Events.  Notwithstanding anything to the contrary, in
 the case  of  an   unusual  corporate  event such  as  liquidation,  merger,
 reorganization  (other  than   a  reorganization  as   defined  by   Section
 368(a)(1)(F) of the  Code), or  other business  combination, acquisition  or
 change in the control  of the Company through  a tender offer or  otherwise,
 the Committee or the Board may, in its sole discretion, determine, on a case
 by case basis, that each Award granted under the Plan shall terminate ninety
 (90) days after the occurrence of such unusual corporate event. In the event
 the Committee or  the Board elects  to terminate such  Award, the  Committee
 shall immediately notify the  Award holder and the  Award holder shall  have
 the right, commencing at least five (5) days prior to such unusual corporate
 event, to immediately  exercise any  Award in  full, without  regard to  any
 vesting limitations, to the extent they shall not have been exercised.

                                    - 3 -

<PAGE>

 13.  Form  of  Options.  Nothing  contained in the  Plan nor any  resolution
 adopted by the Board or the stockholders of the Company shall constitute the
 granting of any Award.  An Award shall be  granted hereunder only by  action
 duly taken by the Committee or the Board in granting an Award. Whenever  the
 Committee or the  Board shall designate  an Employee for  the receipt of  an
 Award, the Secretary or the President  of the Company, or such other  person
 as the Committee  or the Board  shall appoint, shall  forthwith send  notice
 thereof to the Employee, in  such form as the  Committee or the Board  shall
 approve, stating the number  of Shares subject to  Award, its Term, and  the
 other terms and  conditions thereof. The  notice shall be  accompanied by  a
 written Award Agreement in such form as  may from time to time hereafter  be
 approved by the Committee or the Board, which shall have been duly  executed
 by or on behalf of the Company. If the surrender of previously issued Awards
 is made a condition of the grant,  the notice shall set forth the  pertinent
 details of such condition and the written Award Agreement executed by or  on
 behalf of the Company shall  be delivered to the  Employee on the date  such
 surrender is  made, but  it shall  be dated  as  of the  date on  which  the
 Committee designated the Employee to  receive an Award hereunder.  Execution
 by the Employee to  whom such Award  is granted of  said Award Agreement  in
 accordance with the provisions set forth  in this Plan shall be a  condition
 precedent to the exercise of any Award.

 14.  Taxes. The Company shall have the right to require a person entitled to
 receive Shares pursuant to the  exercise of an Award  under the Plan to  pay
 the Company the amount of any taxes which the Company is or will be required
 to withhold with  respect to  such Shares  before the  certificate for  such
 Shares is  delivered pursuant  to the  Award. Furthermore,  the Company  may
 elect to deduct such  taxes from any  other amounts payable  then or at  any
 time thereafter,  to  the  Employee. If  the  Employee  disposes  of  Shares
 acquired pursuant to an Incentive Stock Option in any transaction considered
 to be a qualifying transaction under Section  421 and 422A of the Code,  the
 Company shall have  the right  to deduct  any taxes  required by  law to  be
 withheld from any amounts otherwise payable to the Employee.

 15.  Termination of Plan.  The Plan shall terminate ten (10) years  from the
 date hereof, and an  Award shall not  be granted under  the Plan after  that
 date although the terms of any  Awards may be amended  at any date prior  to
 the end of its term in accordance  with the Plan. Any Awards outstanding  at
 the time of termination of the Plan shall continue in full force and  effect
 according to the terms and conditions of the Award and this Plan.

 16.  Amendment of the Plan.   The Plan may be amended  at any time and  from
 time to time  by the Board,  but no amendment  without the  approval of  the
 stockholders of the Company shall:

   (a)  increase the number of shares as to which Awards may be granted under
        the Plan;

   (b)  expand or change the class of persons eligible to receive Awards;

   (c)  permit the purchase price of Shares subject to an Option granted
        under the Plan to be less than the Fair Market Value of such Shares
        at the time the Option is granted;

   (d)  extend the term of the Plan; or

   (e)  materially increase the benefits to the Employees under the Plan.

 Notwithstanding anything to the contrary  contained herein, no amendment  or
 cancellation of the Plan or any Award granted under the Plan shall alter  or
 impair any of the rights or obligations of any person, without his  consent,
 under any Award theretofore granted under the Plan.

 17.  Delivery of  Shares on Exercise.   Delivery of certificates for  Shares
 pursuant to  an Award  exercise may  be postponed  by the  Company for  such
 period as may be required for it, with reasonable diligence, to comply  with
 any applicable requirements of any federal, state or local law or regulation
 or any administrative or quasi-administrative requirements applicable to the
 sale, issuance, distribution or delivery of such Shares.

 18.  Fees and Costs.  The Company shall pay all original issue taxes on  the
 exercise of any Award granted under the Plan and all other fees and expenses
 necessarily incurred by the Company in connection therewith.

                                    - 4 -
<PAGE>

 19.  Effectiveness  of  the  Plan.  The  Plan shall  become  effective  when
 approved by  the  Board. The  Plan  shall  thereafter be  submitted  to  the
 Company's shareholders for approval and unless  the Plan is approved by  the
 affirmative votes of the holders of  Shares having a majority of the  voting
 power of all Shares  represented at a meeting  duly held in accordance  with
 Illinois law within twelve  (12) months after being  approved by the  Board,
 the Plan and  all Awards made  under it shall  be void and  of no force  and
 effect.

 20.  Other  Provisions.  As  used  in the  Plan,  and in  Awards  and  other
 documents  prepared  in  implementation  of  the  Plan,  references  to  the
 masculine pronoun shall be  deemed to refer to  the feminine or neuter,  and
 references in the singular or  the plural shall refer  to the plural or  the
 singular, as the  identity of the  person or persons  or entity or  entities
 being referred to may require. The captions used in the Plan, in the  Awards
 and  other  documents  prepared  in  implementation  of  the  Plan  are  for
 convenience only and shall not affect the meaning of any provision hereof or
 thereof.

                               UNITED FINANCIAL MORTGAGE CORP.

                               By:  /s/ Joseph Khoshabe
                               --------------------------
                               Joseph Khoshabe, President

                                    - 5 -

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