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EXHIBIT 10.1

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FORM OF SHARE SUBSCRIPTION AGREEMENT

by and between
KKR FINANCIAL HOLDINGS LLC

and

the Party Signatory Hereto

Dated as of August     , 2007

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Table of Contents

 
   
  Page

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ARTICLE I THE SHARES
 
1
ARTICLE II PURCHASE AND SALE
 
1  
Section 2.1
 
Purchase and Sale
 
1  
Section 2.2
 
Payment of Purchase Price; Closing
 
1
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
2  
Section 3.1
 
Existence and Power
 
2  
Section 3.2
 
Capitalization
 
2  
Section 3.3
 
Authorization
 
2  
Section 3.4
 
Valid Issuance of Shares
 
2  
Section 3.5
 
Non-Contravention/No Consents
 
2  
Section 3.6
 
Registered Shares
 
3  
Section 3.7
 
Periodic Filings; Financial Statements
 
3
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
3  
Section 4.1
 
Existence and Power
 
3  
Section 4.2
 
Authorization
 
3  
Section 4.3
 
Governmental Authorization
 
3  
Section 4.4
 
Non-Contravention
 
4  
Section 4.5
 
No Brokers
 
4  
Section 4.6
 
Reliance
 
4
ARTICLE V CONDITIONS TO CLOSING
 
4  
Section 5.1
 
Conditions to the Obligations of the Company
 
4  
Section 5.2
 
Conditions to the Obligations of the Purchaser
 
4
ARTICLE VI MISCELLANEOUS
 
4  
Section 6.1
 
Unsubscribed Shares
 
4  
Section 6.2
 
Agreement Not to Exercise Rights
 
5  
Section 6.3
 
Transfers
 
5  
Section 6.4
 
Notices
 
5  
Section 6.5
 
Further Assurances
 
6  
Section 6.6
 
Amendments and Waivers
 
6
 
 
 
 
 

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Section 6.7
 
Fees and Expenses
 
6  
Section 6.8
 
Successors and Assigns
 
6  
Section 6.9
 
Governing Law
 
6  
Section 6.10
 
Jurisdiction
 
6  
Section 6.11
 
Waiver Of Jury Trial
 
7  
Section 6.12
 
Entire Agreement
 
7  
Section 6.13
 
Effect of Headings and Table of Contents
 
7  
Section 6.14
 
Severability
 
7  
Section 6.15
 
Counterparts; Third Party Beneficiaries
 
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        SHARE SUBSCRIPTION AGREEMENT dated as of August     , 2007 (this
“Agreement”) between KKR Financial Holdings LLC, a Delaware limited liability
company (the “Company”) and the party signatory hereto (the “Purchaser”).

BACKGROUND

        The Company has proposed to offer and sell Common Shares pursuant to a
rights offering (the “Rights Offering”) whereby each holder of Common Shares as
of August 30, 2007 (the “Record Date”), shall be offered 0.19430
non-transferable rights (for each Common Share held by such holder) (each, a
“Right”, and collectively, the “Rights”) to receive, upon payment of the $14.40
per share subscription price, one Common Share.

        The Purchaser wishes to subscribe for and purchase, and the Company,
desires to issue and sell, a certain portion of the Unsubscribed Shares (as
defined below) (the “Shares”), on the terms and subject to the conditions set
forth herein.

        In consideration of the mutual covenants and agreements contained in
this Agreement, the receipt and sufficiency of which are herby acknowledged, the
parties herby agree as follows:

ARTICLE I

THE SHARES

        The Shares shall be issued to the Purchaser pursuant to Article II
hereof and shall be subject to the terms and provisions of the Amended and
Restated Operating Agreement of the Company, dated as of May 3, 2007.

