<PAGE>
                                                                   EXHIBIT 10.14

                                (JP MORGAN LOGO)

                               JPMORGAN CHASE BANK
                           717 TRAVIS, 6TH FLOOR NORTH
                              HOUSTON, TEXAS 77002

                                February 5, 2004

Sunset Financial Resources, Inc.
4231 Walnut Bend
Jacksonville, Florida  32257

Attention: Mr. John Bert Watson


Ladies and Gentlemen:

         Sunset Financial Resources ("Sunset") has requested that JPMorgan Chase
Bank. ("JPMCB") agree to structure, arrange and provide a senior revolving
credit facility in an aggregate amount of up to $250,000,000 (the "Facility"),
with JPMCB agreeing to serve as administrative agent ("Administrative Agent")
for the Facility.

         JPMCB is pleased to advise you of its commitment to provide the
Facility upon the terms and subject to the conditions set forth or referred to
in this commitment letter (the "Commitment Letter") and in the Summary of Terms
and Conditions attached hereto as Exhibit A (the "Term Sheet").

         It is agreed that JPMCB will act as the sole and exclusive
Administrative Agent for the Facility and will, in such capacity, perform the
duties and exercise the authority customarily performed and exercised by it in
such role. You agree that no other agents, co-agents or arrangers will be
appointed, no other titles will be awarded and no compensation (other than that
expressly contemplated by the Term Sheet) will be paid in connection with the
Facility unless you and we shall so agree.

         JPMCB's commitment hereunder is subject to (a) there not occurring or
becoming known to us any material adverse condition or material adverse change
in or affecting the business, operations, property, condition (financial or
otherwise) or prospects of Sunset and its subsidiaries, taken as a whole, (b)
our completion of and satisfaction in all respects with a due diligence
investigation of Sunset, (c) our not becoming aware after the date hereof of any
information or other matter affecting Sunset or the transactions contemplated
hereby which is inconsistent in a material and adverse manner with any such
information or other matter disclosed to us prior to the date hereof, (d) there
not having occurred a material disruption of or material adverse change in
financial, banking or capital market conditions that, in our judgment, could
materially impair the Facility, (e) prior to the closing of the Facility, Sunset
shall appoint a Chief Information Officer with such appointment subject to
approval by JPMCB, (f) completion of the initial public offering of up to $100
million of Sunset common stock with the proceeds



<PAGE>




Sunset Financial Resources, Inc.
February 5, 2004
Page 2

from the public offering to be used to purchase residential mortgage loans, (g)
the negotiation, execution and delivery of definitive documentation with respect
to the Facility satisfactory to JPMCB and its counsel and (h) the other
conditions set forth or referred to in the Term Sheet. The terms and conditions
of JPMCB's commitment hereunder and of the Facility are not limited to those set
forth herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of JPMCB and Sunset.

         You agree to indemnify and hold harmless JPMCB, its respective
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an "indemnified person") from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this Commitment Letter, the
Facility, the use of the proceeds thereof or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the foregoing,
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities or related expenses to the extent
they are found by a final, non-appealable judgment of a court to arise from the
willful misconduct, unlawful conduct or gross negligence of such indemnified
person. YOU AGREE THAT THE INDEMNITY CONTAINED IN THE PRECEDING SENTENCE EXTENDS
TO AND IS INTENDED TO COVER LOSSES AND RELATED EXPENSES ARISING OUT OF THE
ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY INDEMNIFIED PERSON. You also
agree to reimburse JPMCB, and its affiliates on demand for all out-of-pocket
expenses (including due diligence expenses, syndication expenses, travel
expenses, and reasonable fees and reasonable charges and disbursements of
counsel) incurred in connection with the Facility and any related documentation
(including this Commitment Letter, the Term Sheet and the definitive financing
documentation) or the administration, amendment, modification or waiver thereof.
No indemnified person shall be liable for any damages arising from the use by
others of Information or other materials obtained through electronic,
telecommunications or other information transmission systems or for any special,
indirect, consequential or punitive damages in connection with the Facilities.

         This Commitment Letter shall not be assignable by you without the prior
written consent of JPMCB (and any purported assignment without such consent
shall be null and void), is intended to be solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto. This Commitment Letter may
not be amended or waived except by an instrument in writing signed by you and
JPMCB. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of
manually executed counterpart hereof. This Commitment Letter, between you and
JPMCB is the only agreements that has been entered into among us with respect to
the Facility and set forth the entire understanding of the parties with



<PAGE>


Sunset Financial Resources, Inc.
February 5, 2004
Page 3


respect thereto. This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of Texas.

         You acknowledge that JPMCB may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests regarding the
transactions described herein and otherwise. JPMCB will not use or disclose
confidential information obtained from you by virtue of the transactions
contemplated by this Commitment Letter or its other relationships with you in
connection with the performance by it of services for other companies, and JPMCB
will not furnish any such information to other companies. You also acknowledge
that JPMCB has no obligation to you in connection with the transactions
contemplated by this Commitment Letter, or to furnish to you, confidential
information obtained by JPMCB from other companies.

         This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter or the Term Sheet nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person except
(a) to your officers, agents and advisors who are directly involved in the
consideration of this matter or (b) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof), provided, that the foregoing restrictions
shall cease to apply after this Commitment Letter has been accepted by you.

         The reimbursement, indemnification and confidentiality provisions
contained herein shall remain in full force and effect regardless of whether
definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or JPMCB's commitment
hereunder; provided, that your obligations under this Commitment Letter, other
than those arising under the third and ninth paragraphs hereof, shall
automatically terminate and be superseded by the provisions of the definitive
documentation relating to the Facility upon the initial funding thereunder, and
you shall automatically be released from all liability in connection therewith
at such time.

         THIS COMMITMENT LETTER, THE ATTACHED TERM SHEET AND ALL EXHIBITS,
SCHEDULES AND OTHER ATTACHMENTS HERETO AND THERETO CONSTITUTE A "LOAN AGREEMENT"
FOR PURPOSES OF SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE AND
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheet by returning to us
executed counterparts hereof not later than 5:00 p.m., Central Daylight Time, on
February 6, 2004. JPMCB's commitment and agreements herein will expire at such
time in the event JPMCB has not received such executed counterparts and such
amounts in accordance with the immediately preceding sentence. Upon execution,
the effective date of this commitment is January 21, 2004.



<PAGE>



Sunset Financial Resources, Inc.
February 5, 2004
Page 4


         JPMCB is pleased to have been given the opportunity to assist you in
connection with this important financing.


                                      Very truly yours,

                                      JPMORGAN CHASE BANK


                                      By: /s/ THANH ROETTELE
                                         ---------------------------------------
                                      Name: Thanh Roettele
                                           -------------------------------------
                                      Title: Vice President
                                            ------------------------------------


Agreed:

SUNSET FINANCIAL RESOURCES, INC.


By: /s/ J. BERT WATSON
   -----------------------------------------
Name: J. Bert Watson
     ---------------------------------------
Title: President / CEO
      --------------------------------------



<PAGE>

CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================

                         SUMMARY OF TERMS AND CONDITIONS

THE FOLLOWING SUMMARY OF INDICATIVE TERMS AND CONDITIONS IS PROVIDED FOR
DISCUSSION PURPOSES ONLY AND DOES NOT CONSTITUTE A COMMITMENT TO LEND OR AN
AGREEMENT TO ISSUE A COMMITMENT. ITS TERMS ARE NOT ALL-INCLUSIVE. ADDITIONS AND
CHANGES MAY BE MADE AS JPMORGAN CHASE BANK AND ITS COUNSEL DEEM NECESSARY,
PRUDENT OR DESIRABLE. NO AGREEMENT (ORAL OR OTHERWISE) THAT MAY BE REACHED
DURING NEGOTIATIONS SHALL BE BINDING UPON THE PARTIES UNTIL A FINAL COMMITMENT
LETTER HAS BEEN ISSUED BY THE LENDER AND ACCEPTED BY THE BORROWER. THE SUMMARY
OF INDICATIVE TERMS AND CONDITIONS SHALL BE KEPT CONFIDENTIAL, SHALL NOT BE
REPRODUCED OR DISCLOSED, AND SHALL NOT BE USED BY YOU OTHER THAN IN CONNECTION
WITH EVALUATING THE TRANSACTION DESCRIBED HEREIN.


BORROWER:                  Sunset Financial Resources ("Sunset" or the
                           "Borrower").

LENDER:                    JPMorgan Chase Bank ("JPMorgan" or "Lender").

COLLATERAL AGENT:          JPMorgan Chase Bank ("JPMorgan" or "Agent").

