10,000,000 Shares(1)



                        SUNSET FINANCIAL RESOURCES, INC.



                                  COMMON STOCK



                             UNDERWRITING AGREEMENT



                                 MARCH 17, 2004



W.R. Hambrecht + Co., LLC

J.P. Morgan Securities Inc.

Stifel, Nicolaus & Company, Incorporated

As Representatives of several Underwriters

c/o W.R. Hambrecht + Co., LLC

539 Bryant Street

Suite 100

San Francisco, CA  94107



and



J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York  10172



Ladies and Gentlemen:



         Sunset Financial Resources, Inc., a Maryland corporation (the

"Company"), proposes to issue and sell up to an aggregate of 10,000,000 shares

of its authorized but unissued common stock, $0.001 par value per share (the

"Common Stock"), to the Underwriters (as hereinafter defined), for whom you (the

"Representatives") are acting as representatives (said 10,000,000 shares of

Common Stock to be issued and sold by the Company being herein called the

"Underwritten Stock"). The Company has also granted the Underwriters an option

to purchase up to an aggregate of 1,500,000 additional shares of Common Stock

(the "Option Stock," and the Option Stock together with the Underwritten Stock

being hereinafter referred to as the "Shares"). The Common Stock is more fully

described in the Registration Statement and the Prospectus hereinafter

mentioned.



         The Company hereby confirms the agreements made with respect to the

purchase of the Shares by the Underwriters, named in Schedule 1 hereto (herein

collectively called the "Underwriters").



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

(1) Plus an option to purchase from the Company up to an aggregate of

1,500,000 additional shares to cover over-allotments.



{PAGE}



         1. REGISTRATION STATEMENT. The Company has filed with the Securities

and Exchange Commission (the "Commission") a registration statement on Form S-11

(No. 333-111018), including the related preliminary prospectus, for the

registration under the Securities Act of 1933, as amended (the "Securities

Act"), of the Shares. Copies of such registration statement and of each

amendment thereto, if any, including the related preliminary prospectus (meeting

the requirements of Rule 430A of the rules and regulations of the Commission)

heretofore filed by the Company with the Commission have been delivered to you

and the Company has consented to the use of such copies for the purposes

permitted by the Securities Act.



         (a) The term "Registration Statement" as used in this Agreement shall

mean such registration statement, including all exhibits and financial

statements, all information omitted therefrom in reliance upon Rule 430A and

contained in the Prospectus referred to below, in the form in which it became

effective, and any registration statement filed pursuant to Rule 462(b) of the

rules and regulations of the Commission with respect to the Shares (herein

called a "Rule 462(b) registration statement"), and, in the event of any

amendment thereto after the effective date of such registration statement (the

"Effective Date"), shall also mean (from and after the effectiveness of such

amendment) such registration statement as so amended (including any Rule 462(b)

registration statement). The term "Prospectus" as used in this Agreement shall

mean the prospectus relating to the Shares first filed with the Commission

pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as

included in the Registration Statement) and, in the event of any supplement or

amendment to such prospectus after the Effective Date, shall also mean (from and

after the filing with the Commission of such supplement or the effectiveness of

such amendment) such prospectus as so supplemented or amended. The term

"Preliminary Prospectus" as used in this Agreement shall mean each preliminary

prospectus included in such registration statement prior to the time it becomes

effective.



         (b) The Registration Statement has been declared effective under the

Securities Act, and no post-effective amendment to the Registration Statement

has been filed as of the date of this Agreement.



         2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby

represents and warrants to the Underwriter as follows:



         (a) Neither the Commission nor any state securities commission has

issued any order preventing or suspending the use of any Preliminary Prospectus

or has instituted or threatened to institute any proceedings with respect to

such an order. The Registration Statement and the Prospectus comply, and on the

Closing Date (as hereinafter defined) and any later date on which the Option

Stock is to be purchased, the Prospectus will comply, in all material respects,

with the provisions of the Securities Act and the rules and regulations of the

Commission thereunder (the "Securities Act and Rules"). On the Effective Date,

the Registration Statement did not contain any untrue statement of a material

fact and did not omit to state any material fact required to be stated therein

or necessary in order to make the statements therein not misleading, and on the

Effective Date the Prospectus did not, and on the Closing Date and any later

date on which the Option Stock is to be purchased, will not, contain any untrue

statement of a material fact and did not omit to state any material fact

required to be stated therein, or necessary in order to make the



                                       2



{PAGE}



statements therein, in the light of the circumstances under which they were

made, not misleading; provided, however, that none of the representations and

warranties in this subparagraph 2(a) shall apply to statements in, or omissions

from, the Registration Statement or the Prospectus made in reliance upon and in

conformity with information herein or otherwise furnished in writing to the

Company by or on behalf of the Underwriters expressly for use in the

Registration Statement or Prospectus.



         (b) The only subsidiary of the Company is SFR Subsidiary, Inc. ("SFR"),

and the Company does not hold any equity interest in any corporation, limited

liability company, partnership, joint venture or entity other than SFR. SFR has

been duly incorporated and is validly existing as a corporation in good standing

under the laws of the State of Maryland, having full power and corporate

authority to own or lease its properties and to conduct its business as

described in the Registration Statement and the Prospectus; and (ii) is duly

qualified to do business as a foreign corporation and is in good standing in all

jurisdictions in which the character of the property owned or leased or the

nature of the business transacted by it makes qualification necessary (except

where the failure to be so qualified would not have a material adverse effect on

the business, properties, financial condition or results of operations of the

Company and SFR, taken as a whole a "Material Adverse Effect"); all of the

issued and outstanding shares of capital stock of SFR have been duly authorized

and validly issued and are fully paid and are non-assessable and are owned by

the Company directly, free and clear of any security interest, mortgage, pledge,

lien, encumbrance, claim or equity; none of the outstanding shares of capital

stock of SFR were issued in violation of preemptive or other similar rights

arising by operation of law, under the charter or bylaws of SFR or under any

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC