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                                                                    EXHIBIT 10.6

                       VOLTERRA SEMICONDUCTOR CORPORATION

                        2004 EMPLOYEE STOCK PURCHASE PLAN

                              ADOPTED: MAY 7, 2004
                       AMENDED AND RESTATED: MAY 17, 2004
                    APPROVED BY STOCKHOLDERS: JUNE 18, 2004

1.       PURPOSE.

         (a)      The purpose of the Plan is to provide a means by which
Employees of the Company and certain designated Related Corporations may be
given an opportunity to purchase shares of the Common Stock of the Company.

         (b)      The Company, by means of the Plan, seeks to retain the
services of such Employees, to secure and retain the services of new Employees
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Related Corporations.

         (c)      The Company intends that the Purchase Rights be considered
options issued under an Employee Stock Purchase Plan.

2.       DEFINITIONS.

         As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:

         (a)      "BOARD" means the Board of Directors of the Company.

         (b)      "CODE" means the Internal Revenue Code of 1986, as amended.

         (c)      "COMMITTEE" means a committee appointed by the Board in
accordance with Section 3(c) of the Plan.

         (d)      "COMMON STOCK" means the common stock of the Company.

         (e)      "COMPANY" means Volterra Semiconductor Corporation, a Delaware
corporation.

         (f)      "CONTRIBUTIONS" means the payroll deductions and other
additional payments that a Participant contributes to fund the exercise of a
Purchase Right. A Participant may make payments not through payroll deductions
only if specifically provided for in the Offering, and then only if the
Participant has not already had the maximum permitted amount withheld through
payroll deductions during the Offering.

         (g)      "CORPORATE TRANSACTION" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

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                  (i)      a sale or other disposition of all or substantially
all, as determined by the Board in its sole discretion, of the consolidated
assets of the Company and its Subsidiaries;

                  (ii)     a sale or other disposition of at least ninety
percent (90%) of the outstanding securities of the Company;

                  (iii)    a merger, consolidation or similar transaction
following which the Company is not the surviving corporation; or

                  (iv)     a merger, consolidation or similar transaction
following which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger, consolidation or
similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.

         (h)      "DILUTED SHARES OUTSTANDING" means, as of any date, (i) the
number of outstanding shares of Common Stock of the Company on such Calculation
Date (as defined in Section 4 herein), plus (ii) the number of shares of Common
Stock issuable upon such Calculation Date assuming the conversion of all
outstanding Preferred Stock and convertible notes, plus (iii) the additional
number of dilutive Common Stock equivalent shares outstanding as the result of
any options or warrants outstanding during the fiscal year, calculated using the
treasury stock method.

         (i)      "DIRECTOR" means a member of the Board.

         (j)      "ELIGIBLE EMPLOYEE" means an Employee who meets the
requirements set forth in the Offering for eligibility to participate in the
Offering, provided that such Employee also meets the requirements for
eligibility to participate set forth in the Plan.

         (k)      "EMPLOYEE" means any person, including Officers and Directors,
who is employed for purposes of Section 423(b)(4) of the Code by the Company or
a Related Corporation. Neither service as a Director nor payment of a director's
fee shall be sufficient to make an individual an Employee of the Company or a
Related Corporation.

         (l)      "EMPLOYEE STOCK PURCHASE PLAN" means a plan that grants
Purchase Rights intended to be options issued under an "employee stock purchase
plan," as that term is defined in Section 423(b) of the Code.

         (m)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (n)      "FAIR MARKET VALUE" means the value of a security, as
determined in good faith by the Board. If the security is listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of the security, unless otherwise
determined by the Board, shall be the closing sales price (rounded up where
necessary to the nearest whole cent) for such security (or the closing bid, if
no sales were reported) as quoted on such exchange or market (or the exchange or
market with the greatest volume of trading in the relevant security of the
Company) on the Trading Day prior to the relevant

                                       2.
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determination date, as reported in The Wall Street Journal or such other source
as the Board deems reliable.

         (o)      "OFFERING" means the grant of Purchase Rights to purchase
shares of Common Stock under the Plan to Eligible Employees.

         (p)      "OFFERING DATE" means a date selected by the Board for an
Offering to commence.

         (q)      "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

         (r)      "PARTICIPANT" means an Eligible Employee who holds an
outstanding Purchase Right granted pursuant to the Plan.

         (s)      "PLAN" means this Volterra Semiconductor Corporation 2004
Employee Stock Purchase Plan.

         (t)      "PURCHASE DATE" means one or more dates during an Offering
established by the Board on which Purchase Rights shall be exercised and as of
which purchases of shares of Common Stock shall be carried out in accordance
with such Offering.

         (u)      "PURCHASE PERIOD" means a period of time specified within an
Offering beginning on the Offering Date or on the next day following a Purchase
Date within an Offering and ending on a Purchase Date. An Offering may consist
of one or more Purchase Periods.

         (v)      "PURCHASE RIGHT" means an option to purchase shares of Common
Stock granted pursuant to the Plan.

         (w)      "RELATED CORPORATION" means any parent corporation or
subsidiary corporation, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the Code.

         (x)      "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (y)      "TRADING DAY" means any day on which the exchange(s) or
market(s) on which shares of Common Stock are listed, whether it be an
established stock exchange, the Nasdaq National Market, the Nasdaq SmallCap
Market or otherwise, is open for trading.

3.       ADMINISTRATION.

         (a)      The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 3(c). Whether or
not the Board has delegated administration, the Board shall have the final power
to determine all questions of policy and expediency that may arise in the
administration of the Plan.

         (b)      The Board (or the Committee) shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

                                       3.
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                  (i)      To determine when and how Purchase Rights to purchase
shares of Common Stock shall be granted and the provisions of each Offering of
such Purchase Rights (which need not be identical).

                  (ii)     To designate from time to time which Related
Corporations of the Company shall be eligible to participate in the Plan.

                  (iii)    To construe and interpret the Plan and Purchase
Rights, and to establish, amend and revoke rules and regulations for the
administration of the Plan. The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

                  (iv)     To amend the Plan as provided in Section 15.

                  (v)      Generally, to exercise such powers and to perform
such acts as it deems necessary or expedient to promote the best interests of
the Company and its Related Corporations and to carry out the intent that the
Plan be treated as an Employee Stock Purchase Plan.

         (c)      The Board may delegate administration of the Plan to a
Committee of the Board composed of one (1) or more members of the Board. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. If administration is delegated to a Committee,
references to the Board in this Plan and in the Offering document shall
thereafter be deemed to be to the Board or the Committee, as the case may be.

         (d)      All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall
be final, binding and conclusive on all persons.

4.       SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

         Subject to the provisions of Section 14 relating to adjustments upon
changes in securities, the shares of Common Stock that may be sold pursuant to
Purchase Rights shall not exceed in the aggregate four hundred fifty thousand
(450,000) shares of Common Stock, plus an annual increase to be added on the
last day of the fiscal year of the Company for a period of ten (10) years,
commencing on the last day of the fiscal year that ends on December 31, 2004 and
ending on (and including) the last day of the fiscal year that ends on December
31, 2013 (each such day, a "Calculation Date"), equal to the lesser of (i) one
and three-quarters percent (1.75%) of the Diluted Shares Outstanding on each
such Calculation Date (rounded down to the nearest whole share) and (ii) one
million (1,000,000) shares of Common Stock. Notwithstanding the foregoing, the
Board may act, prior to the last day of any fiscal year of the Company, to
increase the share reserve by such number of shares of Common Stock as the Board
shall determine, which number shall be less than the amount described in the
prior sentence. If any Purchase Right granted under the Plan shall for any
reason terminate without having been exercised, the

                                       4.
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shares of Common Stock not purchased under such Purchase Right shall again
become available for issuance under the Plan.

5.       GRANT OF PURCHASE RIGHTS; OFFERING.

         (a)      The Board may from time to time grant or provide for the grant
of Purchase Rights to purchase shares of Common Stock under the Plan to Eligible
Employees in an Offering (consisting of one or more Purchase Periods) on an
Offering Date or Offering Dates selected by the Board. Each Offering shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate, which shall comply with the requirement of Section 423(b)(5) of the
Code that all Employees granted Purchase Rights shall have the same rights and
privileges. The terms and conditions of an Offering shall be incorporated by
reference into the Plan and treated as part of the Plan. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27)
months beginning with the Offering Date, and the substance of the provisions
contained in Sections 6 through 9, inclusive.

         (b)      If a Participant has more than one Purchase Right outstanding
under the Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (i) each agreement or notice delivered by that Participant
shall be deemed to apply to all of his or her Purchase Rights under the Plan,
and (ii) a Purchase Right with a lower exercise price (or an earlier-granted
Purchase Right, if different Purchase Rights have identical exercise prices)
shall be exercised to the fullest possible extent before a Purchase Right with a
higher exercise price (or a later-granted Purchase Right if different Purchase
Rights have identical exercise prices) shall be exercised.

6.       ELIGIBILITY.

         (a)      Purchase Rights may be granted only to Employees of the
Company or, as the Board may designate as provided in Section 3(b), to Employees
of a Related Corporation. Except as provided in Section 6(b), an Employee shall
not be eligible to be granted Purchase Rights under the Plan unless, on the
Offering Date, such Employee has been in the employ of the Company or the
Related Corporation, as the case may be, for such continuous period preceding
such Offering Date as the Board may require, but in no event shall the required
period of continuous employment be greater than two (2) years. In addition, the
Board may provide that no Employee shall be eligible to be granted Purchase
Rights under the Plan unless, on the Offering Date, such Employee's customary
employment with the Company or the Related Corporation is more than twenty (20)
hours per week and/or more than five (5) months per calendar year.

         (b)      The Board may provide that each person who, during the course
of an Offering, first becomes an Eligible Employee shall, on a date or dates
specified in the Offering which coincides with the day on which such person
becomes an Eligible Employee or which occurs thereafter, receive a Purchase
Right under that Offering, which Purchase Right shall thereafter be deemed to be
a part of that Offering. Such Purchase Right shall have the same characteristics
as any Purchase Rights originally granted under that Offering, as described
herein, except that:

                                       5.
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                  (i)      the date on which such Purchase Right is granted
shall be the "Offering Date" of such Purchase Right for all purposes, including
determination of the exercise price of such Purchase Right;

                  (ii)     the period of the Offering with respect to such
Purchase Right shall begin on its Offering Date and end coincident with the end
of such Offering; and

                  (iii)    the Board may provide that if such person first
becomes an Eligible Employee within a specified period of time before the end of
the Offering, he or she shall not receive any Purchase Right under that
Offering.

         (c)      No Employee shall be eligible for the grant of any Purchase
Rights under the Plan if, immediately after any such Purchase Rights are
granted, such Employee owns stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
of any Related Corporation. For purposes of this Section 6(c), the rules of
Section 424(d) of the Code shall apply in determining the stock ownership of any
Employee, and stock which such Employee may purchase under all outstanding
Purchase Rights and options shall be treated as stock owned by such Employee.

         (d)      As specified by Section 423(b)(8) of the Code, an Eligible
Employee may be granted Purchase Rights under the Plan only if such Purchase
Rights, together with any other rights granted under all Employee Stock Purchase
Plans of the Company and any Related Corporations, do not permit such Eligible
Employee's rights to purchase stock of the Company or any Related Corporation to
accrue at a rate which exceeds twenty five thousand dollars ($25,000) of Fair
Market Value of such stock (determined at the time such rights are granted, and
which, with respect to the Plan, shall be determined as of their respective
Offering Dates) for each calendar year in which such rights are outstanding at
any time.

         (e)      Officers of the Company and any designated Related
Corporation, if they are otherwise Eligible Employees, shall be eligible to
participate in Offerings under the Plan. Notwithstanding the foregoing, the
Board may provide in an Offering that Employees who are highly compensated
Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be
eligible to participate.

7.       PURCHASE RIGHTS; PURCHASE PRICE.

         (a)      On each Offering Date, each Eligible Employee, pursuant to an
Offering made under the Plan, shall be granted a Purchase Right to purchase up
to that number of shares of Common Stock purchasable either with a percentage or
with a maximum dollar amount, as designated by the Board, but in either case not
exceeding twenty percent (20%), of such Employee's Earnings (as defined by the
Board in each Offering) during the period that begins on the Offering Date (or
such later date as the Board determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end of
the Offering.

         (b)      The Board shall establish one (1) or more Purchase Dates
during an Offering as of which Purchase Rights granted pursuant to that Offering
shall be exercised and purchases of shares of Common Stock shall be carried out
in accordance with such Offering.

                                       6.
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         (c)      In connection with each Offering made under the Plan, the
Board may specify a maximum number of shares of Common Stock that may be
purchased by any Participant on any Purchase Date during such Offering. In
connection with each Offering made under the Plan, the Board may specify a
maximum aggregate number of shares of Common Stock that may be purchased by all
Participants pursuant to such Offering. In addition, in connection with each
Offering that contains more than one Purchase Date, the Board may specify a
maximum aggregate number of shares of Common Stock that may be purchased by all
Participants on any Purchase Date under the Offering. If the aggregate purchase
of shares of Common Stock issuable upon exercise of Purchase Rights granted
under the Offering would exceed any such maximum aggregate number, then, in the
absence of any Board action otherwise, a pro rata allocation of the shares of
Common Stock available shall be made in as nearly a uniform manner as shall be
practicable and equitable.

         (d)      The purchase price of shares of Common Stock acquired pursuant
to Purchase Rights shall be not less than the lesser of:

                  (i)      an amount equal to eighty-five percent (85%) of the
Fair Market Value of the shares of Common Stock on the Offering Date; or

                  (ii)     an amount equal to eighty-five percent (85%) of the
Fair Market Value of the shares of Common Stock on the applicable Purchase Date.

8.       PARTICIPATION; WITHDRAWAL; TERMINATION.

         (a)      A Participant may elect to authorize payroll deductions
pursuant to an Offering under the Plan by completing and delivering to the
Company, within the time specified in the Offering, an enrollment form (in such
form as the Company may provide). Each such enrollment form shall authorize an
amount of Contributions expressed as a percentage of the submitting
Participant's Earnings (as defined in each Offering) during the Offering (not to
exceed the maximum percentage specified by the Board). Each Participant's
Contributions shall remain the property of the Participant at all times prior to
the purchase of Common Stock, but such Contributions may be commingled with the
assets of the Company and used for general corporate purposes except where
applicable law requires that Contributions be deposited with an independent
third party. To the extent provided in the Offering, a Participant may begin
making Contributions after the beginning of the Offering. To the extent provided
in the Offering, a Participant may thereafter reduce (including to zero) or
increase his or her Contributions. To the extent specifically provided in the
Offering, in addition to making Contributions by payroll deductions, a
Participant may make Contributions through the payment by cash or check prior to
each Purchase Date of the Offering.

         (b)      During an Offering, a Participant may cease making
Contributions and withdraw from the Offering by delivering to the Company a
notice of withdrawal in such form as the Company may provide. Such withdrawal
may be elected at any time prior to the end of the Offering, except as provided
otherwise in the Offering. Upon such withdrawal from the Offering by a
Participant, the Company shall distribute to such Participant all of his or her
accumulated Contributions (reduced to the extent, if any, such Contributions
have been used to acquire shares of Common Stock for the Participant) under the
Offering, and such Participant's Purchase Right

                                       7.
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in that Offering shall thereupon terminate. A Participant's withdrawal from an
Offering shall have no effect upon such Participant's eligibility to participate
in any other Offerings under the Plan, but such Participant shall be required to
deliver a new enrollment form in order to participate in subsequent Offerings.

         (c)      Purchase Rights granted pursuant to any Offering under the
Plan shall terminate immediately upon a Participant ceasing to be an Employee
for any reason or for no reason (subject to any post-employment participation
period required by law) or other lack of eligibility. The Company shall
distribute to such terminated or otherwise ineligible Employee all of his or her
accumulated Contributions (reduced to the extent, if any, such Contributions
have been used to acquire shares of Common Stock for the terminated or otherwise
ineligible Employee) under the Offering.

         (d)      Purchase Rights shall not be transferable by a Participant
otherwise than by will, the laws of descent and distribution, or a beneficiary
designation as provided in Section 13. During a Participant's lifetime, Purchase
Rights shall be exercisable only by such Participant.

         (e)      Unless otherwise specified in an Offering, the Company shall
have no obligation to pay interest on Contributions.

9.       EXERCISE.

         (a)      On each Purchase Date during an Offering, each Participant's
accumulated Contributions shall be applied to the purchase of shares of Common
Stock up to the maximum number of shares of Common Stock permitted pursuant to
the terms of the Plan and the applicable Offering, at the purchase price
specified in the Offering. No fractional shares shall be issued upon the
exercise of Purchase Rights unless specifically provided for in the Offering.

         (b)      If any amount of accumulated Contributions remains in a
Participant's account after the purchase of shares of Common Stock and such
remaining amount is less than the amount required to purchase one share of
Common Stock on the final Purchase Date of an Offering, then such remaining
amount shall be held in such Participant's account for the purchase of shares of
Common Stock under the next Offering under the Plan, unless such Participant
withdraws from such next Offering, as provided in Section 8(b), or is not
eligible to participate in such Offering, as provided in Section 6, in which
case such amount shall be distributed to such Participant after the final
Purchase Date, without interest. If the amount of Contributions remaining in a
Participant's account after the purchase of shares of Common Stock is at least
equal to the amount required to purchase one (1) whole share of Common Stock on
the final Purchase Date of the Offering, then such remaining amount shall be
distributed in full to such Participant at the end of the Offering.

         (c)      No Purchase Rights may be exercised to any extent unless the
shares of Common Stock to be issued upon such exercise under the Plan are
covered by an effective registration statement pursuant to the Securities Act
and the Plan is in material compliance with all laws applicable to the Plan. If
on a Purchase Date during any Offering hereunder the shares of Common Stock are
not so registered or the Plan is not in such compliance, no Purchase Rights or
any Offering shall be exercised on such Purchase Date, and the Purchase Date
shall be delayed

                                       8.
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until the shares of Common Stock are subject to such an effective registration
statement and the Plan is in such compliance, except that the Purchase Date
shall not be delayed more than twelve (12) months and the Purchase Date shall in
no event be more than twenty-seven (27) months from the Offering Date. If, on
the Purchase Date under any Offering hereunder, as delayed to the maximum extent
permissible, the shares of Common Stock are not registered and the Plan is not
in such compliance, no Purchase Rights or any Offering shall be exercised and
all Contributions accumulated during the Offering (reduced to the extent, if
any, such Contributions have been used to acquire shares of Common Stock) shall
be distributed to the Participants.

10.      COVENANTS OF THE COMPANY.

         The Company shall seek to obtain from each federal, state, foreign or
other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of Common Stock upon
exercise of the Purchase Rights. If, after commercially reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary for the lawful issuance
and sale of shares of Common Stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell shares of Common Stock upon
exercise of such Purchase Rights unless and until such authority is obtained.

11.      USE OF PROCEEDS FROM SHARES OF COMMON STOCK.

         Proceeds from the sale of shares of Common Stock pursuant to Purchase
Rights shall constitute general funds of the Company.

12.      RIGHTS AS A STOCKHOLDER.

         A Participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, shares of Common Stock subject to
Purchase Rights unless and until the Participant's shares of Common Stock
acquired upon exercise of Purchase Rights are recorded in the books of the
Company (or its transfer agent).

13.      DESIGNATION OF BENEFICIARY.

         (a)      A Participant may file a written designation of a beneficiary
who is to receive any shares of Common Stock and/or cash, if any, from the
Participant's account under the Plan in the event of such Participant's death
subsequent to the end of an Offering but prior to delivery to the Participant of
such shares of Common Stock or cash. In addition, a Participant may file a
written designation of a beneficiary who is to receive any cash from the
Participant's account under the Plan in the event of such Participant's death
during an Offering. Any such designation shall be on a form provided by or
otherwise acceptable to the Company.

         (b)      The Participant may change such designation of beneficiary at
any time by written notice to the Company. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant's death, the Company shall
deliver such shares of Common Stock and/or cash to the executor or administrator
of the estate of the Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its sole
discretion, may deliver

                                       9.
<PAGE>

such shares of Common Stock and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

14.      ADJUSTMENTS UPON CHANGES IN SECURITIES; CORPORATE TRANSACTIONS.

         (a)      If any change is made in the shares of Common Stock, subject
to the Plan, or subject to any Purchase Right, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan shall be appropriately
adjusted in the type(s), class(es) and maximum number of shares of Common Stock
subject to the Plan pursuant to Section 4(a), and the outstanding Purchase
Rights shall be appropriately adjusted in the type(s), class(es), number of
shares and purchase limits of such outstanding Purchase Rights. The Board shall
make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a "transaction not involving the receipt of consideration by
the Company.")

         (b)      In the event of a Corporate Transaction, then: (i) any
surviving or acquiring corporation (or the surviving or acquiring corporation's
parent company) may continue or assume Purchase Rights outstanding under the
Plan or may substitute similar rights (including a right to acquire the same
consideration paid to stockholders in the Corporate Transaction) for those
outstanding under the Plan, or (ii) if any surviving or acquiring corporation
(or its parent company) does not continue or assume such Purchase Rights or does
not substitute similar rights for Purchase Rights outstanding under the Plan,
then, the Participants' accumulated Contributions shall be used to purchase
shares of Common Stock within ten (10) business days prior to the Corporate
Transaction under the ongoing Offering, and the Participants' Purchase Rights
under the ongoing Offering shall terminate immediately after such purchase.

15.      AMENDMENT OF THE PLAN.

         (a)      The Board at any time, and from time to time, may amend the
Plan. However, except as provided in Section 14 relating to adjustments upon
changes in securities and except as to amendments solely to benefit the
administration of the Plan, to take account of a change in legislation or to
obtain or maintain favorable tax, exchange control or regulatory treatment for
Participants or the Company or any Related Corporation, no amendment shall be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary for the Plan to satisfy the requirements of
Section 423 of the Code or other applicable laws or regulations.

         (b)      It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide Employees with
the maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to Employee Stock Purchase
Plans or to bring the Plan and/or Purchase Rights into compliance therewith.

                                      10.
<PAGE>

         (c)      The rights and obligations under any Purchase Rights granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
except: (i) with the consent of the person to whom such Purchase Rights were
granted, or (ii) as necessary to comply with any laws or governmental
regulations (including, without limitation, the provisions of the Code and the
regulations promulgated thereunder relating to Employee Stock Purchase Plans).

16.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a)      The Board in its discretion may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate at the time that
all of the shares of Common Stock reserved for issuance under the Plan, as
increased and/or adjusted from time to time, have been issued under the terms of
the Plan. No Purchase Rights may be granted under the Plan while the Plan is
suspended or after it is terminated.

         (b)      Any benefits, privileges, entitlements and obligations under
any Purchase Rights while the Plan is in effect shall not be impaired by
suspension or termination of the Plan except (i) as expressly provided in the
Plan or with the consent of the person to whom such Purchase Rights were
granted, (ii) as necessary to comply with any laws, regulations or listing
requirements, or (iii) as necessary to ensure that the Plan and/or Purchase
Rights comply with the requirements of Section 423 of the Code. Notwithstanding
the foregoing, if the Company's accountants advise the Company that the
accounting treatment of purchases under the Plan will change or has changed in a
manner that the Company determines is detrimental to its best interests, then
the Company may, in its discretion, take any or all of the following actions:
(i) terminate each Offering hereunder that is then ongoing as of the next
Purchase Date (after the purchase of stock on such Purchase Date) under such
Offering; (ii) set a new Purchase Date for each ongoing Offering and terminate
such Offerings after the purchase of stock on such Purchase Date; (iii) amend
the Plan and the ongoing Offering so that such Offering will no longer have an
accounting treatment that is detrimental to the Company's best interests and
(iv) terminate each ongoing Offering and refund any Contributions (reduced to
the extent, if any, such Contributions have been used to acquire shares of
Common Stock) without interest to the participants.

17.      EFFECTIVE DATE OF PLAN.

         The Plan shall become effective as determined by the Board, but no
Purchase Rights shall be exercised unless and until the Plan has been approved
by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted by the Board.

18.      MISCELLANEOUS PROVISIONS.

         (a)      The Plan and Offering do not constitute an employment
contract. Nothing in the Plan or in the Offering shall in any way alter the at
will nature of a Participant's employment or be deemed to create in any way
whatsoever any obligation on the part of any Participant to continue in the
employ of the Company or a Related Corporation, or on the part of the Company or
a Related Corporation to continue the employment of a Participant.

         (b)      The provisions of the Plan shall be governed by the laws of
the State of Delaware without resort to that state's conflicts of laws rules.

                                      11.<PAGE>

                                                                    EXHIBIT 10.1

                       6/04 AMENDMENT TO CREDIT AGREEMENT

                                    Preamble

      This 6/04 Amendment to Credit Agreement dated as of June 24, 2004 (the
"6/04 AMENDMENT" or, within itself only, this "AMENDMENT") amending (for the
first time) the 3/04 Senior Secured Credit Agreement dated March 22, 2004 (the
"3/04 CREDIT AGREEMENT" and as amended hereby and as it may be supplemented,
further amended or restated from time to time, the "CURRENT CREDIT AGREEMENT"),
among SUNSET FINANCIAL RESOURCES, INC. (the "COMPANY"), a Maryland corporation
with its principal office at 10245 Centurion Parkway N, Suite 305, Jacksonville,
FL 32256, JPMORGAN CHASE BANK ("JPMORGAN"), a New York banking corporation,
acting herein as a Lender (as defined in SECTION 1.2 of the 3/04 Credit
Agreement) and agent and representative of the other Lenders (in that capacity
JPMorgan is called the "AGENT"), and such other Lenders as may from time to time
be party to the Current Credit Agreement, recites and provides as follows:

                                    Recitals

      The Company has asked the Lenders and the Agent to amend the 3/04 Credit
Agreement to add a sublimit for financing Commercial Mortgage Loans (up to
$5,625,000 of the Aggregate Committed Sum for Commercial Mortgage Loans secured
by Hospitality Property, $3,750,000 for those secured by Restaurant Property and
$18,750,000 for all Commercial Mortgage Loans) and make certain changes to the
sublimits for financing Single-family Mortgage Loans (increasing the sublimits
for Super Jumbo Mortgage Loans to 20% of the Aggregate Committed Sum and for
Non-owner Occupied Loans to 10% of the Aggregate Committed Sum and adding a
sublimit for Co-op Loans of 2.5% of the Aggregate Committed Sum), capitalized
terms used in these recitals being defined above, in SECTION 1 of the 3/04
Credit Agreement or in SECTION 1 of this Amendment, and the Lenders and the
Agent have agreed to do so on the terms and subject to the conditions of this
Amendment.

      If there is any conflict or inconsistency between these recitals and the
following agreements, the latter shall govern and control. If there is any
conflict or inconsistency between any of the terms or provisions of this
Amendment and any of the other Facilities Papers, this Amendment shall govern
and control. If there is any conflict between any provision of this Amendment
and any later supplement, amendment, restatement or replacement of the 3/04
Credit Agreement, the latter shall govern and control.

                                   Agreements

      In consideration of the premises, the mutual agreements stated below and
other good and valuable consideration paid by each party to each other party to
this Agreement, the receipt and sufficiency of which each hereby acknowledges,
the parties hereby agree as follows:

<PAGE>

                                  1 DEFINITIONS

      1.2   Definitions of General Application.

      A.    The following new definitions are hereby added to SECTION 1.2 of the
3/04 Credit Agreement, in alphabetical order:

            "APPROVED INVESTOR" means Ginnie Mae, Fannie Mae, Freddie Mac and
      any of the Persons listed on SCHEDULE 6/04-AI, as it may be supplemented
      or amended from time to time by agreement of the Company and the Agent;
      provided that if the Agent shall give written notice to the Company of the
      Agent's reasonable disapproval of any Approved Investor(s) named in the
      notice, the investor(s) named shall no longer be Approved Investor(s) from
      and after the time when the Agent sends that notice to the Company.

            "BOOK COMMERCIAL COLLATERAL VALUE" is defined in the definition of
      "Collateral Value".

            "CHANGE OF CONTROL" means:

            (a) any Person shall have acquired beneficial ownership (within the
      meaning of Rule 13d-3 of the Securities and Exchange Commission under the
      Exchange Act except that for purposes of this definition, a Person shall
      not be deemed to have acquired beneficial ownership of securities tendered
      pursuant to a tender or exchange offer made by or on behalf of such Person
      until such tendered securities are accepted for purchase or exchange),
      directly or indirectly, of either (i) Voting Stock of the Company (or
      other securities convertible into such Voting Stock) representing more
      than nine and nine-tenths percent (9.9%) of the combined voting power of
      all Voting Stock of the Company or (ii) more than nine and nine-tenths
      percent (9.9%) of the outstanding shares of any class or series of capital
      stock of the Company ; or

            (b) any Person shall have succeeded in having so many of such
      Person's nominees elected to the board of directors of the Company that
      such nominees, when added to any existing directors remaining on the board
      of directors of the Company after such election who were previously
      nominated by or are Affiliates of such Person, comprise a majority of the
      board of directors of the Company.

            "CO-OP LOAN" means a Single-Family Loan secured by the pledge of
      interests in a housing cooperative and a related cooperative housing unit
      lease.

      B.    The following definitions in SECTION 1.2 are hereby amended to
henceforth read as follows:

            "ADVANCE" means a disbursement by the Lenders under the Loan in
      accordance with the terms of this Agreement -- including initial
      disbursements,

                                       2

<PAGE>

      readvances of funds previously advanced to the Company and repaid to the
      Lenders and protective advances made without any requirement for any
      Request for Borrowing -- and is a correlative of "Borrowing": a Borrowing
      from the Lenders' and the Agent's point of view. Where "Swing Line"
      prefaces "Advance", then it means an Advance by JPMorgan under the Swing
      Line. Where "Dry" prefaces "Advance", then it means an Advance to finance
      Dry Loans (whether Single-family Loans, Commercial Mortgage Loans or
      both.) Where "Wet" prefaces "Advance", then it means an Advance to finance
      Wet Loans (only Single-family Loans are eligible to be financed as Wet
      Loans.) Each Advance shall be classified by the Agent as of its initial
      funding date as one or the other of the following Classes of Borrowings:

            (i)   a "SINGLE-FAMILY WAREHOUSING ADVANCE" meaning an Advance made
      to finance Dry Loans);

            (ii)  a "COMMERCIAL WAREHOUSING ADVANCE". meaning an Advance made to
      finance Eligible Commercial Collateral.

            "APPRAISAL" means:

            (i)   for Single-family Loans, an appraisal of the Mortgaged
      Premises that fully complies with all applicable Interagency Appraisal and
      Evaluation Guidelines adopted by the Federal Reserve System, the National
      Credit Union Administration, the Federal Deposit Insurance Corporation,
      the Office of Thrift Supervision and the Office of Comptroller of the
      Currency made by a licensed appraiser selected in accordance with Agency
      guidelines and not identified to the Company as an unacceptable appraiser
      by an Agency, and who is experienced in estimating the value of property
      of that same type in the community where it is located, and who -- unless
      approved by the Agent on a case-by-case basis -- is not a director,
      officer or employee of the Company or any Affiliate of the Company, or
      related as a parent, sibling, child or first cousin to any of the
      Company's or any such Affiliate's respective directors or officers or any
      of their spouses, a signed copy of the written report of which appraisal
      is in the possession of the Company or its Servicer; and

            (i)   for Commercial Mortgage Loans, a "market value" appraisal of
      the Mortgaged Premises that fully complies with all applicable Interagency
      Appraisal and Evaluation Guidelines adopted by the Federal Reserve System,
      the National Credit Union Administration, the Federal Deposit Insurance
      Corporation, the Office of Thrift Supervision and the Office of
      Comptroller of the Currency and conforms to the Uniform Standards of
      Professional Appraisal Practice promulgated by the Appraisal Foundation
      (www.appraisalfoundation.org) and is made by a licensed appraiser
      designated as an MAI Appraiser by the Appraisal Foundation and who is
      experienced in estimating the value of property of that same type in the
      community where it is located, and who -- unless approved by the Agent on
      a case-by-case basis -- is not a director, officer or employee of the

                                       3

<PAGE>

      Company or any Affiliate of the Company, or related as a parent, sibling,
      child or first cousin to any of the Company's or any such Affiliate's
      respective directors or officers or any of their spouses, a signed copy of
      the written report of which appraisal is in the possession of the Company
      or its Servicer.

            "BASIC PAPERS" means all of the Loan Papers that must be delivered
      to the Custodian -- in the case of Wet Loans, on or before the seventh
      (7th) Business Day after the related Advance -- in order for any
      particular item of Collateral to be Eligible Collateral and have
      Collateral Value. EXHIBIT C-1 to the Custody Agreement lists the Basic
      Papers for Single-family Collateral and EXHIBIT C-2 to the Custody
      Agreement lists the Basic Papers for Commercial Collateral, and reference
      is here made to the Custody Agreement for those listings.

            "BORROWING" is a correlative of "Advance": an Advance from the
      Company's point of view. Where "Swing Line" prefaces "Borrowing", then it
      means a Borrowing from JPMorgan under the Swing Line. Where "Dry" prefaces
      "Borrowing", then it means a Borrowing to finance Dry Loans (whether
      Single-family Loans, Commercial Mortgage Loans or both.) Where "Wet"
      prefaces "Borrowing", then it means a Borrowing to finance Wet Loans (only
      Single-family Loans are eligible to be financed as Wet Loans.)

            "CHANGE OF EXECUTIVE MANAGEMENT" means the occurrence of any event
      after which, without the Agent's prior written consent, any of John Bert
      Watson, Thomas G. Manuel, Byron L. Boston, Mike Pannell or Jeff Betros
      shall cease for any reason whatsoever, including death or disability, to
      be, and to continuously perform the duties of, President and Chief
      Executive Officer, Chief Operating Officer, Chief Investment Officer,
      Chief Financial Officer and Chief Marketing Officer, respectively, of the
      Company or, if such cessation shall occur as a result of death or
      disability, no successor satisfactory to the Agent, in its reasonable
      judgment, shall have become, and shall have commenced to perform the
      duties of, President and Chief Executive Officer, Chief Operating Officer,
      Chief Investment Officer, Chief Financial Officer and Chief Marketing
      Officer, respectively, of the Company within ninety (90) days after such
      cessation; provided that if any such satisfactory successor shall have
      been so elected and shall have commenced performance of such duties within
      such period, then the name of such successor or successors shall be deemed
      to have been inserted in place of John Bert Watson, Thomas G. Manuel,
      Byron L. Boston, Mike Pannell or Jeff Betros, as applicable, in this
      definition.

            "COLLATERAL" is any or all collateral (as the context requires) for
      the Obligations: Pledged Loans, their security, their related Loan Papers
      and the right to recover under the related Hazard Insurance Policies,
      consisting of the "SINGLE-FAMILY COLLATERAL", which means pledged
      Single-family Loans, their security, their related Loan Papers and the
      right to recover under the related Hazard Insurance Policies, and the
      "COMMERCIAL COLLATERAL", which means pledged Commercial Mortgage Loans,
      their security (including all assignments of rents

                                       4

<PAGE>

      and assignments of leases), their related Loan Papers and the right to
      recover under the related Hazard Insurance Policies.

            "COLLATERAL VALUE" means the value of Eligible Collateral for
      purposes of this Agreement. Collateral (i) that is not duly Pledged to the
      Agent, (ii) in which the Agent does not have a first and prior perfected
      Lien (except that in the case of Wet Loans Pledged to the Agent for seven
      (7) or less Business Days, the fact that the Agent does not have
      possession, directly or through the Custodian, of the Basic Papers
      therefor shall not affect such Wet Loans' Collateral Value) or (iii) that
      is not Eligible Collateral because it does not satisfy in all material
      respects one or more of the conditions to eligibility stated for it in
      this Agreement, shall have zero Collateral Value, and Collateral that at
      one time satisfied all conditions for eligibility but for which a
      Disqualifier has occurred shall have zero Collateral Value from the date
      of that Disqualifier unless and until the Company has cured all applicable
      Disqualifiers or the Agent has waived them in writing; provided that the
      reduction for any reason of the Collateral Value of any Collateral that is
      Pledged to the Agent shall not itself affect or impair the Agent's
      security interest in that Collateral. Collateral Values of the two types
      of Eligible Collateral, duly Pledged to the Agent with the Agent having
      Lien priority and perfection as aforesaid and as to which no such uncured
      or unwaived Disqualifier has occurred, shall be determined as follows:

            (a)   The "SINGLE-FAMILY COLLATERAL VALUE"on any day of any Eligible
      Single-family Collateral, whether a Dry Loan or a Wet Loan, shall be its
      "BOOK SINGLE-FAMILY COLLATERAL VALUE", which is the least of:

                  (i)   ninety-eight percent (98%) of such Pledged Loan's
      Principal Balance on that day;

                  (ii)  for a pledged Single-family Loan originated by any
      Affiliate of the Company, ninety-eight percent (98%) of the loan amount at
      origination less discount points received by such Affiliate, as stated on
      the Pledged Loan's HUD-1 Settlement Statement;

            (iii) for a pledged Single-family Loan directly or indirectly
      acquired by the Company from a mortgage broker or a correspondent that is
      not an Affiliate of the Company, ninety-eight percent (98%) of the net
      purchase price paid therefor by the Company (i.e., net of all origination
      fees, discounts, refunds and rebates, however and whenever credited or
      payable to the Company and without regard, however, to any servicing
      release premium paid by the Company); and

            (iv)  (only for a pledged Single-family Loan covered by a Purchase
      Commitment) the purchase price that the Approved Investor has committed to
      pay for such Pledged Loan;

                                       5

<PAGE>

      provided that if the Agent or the Required Lenders shall elect to mark it
      to market, such Pledged Loan's Collateral Value for that day shall be the
      lesser of (x) its Book Single-family Collateral Value or (y) ninety-seven
      percent (97%) of its Market Value on that day.

            (b)   The "COMMERCIAL COLLATERAL VALUE" on any day of any Eligible
      Single-family Collateral, whether a Dry Loan or a Wet Loan, shall be its
      "BOOK COMMERCIAL COLLATERAL VALUE", which is the least of:

                  (i)   fifty percent (50%) of such pledged Commercial Mortgage
      Loan's Principal Balance on that day;

                  (ii)  for a pledged Commercial Mortgage Loan originated by the
      Company or any Affiliate of the Company, fifty percent (50%) of the loan
      amount at origination less discount points received by such Affiliate, as
      stated on such pledged Commercial Mortgage Loan's closing or settlement
      statement;

            (iii) for a pledged Commercial Mortgage Loan directly or indirectly
      acquired by the Company from a mortgage broker or a correspondent that is
      not an Affiliate of the Company, fifty percent (50%) of the net purchase
      price paid therefor by the Company (i.e., net of all origination fees,
      discounts, refunds and rebates, however and whenever credited or payable
      to the Company and without regard, however, to any servicing release
      premium paid by the Company); and

            (iv)  (only for a pledged Commercial Mortgage Loan covered by a
      Purchase Commitment) fifty percent (50%) of the purchase price that the
      Approved Investor has committed to pay for such Pledged Loan;

      provided that if the Agent or the Required Lenders shall elect to mark it
      to market, such pledged Commercial Mortgage Loan's Collateral Value for
      that day shall be the lesser of (x) its Book Commercial Collateral Value
      or (y) fifty percent (50%) of its Market Value on that day.

            (c)   The Collateral Value of any other type of Collateral shall be
      as is reasonably determined by the Agent.

      The applicable percentage factor (stated above) for determining the value
      of any particular item of Collateral is the "ADVANCE RATE" for that
      Collateral. Each of such values shall be as determined by the Agent --
      which may accept as correct any value proposed by the Company that is not
      obviously and materially incorrect on its face -- and each determination
      by the Agent of Collateral Value (and of each element of each such
      determination, including Market Value) may be computed using any
      reasonable averaging, interpolation and attribution method and, absent
      manifest error, shall be conclusive and binding.

            "COMMERCIAL COLLATERAL" is defined in the definition of
      "Collateral".

                                       6

<PAGE>

            "COMMERCIAL MORTGAGE LOAN" means a Mortgage Loan secured by a first
      lien Mortgage on Mortgaged Premises that are Eligible Commercial Property
      with a Principal Balance of at least One Million Dollars ($1,000,000) or
      such lesser amount as may be approved by the Agent on a case-by-case
      basis, and not more than Fifteen Million Dollars ($15,000,000).

            "CUMULATIVE LOAN-TO-VALUE RATIO" means:

            (i)   as to any Single-family Loan, the ratio of:

                        (x)   the sum of (i) the original principal amount of
      the Mortgage Note that is Pledged to the Agent and (ii) the original
      principal sums of all other Mortgage Notes (if any) secured by a mortgage
      Lien on the same Mortgaged Premises as are the security for such pledged
      Mortgage Note;

            to          (y)   the fair market value of such Mortgaged
      Premises, as such value is shown in the most recent Appraisal or the most
      recent Current Broker's Price Opinion (whichever is less); and

            (ii)  as to any Commercial Mortgage Loan, the ratio of:

                        (x)   the sum of (i) the original principal amount of
      the Mortgage Note that is Pledged to the Agent and (ii) the original
      principal sums of all other Mortgage Notes (if any) secured by a mortgage
      Lien on the same Mortgaged Premises as are the security for such pledged
      Mortgage Note;

            to          (y)   the fair market value of such Mortgaged Premises,
      as such value is shown in the most recent Appraisal.

            "DRY LOAN" means a Pledged Loan acquired and owned by the Company
      that has been closed, funded and qualifies without exception as Eligible
      Single-family Collateral, including satisfying the requirement that all of
      its Basic Papers have been delivered to the Custodian, and the adjective
      "DRY" means that a Pledged Loan is a Dry Loan.

            "ELIGIBLE COMMERCIAL COLLATERAL" is defined on SCHEDULE EC.

            "ELIGIBLE COMMERCIAL PROPERTY" means fee title or the ground
      leasehold estate in and to U.S. real property designed for use, and being
      currently used, as:

            (a)   "CONDOMINIUM PROPERTY", meaning a building or buildings that
      has been made subject to a residential or commercial condominium regime,
      dividing it into individual condominium units and their common elements;

            (b)   "HOSPITALITY PROPERTY", meaning as hotel or resort property;

                                       7

<PAGE>

            (c)   "INDUSTRIAL PROPERTY", meaning as manufacturing or other
      industrial use property;

            (d)   "MULTIFAMILY PROPERTY", meaning as residential rental
      apartments;

            (e)   "OFFICE PROPERTY", meaning as rental commercial office
      facilities;

            (f)   "RETAIL PROPERTY", meaning as retail shopping facilities;

            (g)   "STORAGE FACILITIES PROPERTY", meaning as warehouse
      facilities; or

            (h)   "RESTAURANT PROPERTY", meaning as retail food (with beverages)
      service facilities.

            "IN DEFAULT" means that, as to any Mortgage Loan, any Mortgage Note
      payment or escrow payment is unpaid for one (1) day -- thirty-five (35)
      days for Commercial Mortgage Loans -- or more after its due date (whether
      or not the Company has allowed any grace period or extended the due date
      thereof by any means) or another material default has occurred and is
      continuing, including the commencement of foreclosure proceedings or the
      commencement of a case in bankruptcy for any Customer under such Mortgage
      Loan.

            "LIQUIDITY" means the Company's unencumbered cash and Cash
      Equivalents plus (x) the lesser of the book value or the par value of
      Eligible Collateral that has either not been pledged to the Agent or any
      other Person or otherwise encumbered and (y) the sum of the unused
      borrowing availability under this Agreement or any of the Company's other
      committed credit agreements to the extent (if any) that the collateral
      value of eligible Single-family Collateral that has been pledged to secure
      the Company's debt to the lenders under such credit agreements exceeds the
      outstanding borrowings thereunder.

            "LONG WAREHOUSED (AGED) LOAN" or "AGED LOAN" means a Single-family
      Loan whose Original Pledge Date was more than one hundred twenty (120)
      days, but not more than one hundred eighty (180) days, before the relevant
      Determination Date (being the date on or for which such Mortgage Loan's
      Collateral Value is being determined). A pledged Single-family Loan whose
      Original Pledge Date was more than one hundred eighty (180) days before
      the relevant Determination Date shall have zero Collateral Value.

            "NON-OWNER OCCUPIED LOAN" means a Single-family Loan whose Mortgaged
      Premises are not occupied by one of the relevant Customers as either his
      or her primary residence or second home.

            "PERMITTED ENCUMBRANCES" means in respect of the Mortgaged Premises
      securing a Pledged Loan, (i) tax Liens for real property taxes and
      government-

                                       8

<PAGE>

      improvement assessments that are not delinquent; (ii) easements and
      restrictions that do not materially and adversely affect the title to or
      marketability of the Mortgaged Premises or prohibit or interfere with the
      use of the Mortgaged Premises as (for Single-family Loans) a one-to-four
      family residential dwelling or (for Commercial Mortgage Loans) Eligible
      Commercial Property use; (iii) reservations as to oil, gas or mineral
      rights, provided such rights do not include the right to remove buildings
      or other material improvements on or near the surface of the Mortgaged
      Premises or to mine or drill on the surface thereof or otherwise enter the
      surface for purposes of mining, drilling or exploring for, or producing,
      transporting or otherwise handling oil, gas or other minerals of any kind;
      (iv) agreements for the installation, maintenance or repair of public
      utilities, provided such agreements do not create or evidence Liens on the
      Mortgaged Premises or authorize or permit any Person to file or acquire
      claims of Liens against the Mortgaged Premises and (v) such other
      exceptions (if any) as are acceptable under relevant Agency guidelines.

            "QUALIFYING COMMERCIAL MORTGAGE LOAN GUARANTY" means the written
      unconditional and irrevocable guaranty of the full and timely payment of
      all principal of and interest on a Commercial Mortgage Loan by a Person
      who has a FICO score of at least 630 and whose current financial
      statements furnished to the Borrower show that such Person has personal
      liquidity sufficient for timely payment in full of such guaranteed
      obligation.

            "WET LOAN" means a pledged Single-family Loan acquired and owned by
      the Company:

            (a)   that has been closed by a title agency or closing attorney,
      funded and would qualify without exception as Eligible Collateral except
      that some or all of its Basic Papers are in transit to, but have not yet
      been received by, the Custodian so as to satisfy all requirements to
      permit the Company to borrow against it pursuant to this Agreement without
      restriction;

            (b)   that the Company reasonably expects to fully qualify as
      Eligible Collateral when the original Basic Papers have been received by
      the Custodian;

            (c)   as to which the Company actually and reasonably expects that
      such full qualification can and will be achieved on or before seven (7)
      Business Days after an Advance against such item of Collateral is
      requested and made under this Agreement (and the Company hereby agrees to
      take such steps as are reasonably necessary to ensure it achieves full
      qualification as Eligible Collateral); and

            (d)   for which the Company has delivered to the Custodian a
      Warehouse Transmission File on or before the date of the related Advance,
      submission of which to the Custodian shall constitute the Company's
      certification to the Custodian, the Agent and the Lenders that a complete
      File as to such item of Collateral, including the Basic Papers, exists and
      that such File is in the

                                       9

<PAGE>

      possession of either the title agent or closing attorney that closed such
      Pledged Loan, the Company or the Company's Servicer for such Pledged Loan,
      or that such File has been shipped to the Custodian;

      and the adjective "WET" means that a Pledged Loan is a Wet Loan.

      Each Wet Loan that satisfies the requirements set forth in CLAUSES (a)
      through (d) above shall be Eligible Collateral subject to the condition
      subsequent of physical delivery of its Mortgage Note, Mortgage and all
      other Basic Papers, together with a Collateral Confirmation Agreement, to
      the Custodian within seven (7) Business Days after funding of the related
      Borrowing. Each Wet Loan against which the Company requests an Advance
      shall be irrevocably deemed Pledged to the Agent and shall automatically
      become pledged Collateral effective on the date of the related Request for
      Borrowing, and the Company shall take all steps necessary or appropriate
      to cause the pledge to the Agent and delivery to the Custodian of such Wet
      Loan and its Basic Papers to be completed, perfected and continued in all
      respects, including causing the original promissory note evidencing such
      pledged Collateral to be physically delivered to the Custodian within
      seven (7) Business Days after the funding of the Advance, whether or not
      the related Advance is sooner paid, and, if requested by the Agent, to
      give written notice to any title agent, closing attorney or other Person
      in possession of the Basic Papers for such Collateral of the Agent's
      security interest in it and its security. Upon the Custodian's receipt of
      the Basic Papers relative to a Wet Loan accompanied by a Collateral
      Confirmation Agreement, such Collateral shall no longer be subject to this
      Agreement's limitations applicable to Wet Loans (and, as provided in the
      Custody Agreement, the conversion from Wet Loan status to Dry Loan status
      shall be made on the same Business Day if the Basic Papers and Collateral
      Confirmation Agreement are received by the Custodian by 11:00 AM, or on
      the next Business Day if received after 11:00 AM.)

      C.    The following definitions are hereby deleted from SECTION 1.2:

            "INVESTOR LOAN"

            "LATE PLEDGED (SEASONED) LOAN"

      D.    EXHIBIT 6/04-B hereto replaces EXHIBIT B to the 3/04 Credit
Agreement, and SCHEDULES 6/04-DQ and 6/04-EC hereto replace SCHEDULES DQ and EC
to the 3/04 Credit Agreement

      1.3.  Definitions for Interest Calculations.

      A.    The following new definitions are hereby added to SECTION 1.3, in
alphabetical order:

                                       10

<PAGE>

      "CLASS OF BORROWINGS" means a grouping or categorization of Borrowings by
      the particular Category of Collateral that they were made to finance, i.e.
      either (i) Single-family Warehousing Advances to finance Eligible
      Single-family Collateral or (ii) Commercial Warehousing Advances to
      finance Eligible Commercial Collateral.

      "MARGIN" means the interest rate margin to be added to a specified Index
      to determine a Rate. The margins used in this Agreement are the "LIBOR
      MARGIN", which is applicable to Advances for each Class of Borrowings on
      each day that the Loan bears interest at the Base Rate, and the "ABR
      MARGIN" applicable to Advances for each Class of Borrowings on each day
      that the Loan bears interest at the Alternate Base Rate. For each Class of
      Borrowings that is described on a row in the first column of the following
      table, the applicable interest rate Margins are stated on the same row:

<TABLE>
<CAPTION>
            CLASS OF BORROWINGS/MARGIN                 LIBOR MARGIN          ABR MARGIN
            --------------------------                 ------------          ----------
<S>                                                    <C>                   <C>
Single-family Warehousing Advances (to finance            1.125%               0.125%
Eligible Single-family Collateral)
Commercial Warehousing Advances (to finance Eligible       2.75%                1.75%
Commercial Collateral)
</TABLE>

      B.    The following definitions in SECTION 1.3 are hereby amended to
henceforth read as follows:

            "ABR MARGIN" is defined in the definition of "Margin".

            "EURODOLLAR RESERVE REQUIREMENTS" means for any day or time period,
      the stated maximum rate (expressed as a decimal fraction) for all reserves
      required to be maintained for that day or during that period (including
      basic, supplemental, marginal and emergency reserves) against
      "eurocurrency liabilities", as defined in Regulation D, all as specified
      by any Governmental Authority, including those imposed under Regulation D.
      Each determination of Eurodollar Reserve Requirements by the Agent may be
      computed using any reasonable method and, absent manifest error, shall be
      conclusive and binding.

            "LIBOR MARGIN" is defined in the definition of "Margin".

      CLAUSE (d) of the definition of "Rate" is hereby amended to henceforth
read as follows:

            (d)   the "PAST DUE RATE" which means, on any day, the lesser of:

              (i) the Prime Rate for that day plus two percent (2%) per annum;
      and

                                       11

<PAGE>

                  (ii)  the Ceiling Rate for that day.