FACILITY:                  $250,000,000 Secured Revolving Mortgage Warehouse
                           Facility (the "Facility" or "Total Facility Amount").

PURPOSE:                   To warehouse residential mortgage loans for which the
                           Agent has received, or in the case of Wet Loans will
                           receive, required documents

SUBLIMITS:                 The Warehouse Facility will have the following
                           sublimit:

                           CONFORMING SUBLIMIT: Up to 100% of the Warehouse
                           Facility may be used to finance Conforming Loans;

                           ALT-A SUBLIMIT: Up to 100% of the warehouse facility
                           may be used to fund Alt-A loans. Alt-A loans will
                           have a minimum FICO score of 630 and an average FICO
                           of 680 with a maximum LTV of 95%.

                           WET SUBLIMIT: Up to 30% of the warehouse facility,
                           increasing to 40% for the first five and last five
                           business days of the month, may be used to fund loans
                           which have closed and whose documents are in transit
                           to the Agent. Loan documents are to be delivered to
                           the Agent within seven (7) business days of the
                           funded date.

                           (Specific collateral limits are discussed in the
                           Eligible Collateral section)

ADVANCE RATES:             For all loans:

                                o   98% of the lesser of: (a) the actual amount
                                    funded by the Borrower (less discount
                                    points, if applicable); (b) the approved
                                    investor take-out price; (c) the net cash
                                    amount the Borrower paid for the loan; or
                                    (d) the unpaid principal amount of the
                                    underlying loan, not to exceed par.

                                    IN CONNECTION WITH THE INVOCATION BY THE
                                    LENDER OF ITS RIGHT AT ANY TIME TO MARK TO
                                    MARKET ANY ONE OR MORE LOANS, THE ADVANCE
                                    RATE SHALL BE THE LESSER OF (a) THE
                                    COLLATERAL VALUE STATED ABOVE; OR (b) 95% OF
                                    THE MARKET VALUE AS DETERMINED BY THE LENDER
                                    WHEN MARKING SUCH LOAN(S) TO MARKET.



                                   Page 1 of 7
(JP MORGAN LOGO)

<PAGE>


CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================

SECURITY:                  Perfected first lien on all residential mortgage
                           loans funded under the Facility (including "Wet"
                           loans) and all rights, takeout commitments (including
                           hedge instruments) and all sale proceeds related
                           thereto, including an assignment of takeout
                           commitment. Collateral may be released to an Investor
                           by the Agent (in its capacity as documents custodian)
                           on a bailee letter or pursuant to bailee agreement.
                           All loans will be shipped directly to the permanent
                           Investors by the custodian. Collateral released on a
                           bailee letter or pursuant to a bailee agreement shall
                           not be outstanding beyond 45 days. All payments from
                           Investors must come directly to the Lender. Borrower
                           will provide Lender a list of Investors for approval.

ELIGIBLE COLLATERAL:       Customary criteria, including:

                           Collateral Limits:

                              o       "Jumbo" mortgage loans are limited to no
                                      more than 75% of the Warehouse Facility
                                      and "Super Jumbo" loans to no more than
                                      10%. A "Jumbo" mortgage loan is a
                                      conforming loan in all respects except
                                      for principal balance. "Jumbo" is any
                                      loan that exceeds conforming limits
                                      (therefore "non-conforming") up to and
                                      including $650,000. A "Super Jumbo"
                                      mortgage loan is non-conforming mortgage
                                      loan with a principal balance greater
                                      than $650,000 and less than $1,500,000
                                      (loans in excess of $1,500,000 are
                                      subject to Lender approval on a case by
                                      case basis);

                              o       No mortgage shall qualify as eligible if
                                      its Cumulative Loan to Value Ratio is
                                      above 100% (excluding FNMA eligible
                                      "Flex 100" loans. FNMA allows 100%LTV
                                      plus a 3% second so that CLTV may total
                                      103%);

                              o       To the extent that any mortgage loan has
                                      a loan-to-value ratio in excess of 80%,
                                      such loan will be covered by mortgage
                                      insurance.