ARTICLE II

PURCHASE AND SALE

        Section 2.1    Purchase and Sale.    Upon the terms and subject to the
conditions of this Agreement the Company agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase from the Company the aggregate
number of Common Shares equal to the product of (x) a total number of Common
Shares equal to 18,750,000 minus the number of Common Shares subscribed for and
purchased pursuant to the Rights Offering and purchased on or before
September 24, 2007 (the “Unsubscribed Shares”) (provided, that in no event shall
the total number of Unsubscribed Shares set forth in this clause (x) exceed
6,944,444 Common Shares), which number shall be set forth in a Section 6.1
Notice (as defined below) and (y) the pro rata percentage (the “Pro Rata
Percentage”), which percentage is calculated by dividing the numeral one by the
total number of purchasers agreeing to acquire a portion of the Unsubscribed
Shares on the date hereof or such other percentage that may otherwise be agreed
to by the Company and each of the purchasers agreeing to acquire a portion of
the Unsubscribed Shares on the date hereof; provided, that in no event shall the
Purchaser acquire more than 1% of the outstanding Common Shares of the Company.
Each such Common Share shall be purchased by the Purchaser for a purchase price
equal to $14.40 per share (the “Purchase Price”).

        Section 2.2    Payment of Purchase Price; Closing.    The Company will
deliver the Shares to the Purchaser, against payment by or on behalf of the
Purchaser of the purchase price therefor (as set forth above in Section 2.1) by
wire transfer in immediately available funds to the account designated by the
Company on Annex A. The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on October 2, 2007, or, if the Section 6.1 Notice
is not delivered to the Purchaser on or before September 25, 2007, date of such
delivery and payment shall be on the fifth New York

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Business Day (as defined below) following receipt of the Section 6.1 Notice by
the Purchaser (such time being referred to herein as the “Closing”).

        The documents to be delivered at the Closing by or on behalf of the
parties hereto pursuant to this Article II and any additional documents
requested by the Purchaser pursuant to this Article II, will be delivered at the
Closing at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue,
New York, New York 10017 (the “Closing Location”). A meeting will be held at the
Closing Location at 4:00 p.m., New York City time, on the New York Business Day
next preceding the Closing, at which meeting the final drafts of the documents
to be delivered pursuant to the preceding sentence will be available for review
by the parties hereto. For the purposes of this Section 2.2, “New York Business
Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in The City of New York are generally
authorized or obligated by law or executive order to close.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company represents and warrants to the Purchaser as of the date
hereof and as of the Closing that:

        Section 3.1    Existence and Power.    Each of the Company and its
subsidiaries is duly organized and validly existing under the laws of the state
of its organization and has all power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage. The Company has all power and authority to enter into and
perform its obligations under this Agreement.

        Section 3.2    Capitalization.    All of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable and were not issued in violation of any preemptive
rights.

        Section 3.3    Authorization.    This Agreement has been duly
authorized, executed and delivered by the Company. When executed and delivered
by the Company and countersigned by the Purchaser, this Agreement shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles.

        Section 3.4    Valid Issuance of Shares.    The Shares have been duly
authorized and issued by the Company and, when delivered against payment
therefor as provided in this Agreement, (a) will be validly issued, fully paid
and nonassessable, (b) will not be subject to any encumbrances, preemptive
rights or any other similar contractual rights of the stockholders of the
Company or any other person, and (c) the Purchaser will obtain sole record and
beneficial ownership of such Shares and take good and marketable title thereto,
free and clear of any liens.

        Section 3.5    Non-Contravention/No Consents.    The issue and sale of
the Shares, the execution, delivery and performance by the Company of this
Agreement, and the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will such action result in
any violation of the provisions of any of the organizational or governing
documents of the Company or any statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its properties; and no consent, approval, authorization, order, registration or

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qualification of or with any such court or governmental agency or body is
required for the issue and sale the Shares or the consummation by the Company of
the transactions contemplated by this Agreement.

        Section 3.6    Registered Shares.    The Company has filed a
registration statement under the Securities Act of 1933, as amended (the
“Securities Act”) relating to the Shares with the U.S. Securities and Exchange
Commission (the “SEC”) on Form S-3 (the “Registration Statement”). The Shares
will be listed on the New York Stock Exchange prior to issuance.