            "STATED RATE" means, for all outstanding Borrowings for any day:

            (a)   the Base Rate for that day, computed in accordance with the
      provisions of this Agreement, compounded annually, unless the Borrower has
      duly elected in accordance with SECTION 1.1(b) that all Loan Principal
      bear interest at the Alternate Base Rate;

            (b)   if the Borrower has duly elected in accordance with SECTION
      1.1(b) that all Loan Principal bear interest at the Alternate Base Rate
      and has not subsequently duly elected in accordance with SECTION 1.1(c)
      that all Loan Principal bear interest at the Base Rate, the Alternate Base
      Rate for that day, computed in accordance with the provisions of this
      Agreement, compounded annually;

      provided that if on any day the applicable rate for the Loan as a whole
      shall exceed the relevant Ceiling Rate for that day, then the Stated Rate
      therefor shall be reset to equal the Ceiling Rate on that day and shall be
      set to equal the Ceiling Rate for each day thereafter until the total
      amount of interest accrued at the Stated Rate on the unpaid balance of the
      Loan equals the total amount of interest that would have accrued on it if
      there were no Ceiling Rate.

      C.    The following definitions are hereby deleted from SECTION 1.3:

            "ALTERNATE BASE RATE TRANCHE"

            "BASE RATE TRANCHE"

            "INTEREST RATE OPTION"

            "INTEREST RATE SELECTION CONFIRMATION"

            "TRANCHE"

                         3 GENERAL BORROWING PROCEDURES

      SECTION 3 of the 3/04 Credit Agreement is hereby amended to henceforth
read as follows:

            3.1   Separate Request for Each Borrowing. A separate Request for
      Borrowing shall be made for each Borrowing, which, when appropriately
      completed and, if new Collateral is being pledged, with a Submission List
      attached, may include requests for Borrowings to finance either of the two
      types of Eligible Collateral ((i) Wet or Dry Prime Loans or Alt-A Loans or
      (ii) Dry Commercial Mortgage Loans).

                                       12

<PAGE>

            3.2   Funding of Single-family Advances.

                  (a)   Deadline for Requests to be Funded as Regular Advances.
      If a Request for Borrowing is received before 3:00 PM(1) (Central time, as
      stated in SECTION 1.4(c)) -- 4:00 PM(1) for any Request for Borrowing that
      requests only a Wet Single-family Advance and is Electronically Submitted
      -- on a Business Day and fully qualifies in all respects for funding as a
      regular Advance by the Lenders (including satisfying any applicable
      requirement of SECTION 3.3), it shall be funded as a regular Single-family
      Advance on that same Business Day.

  (The following provisions of this Section 3.2 are inapplicable until a Lender
            or Lenders in addition to JPMorgan joins this Agreement)

                  (b)   Deadline for Requests for Single-family Advances to be
      Funded as Swing Line Advances. If, after a Lender or Lenders in addition
      to JPMorgan joins this Agreement, the requirements of SECTIONS 2.6 and 3.3
      are satisfied and a Request for Borrowing is received on a Business Day
      after 3:00 PM but before 4:00 PM, JPMorgan shall fund the Single-family
      Advance requested by making a Swing Line Advance on that same day.

                  (c)   Deadline for Requests for Single-family Advances to be
      Funded as Regular Advances. If a Request for Borrowing is received before
      12:00 noon (Central time, as stated in SECTION 1.4(c) -- 1:00 PM for any
      Request for Borrowing that requests only a Wet Single-family Advance and
      is Electronically Submitted -- on a Business Day and fully qualifies in
      all respects for funding as a regular Advance by the Lenders (including
      satisfying any applicable requirement of SECTION 3.5), it shall be funded
      as a regular Single-family Advance on that same Business Day.

                  (d)   Late Requests. If, after a Lender or Lenders in addition
      to JPMorgan joins this Agreement, a Request for Borrowing is received by
      JPMorgan later than 4:00 PM on a Business Day, JPMorgan shall either, at
      its election, (i) fund the Single-family Advance requested by making a
      Swing Line Loan either on that same day or, at JPMorgan's election, on the
      next Business Day, or (ii) arrange for its funding on the next Business
      Day as a regular Single-family Advance. JPMorgan shall have no obligation
      to fund any such late-requested Single-family Advance as a Swing Line
      Advance if all of the requirements of SECTIONS 2.6 and 3.6 are not
      satisfied, although JPMorgan may elect to do so. If JPMorgan does not
      elect to do so, then the Lenders shall fund such requested Single-family
      Advance as a regular Advance on such next succeeding Business Day after
      the Request for Borrowing is received by the

--------------------------
(1) These times will change to 12:00 noon and 1:00 PM, respectively, if and when
another Lender joins the Current Credit Agreement.

                                       13

<PAGE>

      Agent, provided that all conditions to its funding (including the
      requirements of SECTION 3.6) are then satisfied.

                  (e)   Repayment of Swing Line Borrowings. Each Swing Line
      Advance shall be repaid on its Swing Line Borrowing Due Date by the
      Agent's paying over to JPMorgan out of the Note Payment Account, and
      JPMorgan's applying against such outstanding Swing Line Borrowing, an
      amount equal to the proceeds of the Funding Shares funded by all of the
      other Lenders on that day against the same Request for Borrowing that was
      initially funded by such Swing Line Advance. If at the time such Swing
      Line Advance was funded, JPMorgan reasonably believed that no Default or
      Event of Default had occurred and was then continuing and that all of the
      other conditions set forth in SECTION 2.6 for such Swing Line Advance were
      satisfied in all material respects, the other Lenders shall be
      unconditionally and irrevocably obligated to timely fund their respective
      Funding Shares of the Single-family Advance that was so initially funded
      as a Swing Line Advance, to repay to JPMorgan (and thereby refinance) on
      the relevant Swing Line Borrowing Due Date all of that Swing Line Advance
      except only JPMorgan's Funding Share of it, irrespective of whether in the
      meantime any Default or Event of Default has occurred or been discovered,
      and irrespective of whether in the meantime some or all of the Lenders'
      Commitments have lapsed, expired or been canceled, rescinded or terminated
      with or without cause, or have been waived, released or excused for any
      reason whatsoever, so that (i) the principal of the Swing Line is paid
      down by the required amount on each Swing Line Borrowing Due Date-- all
      accrued interest on Swing Line Advances shall be due and payable by the
      Company to the Agent (for distribution from the Note Payment Account to
      JPMorgan) on the later of (x) the fifteenth (15th) day of the next month
      (with the first interest payment due July 15, 2004) or (y) two (2)
      Business Days after the Agent bills the Company for such accrued
      interest-- (ii) all Swing Line Advances are converted to regular Advances
      from the Lenders and (iii) those Advances are evidenced by the Senior
      Credit Notes other than the Swing Line Note. If any Lender fails to
      provide its funds to JPMorgan to repay its share of any Swing Line Loan
      when due (including any such failure caused by a fed funds wire delay),
      then that Lender shall also be obligated to pay to JPMorgan interest on
      the unpaid balance of principal so due to JPMorgan at the Federal Funds
      Effective Rate from such due date until three (3) Business Days after such
      due date, and at the Federal Funds Effective Rate plus two percent (2%)
      from three (3) Business Days after such due date until the date of payment
      of such principal sum.

            3.4   Funding of Commercial Advances.

                  (a)   Deadline and Requirements for Requests for Commercial
      Advances. Requests for Borrowing for Commercial Advances shall be
      submitted to the Agent at least ten (10) Business Days before the
      requested funding date, and will include:

                        (1)   the requested funding date;

                                       14

<PAGE>

                        (2)   the purchase price to be paid for the Mortgaged
      Premises that will secure the related Commercial Mortgage Loan;

                        (3)   the complete underwriting package required
      pursuant to the Company's underwriting guidelines and requirements,
      including a copy of the complete Appraisal;

                        (4)   a copy of the Purchase Commitment or Qualifying
      Commercial Mortgage Loan Guaranty that will cover or guarantee payment of
      the related Commercial Mortgage Loan;

                        (5)   copies of any environmental and regulatory due
      diligence reports regarding the related Mortgaged Premises; and

                        (6)   the Company's narrative statement of its strategy
      for disposition or satisfaction of the proposed Commercial Mortgage Loan
      and full recovery of the amount list plus accrued interest.

      The Agent shall either approve or disapprove the proposed Commercial
      Borrowing and notify the Company of its decision on or before five (5)
      Business Days before the proposed funding date of the related Commercial
      Mortgage Loan specified in the Request for Borrowing submitted at least
      ten (10) Business Days before such proposed funding date, and if the Agent
      approves it, the Company shall confirm to the Agent in writing at least
      two (2) Business Days before the funding date the Company's written
      confirmation that such Commercial Mortgage Loan will be made, specifying
      any terms and conditions that are different from or in addition to those
      specified in the initial Request for Borrowing and stating that all
      conditions precedent to the transaction are consistent with this
      Agreement.

      3.5   Syndication of Advances.

                  (a)   When a Request for Borrowing is received by the Agent,
      the Agent shall give notice by fax or, at the Agent's discretion, email to
      each Lender of that requested Advance and that Lender's Funding Share of
      the requested Advance by 2:00 PM on the Business Day when the requested
      Advance is to be funded by the Lenders, and each Lender shall cause its
      Funding Share thereof to be transferred to the Agent by fed funds wire
      transfer to:

            JPMorgan Chase Bank
            ABA number 1130-0060-9
            Attention: Mortgage Warehousing -- Wanda Carr
            Phone:  (713) 427-6391
            For credit to:  Sunset Financial Resources, Inc.
            Account No. 00100381681
            JPMorgan Chase Real Estate Wire Transfer Clearing Account

                                       15

<PAGE>

      within two (2) hours after receiving such notice from the Agent or by 4:00
      PM, whichever is earlier, so that the Agent receives it in good collected
      Houston funds on that same Business Day, and the Agent shall deposit such
      Funding Shares into the Note Payment Account when received.

                  (b)   If the Agent has not already funded the requested
      Advance as a Swing Line Advance (Swing Line funding is available only for
      Single-family Advances), then (provided no Default has occurred that has
      not been cured by the Company or waived in writing by the Agent and no
      Event of Default has occurred that the Agent has not declared in writing
      to have been either cured or waived) the Agent shall disburse such Advance
      to the Company or to its designee(s) for their account.

                  (c)   If the Agent has funded the requested Advance (or any
      part of it) as a Swing Line Advance, then the Agent shall repay JPMorgan
      the related Swing Line Advance (except for JPMorgan's own Funding Share
      thereof) from the Note Payment Account; provided that if a Lender other
      than JPMorgan advises the Agent by telephone and confirms the advice by
      fax that the Lender has placed all of its Funding Share on the federal
      funds wire to the Agent, the Agent shall continue to keep the Swing Line
      Advance outstanding to the extent of that Lender's Funding Share so wired
      until the Agent has actually received such share-- whereupon the Agent
      shall deposit such Funding Share when received into the Note Payment
      Account and repay JPMorgan that still-outstanding portion of the Swing
      Line Advance from the Note Payment Account-- except that the Agent shall
      have no obligation to continue such portion of any Swing Line Advance
      outstanding if and to the extent, if any, that doing so would cause the
      total amount funded by the Agent and outstanding to exceed the Swing Line
      Limit.