                              o       Non-owner occupied residential mortgages
                                      are limited to no more than 5.0% of the
                                      Warehouse Facility;

                              o       Townhouse/Condominium loans cannot
                                      exceed 5% of the Facility amount;

                              o       Each mortgage loan has been originated
                                      for no more than 60 days prior to the
                                      Original Pledge Date except for $5MM of
                                      the Total Facility Amount which may be
                                      originated up to 90 days prior;

                              o       Each mortgage loan has been pledged for
                                      no more than 120 days from the Original
                                      Pledge Date except for 20% of the Total
                                      Facility Amount which may be funded for
                                      up to 180 days;

                              o       Pledged mortgage loans shall not be 30
                                      days or more delinquent or contain any
                                      other material default;

                              o       Notes or other material documents sent
                                      out for correction must be returned to
                                      the custody of the Agent within 10
                                      Business days;

                              o       Residential mortgage loans to affiliates,
                                      corporations, rehabilitation, commercial,
                                      construction loans, mobile homes,
                                      manufactured homes, or partnerships are
                                      not permitted;

                              o       The following collateral types will not
                                      be eligible for warehousing under this
                                      facility: (i) Section 32 Loans, and (ii)
                                      Loans with Single Premium Life
                                      Insurance.



                                  Page 2 of 7

(JP MORGAN LOGO)
<PAGE>


CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================

DOCUMENTATION:             For each mortgage loan warehoused:

                           a) The Borrower will deliver to the Lender a document
                              package comprised of:

                              o     The original, executed note;

                              o     A recorded original (or if in the process of
                                    recordation, a certified copy of) the Deed
                                    of Trust;

                              o     An original assignment in blank, in
                                    recordable format, plus any intervening
                                    assignments if applicable;

                              o     A copy of the first and last page of the
                                    appraisal (except for "stated value" loans
                                    which do not have an appraisal).

                           b) The Borrower will hold in trust for the Lender:

                              o     Title Policy Commitment;

                              o     Original take-out Commitments, if
                                    applicable;

                              o     Original insurance policy; and,

                              o     All other original documents.

                           c) For Borrowings under the Wet Sublimit, the
                              Borrower will provide to the Agent, a list,
                              certified by an authorized officer of the
                              Borrower, of those loans which qualify for funding
                              under the Wet Sublimit, setting out the Borrower
                              Name, Property Address, Note Amount, Note Date,
                              Note Interest Rate, and the Loan Number.

INTEREST RATES:

                           At the Borrower's option:

                           For all borrowings:

                              -  30-day reserve-adjusted LIBOR, floating daily,
                                 plus 1.125% or

                              -  Alternate Base Rate (JPMorgan Prime plus
                                 .125%);

FACILITY FEE:              25.0 bps on the total Warehouse Facility (whether
                           used or unused), payable quarterly in advance.

MATURITY:                  364 days from date of Closing Date.

REPAYMENT:                 All interest is payable monthly in arrears and is due
                           by the fifteenth of the following month. Principal is
                           due at maturity.

OPTIONAL
PREPAYMENTS:               No restrictions and no penalty.

MANDATORY
PREPAYMENTS:               Mandatory prepayments or the pledge of additional
                           appropriate collateral will be required in the
                           amounts by which the amount outstanding under the
                           Warehouse Facility exceeds the borrowing base.



                                  Page 3 of 7

(JP MORGAN LOGO)
<PAGE>


CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================

CONDITIONS
PRECEDENT TO
INITIAL BORROWING:         Customary for facilities and transactions of this
                           nature, including but not limited to:

                           1) Execution of proposed initial public offering of
                              Sunset of not less than $100,000,000 on terms and
                              conditions described in the preliminary offering
                              memorandum and reasonably satisfactory to the
                              Lender.

                           2) Execution and delivery of all documentation
                              satisfactory to the Lender and its counsel (the
                              "Credit Documentation").

                           2) Absence of Default

                           3) Accuracy of representations and warranties;

                           4) Receipt of valid security interest;

                           5) Legal opinion from counsel of Borrower
                              satisfactory to Lender;

                           6) List of investors approved by the Lender;

                           7) Approved Hiring of Chief Investment Officer;

CONDITIONS
PRECEDENT TO
ALL BORROWINGS:            Customary for facilities and transactions of this
                           nature, including, but not limited to:

                           1) All representations and warranties are true on and
                              as the date of the borrowing as though made on and
                              as such date;

                           2) No event of default, or event which with the
                              giving notice or lapses of time or both would be
                              an event of default, has occurred and is
                              continuing, or would result from such purchase.

                           3) An applicable borrowing base certificate, with
                              which the Borrower is in compliance after giving
                              effect to such borrowing;

                           4) The borrowing will not contravene any applicable
                              law.

REPRESENTATIONS
AND WARRANTIES:            Customary for facilities and transactions of this
                           nature, including, but not limited to financial
                           statements and other information, no material adverse
                           changes, litigation, compliance with laws (including
                           ERISA and government agencies), insurance, taxes,
                           maintenance of approved seller servicer standing with
                           agencies, properties and licenses.

EVENTS OF
DEFAULT:                   The Credit Documentation will contain customary
                           default provisions appropriate in the context of the
                           proposed transaction, including but not limited to
                           the following:

                               o   Failure to pay principal, interest or fees
                                   when due;

                               o   Failure to comply with any covenant of the
                                   Credit Agreement or the Security Agreement
                                   (subject to permitted grace period);

                               o   Material Breach of any Representation or
                                   Warranty in the purchase agreement or any
                                   other document delivered to the Lender or
                                   Agent;

                               o   Bankruptcy or insolvency of the Borrower;

                               o   Material change in the management of the
                                   Borrower;



                                  Page 4 of 7

(JP MORGAN LOGO)
<PAGE>


CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================


                               o   Failure of the borrower to pay any debt when
                                   due, or upon the acceleration of such
                                   indebtedness, or upon a default under or in
                                   respect of such indebtedness which would,
                                   with or without the giving of notice or lapse
                                   of time or both, permit its acceleration; o

                               o   Any Plan falling under ERISA guidelines shall
                                   be terminated, or proceedings terminating
                                   such a plan shall be initiated; and

                               o   Any money judgment, writ or warrant of
                                   attachment, or similar process involving more
                                   than $1,000,000 shall be entered or filed,
                                   and shall remain unvacated, undischarged,
                                   unbonded, or unstayed for a period of 60 days
                                   or later than 5 days before the date of any
                                   proposed sale thereunder.

COVENANTS:                 Those negative, affirmative and financial covenants
                           customarily found in credit agreements appropriate in
                           the context of the proposed transaction and in any
                           event including, but not limited to the following:

                           General:

                               o   Provision of Financial Statements, including
                                   monthly company prepared financial
                                   statements provided within 30 days of month
                                   end and audited annual financial statements
                                   provided within 90 days of fiscal year end;

                               o   Without the approval of the Agent, no
                                   guaranty by the Borrower of any indebtedness
                                   other than for warehouse or repurchase debt
                                   for mortgage loans;

                               o   Restrictions on sale or other disposition of
                                   assets;

                               o   Restrictions on any significant change in
                                   accounting treatment and reporting practices
                                   except as permitted by GAAP consistently
                                   applied;

                               o   Sunset will underwrite loans in compliance
                                   with their Underwriting Guidelines, which
                                   shall not be materially changed without
                                   written consent of JP Morgan.

                               o   No mergers or acquisitions in which the
                                   Borrower is not the surviving entity;

                               o   Sunset will maintain its status as a Real
                                   Estate Investment Trust.

                           Financial:

                           The Borrower will:

                           1)  Maintain a minimum required Adjusted Tangible Net
                               Worth at all times of [85% OF ATNW AT CLOSING].

                           2)  Maintain a ratio of Total Recourse Liabilities to
                               Adjusted Tangible Net Worth, as of the end of
                               each month, of no more than 4:1.




                                  Page 5 of 7

(JP MORGAN LOGO)
<PAGE>

CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================

                           3)  Maintain a ratio of Total Liabilities (including
                               Recourse and Non-Recourse Liabilities) to
                               Adjusted Tangible Net Worth, as of the end of
                               each month, of no more than 10:1.

                           3)  Maintain a minimum required Net Income of $1.00
                               per quarter.

                           4)  Maintain a minimum required Liquidity of
                               $15,000,000 defined as unencumbered cash plus any
                               unfunded eligible collateral that is available to
                               be funded under a committed warehouse line of
                               credit.

                           Adjusted Tangible Net Worth will be defined as GAAP
                           Net Worth less intangible assets, exclusive of the
                           impact of FASB 133 adjustments on Other Comprehensive
                           Income, plus qualified subordinated debt.