            3.6   Time When Submission List(s) and New Collateral Papers (If
      Any) Due. Unless the Borrowing Base already has sufficient Collateral
      Value to support both the requested Borrowing and all other outstanding
      Borrowings, the Company shall (1) deliver to the Agent with the Request
      for Borrowing one or more signed Submission Lists listing (i) all new
      Collateral then being Pledged to the Agent to support such Borrowing and
      (ii) the values of the elements for determining the Book Single-family
      Collateral Value of the new Collateral (such elements being described in
      clauses (i), (ii) and (iii) of the definition of "Collateral Value"), and
      (2) other than for Wet Loans, cause to be delivered to the Custodian all
      of the Basic Papers relating to the items of new Collateral listed in such
      Submission List(s), by the following deadlines:

<TABLE>
<CAPTION>
IF THE NUMBER OF        THEN THE SUBMISSION LIST AND BASIC      AT THIS TIME (IN
FILES SUBMITTED IS:           PAPERS ARE DUE ON:                    HOUSTON)
-------------------  ----------------------------------------   ----------------
<S>                  <C>                                        <C>
50 files or less     the same  Business Day as the Request      10:00 AM
                     for  Borrowing  is  received  by  the
                     Agent

51-100 files         the preceding Business Day                 2:00 PM

for each additional  one additional prior Business Day          2:00 PM
100 files increment
</TABLE>

                                       16

<PAGE>

            3.7   If Outstanding Advances Would Exceed the Borrowing Base. If,
      after giving effect to a requested Borrowing, the outstanding Borrowings
      would exceed the Borrowing Base, or if the Agent or the Custodian
      determines (either then or on any later day in the course of reviewing the
      same) that any such Submission List or Basic Papers submitted to it are
      incomplete or incorrect in any material respect (provided that if the
      Custodian reasonably determines that such a condition of incompleteness or
      incorrectness of Basic Papers is correctable and returns the subject Basic
      Papers to the Company for corrective action, then the affected Pledged
      Loan(s) shall not be excluded from the Borrowing Base unless and until the
      Company fails to correct and return such Basic Papers to the Custodian
      within ten (10) Business Days after the Custodian sent them) then:

                  (a)   the Agent may withhold the entire Advance until the
      Company shall have demonstrated to the Custodian's reasonable satisfaction
      that all required Basic Papers submitted (if any), are in fact not (or are
      no longer) incomplete or incorrect in any material respect; or

                  (b)   in the case of a Borrowing Base insufficiency, unless
      the Company instructs the Agent in writing not to fund any of the
      requested Borrowing, and subject to the provisions and limitations of
      SECTIONS 2.1 and 2.5, the Agent will fund such lesser amount(s) as the
      Agent shall determine is (are) supported by the Borrowing Base and will
      notify the Company of such insufficiency, including the Agent's
      calculation of such insufficiency set forth in reasonable detail.

            3.8   If a Request for Borrowing or New Collateral Papers are
      Received Late; Waiver of Claim for Any Late Funding. If either a Request
      for Borrowing or the Basic Papers for any new Collateral and its related
      Submission List are submitted late, the Agent will use reasonable efforts
      to make the requested Advance as a Swing Line Advance on the same Business
      Day it is requested, although neither the Company nor any other Person
      shall have any claim or cause of action against the Agent or any of the
      Lenders if for any reason that funding (or any other funding) does not
      occur on the same day it is requested.

                     5 INTEREST, PRINCIPAL AND FEES PAYMENTS

      SECTION 5.2 of the 3/04 Credit Agreement is hereby amended to henceforth
read as follows:

            5.2   Interest Rates.

                  (a)   Subject to the following rules, and as contemplated in
      the definition of "Stated Rate", unless the Company has made a valid
      election that the

                                       17

<PAGE>

      Loan principal outstanding bear interest at the Alternate Base Rate, the
      principal of each Borrowing outstanding on any day when no Event of
      Default has occurred and is continuing shall bear interest from the date
      such Borrowing is funded until repaid in full at the Base Rate applicable
      from time to time (compounded annually).

                  (b)   The Company may elect that all Loan principal then or
      thereafter outstanding bear interest at the Alternate Base Rate by giving
      the Agent telephonic notice not later than 10:00 AM on the effective date
      of such election, specifying the Business Day when the election is to
      become effective and confirming the telephonic notice in writing by not
      later than the close of business on the same day.

                  (c)   If the Company has elected the Alternate Base Rate, the
      Company may thereafter elect that all Loan Principal again bear interest
      at the Base Rate by giving the Lender telephonic notice not later than
      10:00 AM on the effective date of such election, specifying the Business
      Day when the election is to become effective and confirming the telephonic
      notice in writing by not later than the close of business on the same day.

                        (1)   Notwithstanding any contrary or inconsistent
      provision of this SECTION 5.2, all Loan principal outstanding shall bear
      interest at the Past Due Rate from the date of occurrence of any Event of
      Default and until it has been declared in a writing signed by the Lender
      to have been cured or waived and its material consequences (if any) have
      been wholly cured.

      SECTION 5.3(a) is hereby amended to henceforth read as follows:

                  (a)   Promptly upon the Company's becoming entitled and able
      to collect the proceeds of any sale or other disposition of Collateral, or
      upon the Company's receiving any regularly scheduled payments or
      prepayments of principal of any pledged Commercial Mortgage Loan, a
      principal amount equal to the amount so collectable or received shall be
      due and payable by the Company to the Agent -- although, pursuant to the
      provisions of SECTION 6.10, the Agent's security interest in such
      Collateral or its proceeds shall not be released unless and until the
      Agent has received for deposit into the Note Payment Account the
      Redemption Amount for such Collateral -- and the Company shall cause the
      entirety of all available Collateral disposition proceeds and all such
      pledged Commercial Mortgage Loan principal payments and prepayments to be
      paid to the Agent (or if the Company receives them, the Company shall pay
      them over to the Agent), with each such payment to be applied first
      against the principal of Borrowings outstanding under the Swing Line, then
      against the principal of Borrowings outstanding under the Credit Line, and
      with the remaining balance (if any) to be transferred from the Note
      Payment Account into the Company's own account with JPMorgan (unless
      either (i) any payment of principal or interest on the Obligations shall
      then be past due, in which event the Agent may first apply such excess to
      pay such past due amount and transfer only the balance, if any,

                                       18

<PAGE>

      remaining after such application to the Company's own account, or (ii) an
      Event of Default has occurred that the Agent has not declared in writing
      to have been either waived or cured, in which event the Agent shall hold
      such excess as Collateral and apply it in accordance with the provisions
      of SECTION 11.4.) With or after each such payment, the Company shall
      furnish the Agent and the Custodian with a written reconciliation of the
      amounts collected by the Company with the amount received by the Agent.

                                  6 COLLATERAL

      6.1   Grant of Security Interest. As security for the payment of the Loan
and for the payment and performance of all of the Obligations, the Company
hereby grants to the Agent, as agent and representative of the Lenders, a first
priority security interest in all of the Collateral.

      SECTIONS 6.1(a) and 6.1(a)(1) are hereby amended to henceforth read as
follows:

                  (a)   Single-family Collateral and Commercial Collateral.

                        (1)   all Pledged Loans, including pledged Single-family
      Loans and pledged Commercial Mortgage Loans;

                                8 REPRESENTATIONS

      SECTION 8.15 is amended to substitute the following as the Company's
address:

      10245 Centurion Parkway N, Suite 305, Jacksonville, FL 32256

      The second line of SECTION 8.17(m) is hereby amended to read as follows:

      or (for Single-family Loans) such other form of title insurance as is
      acceptable to Fannie Mae

      SECTION 8.17(t) is hereby amended to read as follows:

            (t)   The Company's acquisition, disposition and collection
      practices with respect to Mortgage Loans are and have been in all material
      respects in accordance with industry custom and practice, and in all
      respects legal and proper.

      The first line of SECTION 8.17(z) is hereby amended to read as follows:

            (z)   No Mortgaged Premises securing any Pledged Loan is within a

      SECTION 8.17(cc)(12) is hereby amended to read as follows:

                                       19

<PAGE>

                        (12)  (for Single-family Loans) are secured by
      Single-family residential property or (for Commercial Mortgage Loans)
      Eligible Commercial Property;

      SECTION 8.17(ff) is hereby amended to read as follows:

                  (ff)  No default, and no event that with notice or lapse of
      time or both would become a default, has occurred and is continuing under
      any item of Collateral except as to which the Company has given notice to
      the Agent, or will give such notice in the next report of Pledged Loans
      that are In Default, as required by SECTION 9.4(b).

      A new SECTION 8.17(ii) is hereby added, reading as follows:

                  (ii)  as of the Effective Date, either (i) to the best
      knowledge of the Company, no Mortgaged Premises securing a Commercial
      Mortgage Loan are subject to an environmental hazard that would have to be
      eliminated under applicable law before the sale of, or which could
      otherwise affect the marketability of, such Mortgaged Premises or which
      would subject the owner or operator of such Mortgaged Premises or a lender
      secured by such Mortgaged Premises to liability under applicable Law, and
      there are no Liens that relate to the existence of any clean-up of a
      hazardous substance (and to the best of the Company's knowledge, no
      circumstances exist that under applicable Law would give rise to any such
      Lien) affecting the Mortgaged Premises which are or may be Liens prior to
      or on a parity with the lien of the related Mortgage or (ii) a secured
      lender's environmental insurance policy is in effect with respect to such
      Mortgaged Premises.

                             9 AFFIRMATIVE COVENANTS

      SECTION 9.2(b) is amended by adding the following new SECTION 9.2(b(2):

            (2)   any management letters, management reports or other
      supplementary comments or reports delivered by such accountants to
      management or the board of directors of the Company;

      SECTION 9.4 is amended by adding the following new SECTION 9.4(b):

            (b)   Monthly, if applicable, a report of Collateral that is In
      Default, separately listing Single-family Loans and Commercial Mortgage
      Loans.

                13 RELATIONSHIPS AMONG THE AGENT AND THE LENDERS

      SECTION 13.3(j) is hereby amended to henceforth read as follows:

                                       20

<PAGE>

                  (j)   cause or permit any change in the eligibility standards
      for Collateral hereunder or change the definition of any type of Eligible
      Collateral, provided that the Agent may in its discretion approve as
      Eligible Collateral any Collateral (without regard to any Commercial
      Mortgage Loans that, pursuant to the provisions of SCHEDULE DQ, item 13,
      the Agent has allowed to continue as Eligible Collateral even though their
      Original Pledge Dates were more than 270 days but not more than 364 days
      ago) that does not satisfy such eligibility standards and that has
      aggregate Collateral Value of up to Ten Million Dollars ($10,000,000) at
      the time of approval.