ASSIGNMENTS
AND PARTICIPATIONS:        The Lender shall be permitted to assign and sell
                           participations in their Loans and commitments,
                           subject, in the case of assignments (other than to
                           another Lender or to of a Lender Affiliate (as
                           defined below), to the consent of the Lender. In the
                           case of partial assignments (other than to another
                           Lender or to a Lender Affiliate), the minimum
                           assignment amount shall be $10,000,000 unless
                           otherwise agreed by the Lender and, in the absence of
                           a default, the Borrower. Participants shall have the
                           same benefits as the Lender with respect to yield
                           protection and increased cost provisions. Voting
                           rights of participants shall be limited to those
                           matters with respect to which the affirmative vote of
                           the Lender from which it purchased its participation
                           would be required as described under "Voting" above.
                           Pledges of Loans in accordance with applicable law
                           shall be permitted without restriction.

                           "Lender Affiliate" means, (a) with respect to any
                           Lender, (i) an affiliate of such Lender or (ii) any
                           entity (whether a corporation, partnership, trust or
                           otherwise) that is engaged in making, purchasing,
                           holding or otherwise investing in bank loans and
                           similar extensions of credit in the ordinary course
                           of business and is administered or managed by a
                           Lender or an affiliate of such Lender and (b) with
                           respect to any Lender that is a fund which invests in
                           bank loans and similar extensions of credit and is
                           managed by the same investment advisor as such Lender
                           or by an affiliate of such investment advisor.

YIELD PROTECTION:          The Credit Documentation shall contain customary
                           provisions (a) protecting the Lender against
                           increased costs or loss of yield resulting from
                           changes in reserve, tax, capital adequacy and other
                           requirements of law and from the imposition of or
                           changes in withholding or other taxes.

EXPENSES AND
INDEMNIFICATION:           The Borrower shall pay (a) all reasonable
                           out-of-pocket expenses of the Lender associated with
                           the syndication of the Facility (including but not
                           limited to a collateral audit and servicing appraisal
                           to be performed by a third party auditor/appraiser
                           selected by Lender) and the preparation, execution,
                           delivery and administration of the Credit
                           Documentation and any amendment or waiver with
                           respect thereto (including the reasonable fees,
                           disbursements and other charges of counsel) and (b)
                           all out-of-pocket expenses of the Lender (including
                           the fees, disbursements and other charges of counsel)
                           in connection with the enforcement of the Credit
                           Documentation.



                                  Page 6 of 7


(JP MORGAN LOGO)
<PAGE>

CONFIDENTIAL                                    SUNSET FINANCIAL RESOURCES, INC.
================================================================================


                           The Lender (and their affiliates and their respective
                           officers, directors, employees, advisors and agents)
                           will have no liability for, and will be indemnified
                           and held harmless against, any loss, liability, cost
                           or expense incurred in respect of the financing
                           contemplated hereby or the use or the proposed use of
                           proceeds thereof (except to the extent resulting from
                           the gross negligence or willful misconduct of the
                           indemnified party).


GOVERNING LAW
AND FORUM:                 State of Texas


YOU ACKNOWLEDGE THAT JPMORGAN AND/OR JPMSI MAY BE PROVIDING DEBT FINANCING,
EQUITY CAPITAL OR OTHER SERVICES (INCLUDING FINANCIAL ADVISORY SERVICES) TO
OTHER COMPANIES IN RESPECT OF WHICH YOU MAY HAVE CONFLICTING INTERESTS REGARDING
THE TRANSACTION DESCRIBED HEREIN AND OTHERWISE. JPMORGAN AND/OR JPMSI WILL NOT
USE CONFIDENTIAL INFORMATION OBTAINED FROM YOU BY VIRTUE OF THE TRANSACTION
CONTEMPLATED BY THIS TERM SHEET OR THEIR OTHER RELATIONSHIPS WITH YOU IN
CONNECTION WITH THE PERFORMANCE BY JPMORGAN AND/OR JPMSI OF SERVICES FOR OTHER
COMPANIES, AND JPMORGAN AND/OR JPMSI WILL NOT FURNISH ANY SUCH INFORMATION TO
OTHER COMPANIES. YOU ALSO ACKNOWLEDGE THAT NEITHER JPMORGAN AND/OR JPMSI HAS ANY
OBLIGATION TO USE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS TERM
SHEET, OR TO FURNISH TO YOU, CONFIDENTIAL INFORMATION OBTAINED FROM OTHER
COMPANIES.



                                  Page 7 of 7

(JP MORGAN LOGO)