      SECTION 13.4 is hereby amended by adding the following new CLAUSE (c) (and
relettering the current CLAUSE (c) as CLAUSE (d)):

                  (c)   approve or disapprove any additional investor proposed
      by the Company as an Approved Investor or disapprove any existing Approved
      Investor; or

                                   14 NOTICES

      The Company's address for Notices is hereby amended to henceforth read as
follows:

      Sunset Financial Resources, Inc.
      10245 Centurion Parkway N, Suite 305
      Jacksonville, FL 32256
      Attention: Mike Pannell, Chief Financial Officer
      Phone: (904) 425-4349
      Fax:   (904) 425-4350

                                15 MISCELLANEOUS

      15.7  Counterpart Execution. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

      15.12 Notice Pursuant to Tex. Bus. & Comm. Code Section 26.02. THE 3/04
CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND THE OTHER FACILITIES PAPERS
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS 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.

  (The remainder of this page is intentionally blank; signature pages follow.)

                                       21

<PAGE>

      EXECUTED as of the Effective Date.

                                        SUNSET FINANCIAL RESOURCES, INC.

                                        By:    /s/ Thomas G. Manuel
                                            ------------------------------------
                                        Name:      Thomas G. Manuel
                                        Title: EVP

                                       22

<PAGE>

                                        JPMORGAN CHASE BANK,
                                        as the Agent and as a Lender

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

Exhibits:
Exhibit 6/04-B    -     Requests for Borrowing forms with Submission List forms
Schedules:
Schedule 6/04-AI  -     list of Approved Investors
Schedule 6/04-DQ  -     Disqualifiers
Schedule 6/04-EC  -     Eligible Collateral

                                       23

<PAGE>

                                 EXHIBIT 6/04-B
                            TO 3/04 CREDIT AGREEMENT

                              Request for Borrowing

                           [Letterhead of the Company]

                                     [date]

JPMorgan Chase Bank
1111 Fannin, 12th Floor
Houston, Texas 77002

Attention: Wanda Carr

Ladies and Gentlemen:

      SUNSET FINANCIAL RESOURCES, INC. (the "COMPANY") and JPMORGAN CHASE BANK
as a lender and as agent (the "AGENT") for the other lender(s) who are parties
to it as lenders, and such other lenders (all such lenders, including JPMorgan
Chase Bank being herein called the "LENDERS") together executed a 3/04 Senior
Secured Credit Agreement dated March 22, 2004 (which, as it may have been or may
hereafter be supplemented, amended or restated from time to time, is called the
"CURRENT CREDIT AGREEMENT"). Any term defined in the Current Credit Agreement
and used in this Request for Borrowing shall have the meaning given to it in the
Current Credit Agreement.

      The Company currently qualifies under the Current Credit Agreement for,
and hereby requests, an Advance or Advances as set forth below to be made on
_________________, 20___ (or, if the Agent is closed that day, on the next day
when it is not).

            Single-family Warehousing Advance(s):
                  Wet Advance:                                $________________
                  Dry Advance:                                $________________
                  Total Single-family Warehousing
                   Advance:                                        $____________

            Commercial Warehousing Advance(s)                      $____________

            Total Borrowing                                        $____________

      After giving effect as required by the Credit Agreement to the requested
Advance, the Borrowing Base will equal or exceed the outstanding principal
balance of the Loan and such balance will not exceed the Aggregate Committed
Sum.

                                       24

<PAGE>

   (Check the block for each of the following paragraphs that is applicable.)

[ ]   This Borrowing Request includes a request for a Single-family Warehousing
Advance. If the Current Credit Agreement requires new Collateral to support the
requested Advance, (i) the Company has attached and submits herewith the
relevant Submission List(s) and (ii) the Basic Papers for all items of
Collateral described or referred to therein have been submitted -- or are being
submitted concurrently herewith -- to the Custodian.

[ ]   This Borrowing Request includes a request for a Wet Warehouse Advance (to
finance Wet Single-family Loans.) If the Current Credit Agreement requires new
Collateral to support the requested Advance, the Company has attached and
submits herewith the relevant Submission List(s) (the Basic Papers for all such
Wet Loans will be delivered to the Custodian on or before seven (7) Business
Days after funding of the requested Advance).

[ ]   This Borrowing Request includes a request for a Commercial Warehousing
Advance. If the Current Credit Agreement requires new Collateral to support the
requested Advance, (i) the Company has attached and submits herewith the
relevant Submission List(s) and (ii) the Basic Papers for all items of
Collateral described or referred to therein have been submitted -- or are being
submitted concurrently herewith -- to the Custodian.

      The Company hereby grants to the Agent a security interest in all such new
Collateral and (as to Collateral) all related Loan Papers, and they are hereby
made subject to the security interest to the Agent created by the Current Credit
Agreement, for the Pro Rata benefit of the Lenders, effective immediately.

      The proceeds of the Advance should be deposited in the Company's Note
Payment Account number 00113329123 with JPMorgan Chase Bank.

      The Company acknowledges that the Agent and the Lenders will rely on the
truth of each statement in this request and its attachments in funding the
requested Advance.

      No Default has occurred under the Facilities Papers that has not been
cured by the Company or declared in writing by the Agent to have been waived,
and no Event of Default has occurred under the Facilities Papers that the Agent
has not declared in writing to have been cured or waived. There has been no
material adverse change in any of the Central Elements in respect of the Company
or any of its Subsidiaries since the date of the Company's most recent annual
audited Financial Statements that have been delivered to the Agent.

      All items that the Company is required to furnish to the Agent, its
designated custodian or the Lenders for this requested Advance and otherwise
have been delivered, or will be delivered before this requested Advance is
funded, in all respects as required by the Current Credit Agreement and the
other Facilities Papers. All Collateral papers described or referred to in the
Submission List(s) (if any) submitted to the Agent with this Request for
Borrowing conform in all respects with all applicable requirements of the
Current Credit Agreement and the other Facilities Papers.

                                       25

<PAGE>

      There has been no change in the information furnished to the Agent or any
Lender to enable it to verify the identity of the Company as required by Section
326 of the USA Patriot Act except as follows: (none).

      The Company hereby warrants and represents to the Agent and the Lenders
that none of the Collateral (including, but not limited to, Collateral described
or referred to in this request) is pledged to any Person other than the Agent or
supports any borrowing or repurchase agreement funding other than Borrowings
under the Current Credit Agreement.

      The undersigned officer hereby certifies that all of the Company's
representations and warranties (a) in the Current Credit Agreement and all of
the other Facilities Papers (except only to the extent that (i) such a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have been changed by transactions or
conditions contemplated or expressly permitted by the Facilities Papers), (b) in
this Request for Borrowing, are true and correct on the date of this Request for
Borrowing and (c) that the Company qualifies for funding of the requested
Advance.

                                               SUNSET FINANCIAL RESOURCES, INC.

                                               By: _____________________________
                                               Name ____________________________
                                               Title: __________________________
Attached (check if applicable):

[]    Submission List for Eligible Single-family Collateral (Dry Loans and/or
      Wet Loans)

[]    Submission List for Eligible Commercial Collateral (Dry Loans only)

                                       26

<PAGE>

                  SUBMISSION LIST FOR SINGLE FAMILY COLLATERAL

                                  Date:________

TO:
JPMorgan Chase Bank
1111 Fannin, 12th Floor
Houston, Texas 77002

Attention: Ms. Wanda Carr, Mortgage Banking Warehouse Services
Phone: (713) 427-6391
Fax:   (713) 427-6449
email: wanda.carr@jpmorganchase.com

FROM:
Sunset Financial Resources, Inc.
10245 Centurion Parkway N, Suite 305
Jacksonville, Florida 32256
Attention: _____________
Phone: _______________
Fax: ________________
email: _________________

      Sunset Financial Resources, Inc. submits the following list of
Single-family Loans in support of the Request for Borrowing dated ________ to
which this Submission List is attached and hereby pledges them to the Agent (for
itself and as agent for the other Lenders):

<TABLE>
<CAPTION>
                                                                  NOTE
BRANCH       LOAN                                      NOTE       LOAN      LOAN
NUMBER      NUMBER      BORROWER OR CUSTOMER NAME      DATE      AMOUNT     TYPE
--------------------------------------------------------------------------------
<S>         <C>         <C>                            <C>       <C>        <C>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>

                                       27

<PAGE>

                    SUBMISSION LIST FOR COMMERCIAL COLLATERAL

                                  Date:________

TO:
JPMorgan Chase Bank
1111 Fannin, 12th Floor
Houston, Texas 77002

Attention: Ms. Wanda Carr, Mortgage Banking Warehouse Services
Phone: (713) 427-6391
Fax:   (713) 427-6449
email: wanda.carr@jpmorganchase.com

FROM:
Sunset Financial Resources, Inc.
10245 Centurion Parkway N, Suite 305
Jacksonville, Florida 32256
Attention: ___________
Phone: _______________
Fax: __________________
email: _________________

      Sunset Financial Resources, Inc. submits the following list of Commercial
Mortgage Loans in support of the Request for Borrowing dated _________ to which
this Submission List is attached and hereby pledges them to the Agent (for
itself and as agent for the other Lenders):

<TABLE>
<CAPTION>
                                                                  NOTE
BRANCH       LOAN                                      NOTE       LOAN      LOAN
NUMBER      NUMBER      BORROWER OR CUSTOMER NAME      DATE      AMOUNT     TYPE
--------------------------------------------------------------------------------
<S>         <C>         <C>                            <C>       <C>        <C>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>

                                       28

<PAGE>

                                  [SUNSET LOGO]

                       6/04 AMENDMENT TO CREDIT AGREEMENT
                           DATED AS OF JUNE 24-, 2004

                          AMENDING (FOR THE FIRST TIME)
                    THE 3/04 SENIOR SECURED CREDIT AGREEMENT
                           DATED AS OF MARCH 22, 2004

                                  BY AND AMONG

                        SUNSET FINANCIAL RESOURCES, INC.

                                       AND

                              JPMORGAN CHASE BANK,
             AS ADMINISTRATIVE AGENT, COLLATERAL AGENT AND A LENDER,

                                       AND

                       THE OTHER LENDER(S) PARTIES HERETO

                  $250,000,000 SENIOR SECURED REVOLVING CREDIT

                                 [JPMORGAN LOGO]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]