        Section 3.7    Periodic Filings; Financial Statements.    (a)     The
Company has furnished or made available to the Purchaser true and complete
copies of all reports or registration statements it has filed with the SEC under
the Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder (the “Exchange Act”),
for all periods subsequent to December 31, 2006, all in the form so filed
(collectively the “Company SEC Documents”). As of their respective filing dates,
the Company SEC Documents complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and none
of the Company SEC Documents contained, when filed with the SEC, and if amended,
as of the date of such amendment, any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances in
which they were made, not misleading, except to the extent corrected by a
subsequently filed document with the SEC.

        (b)   The Company's financial statements, including the notes thereto,
included in the Company SEC Documents (the “Company Financial Statements”)
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP consistently applied
(except as may be indicated in the notes and schedules thereto) during the
periods involved and present fairly the Company's consolidated financial
position at the dates thereof and of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
audit adjustments). Since the date of the most recent balance sheet included in
the Company Financial Statements, the Company has not effected any change in any
method of accounting or accounting practice, except for any such change required
because of a concurrent change in GAAP.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

        The Purchaser represents and warrants to the Company as of the date
hereof and as of the Closing that:

        Section 4.1    Existence and Power.    The Purchaser is either (a) a
natural person or (b) duly organized and validly existing under the laws of the
state of its organization and has all power and authority to enter into and
perform its obligations under this Agreement.

        Section 4.2    Authorization.    This Agreement has been duly authorized
by all necessary action on the part of the Purchaser. When executed and
delivered by the Purchaser and countersigned by the Company, this Agreement
shall constitute the legal, valid and binding obligation of the Purchaser
(acting on behalf of the investment management client accounts it represents, if
applicable) enforceable against the Purchaser in accordance with its terms,
except as such may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally and by general equitable principles.

        Section 4.3    Governmental Authorization.    As of the date hereof, no
permit, authorization, consent or approval of or by, or any notification of or
filing (including any filing under the United States

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Hart-Scott-Rodino Antitrust Improvements act of 1976, as amended, and the rules
and regulations promulgated thereunder) with, any person (governmental or
private) is required to be obtained or made by it in connection with the
execution, delivery and performance by it of this Agreement, the consummation by
it of the transactions contemplated hereby or thereby, or the issuance, sale or
delivery to it by the Company of the Shares.

        Section 4.4    Non-Contravention.    The execution, delivery and
performance by the Purchaser of this Agreement and the consummation by it of the
transactions contemplated hereby and thereby will not violate any statute,
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Purchaser or any of its properties.

        Section 4.5    No Brokers.    The Purchaser has not employed any broker
or finder in connection with the transactions contemplated by this Agreement.

        Section 4.6    Reliance.    The Purchaser acknowledges that the Company
and others will rely upon the truth and accuracy of the foregoing
acknowledgements, representations and agreements.

ARTICLE V

CONDITIONS TO CLOSING

        Section 5.1    Conditions to the Obligations of the Company.    The
obligations of the Company hereunder shall be subject to the following
conditions:

        (a)   All representations and warranties and other statements of the
Purchaser herein are, at and as of the Closing, true and correct; and

        (b)   The Purchaser shall have performed all of its obligations
hereunder theretofore to be performed.

        Section 5.2    Conditions to the Obligations of the Purchaser.    The
obligations of the Purchaser hereunder shall be subject to the following
conditions:

        (a)   All representations and warranties and other statements of the
Company herein are, at and as of the Closing, true and correct; and

        (b)   The Company shall have performed all of its obligations hereunder
theretofore to be performed.

ARTICLE VI

MISCELLANEOUS

        Section 6.1    Unsubscribed Shares.    The Company shall promptly
provide a written notice to the Purchaser (the “Section 6.1 Notice”) setting
forth either (a) (i) the total whole number of Unsubscribed Shares, (ii) the
total number of Unsubscribed Shares the Purchaser is bound to purchase pursuant
to the terms hereof, and the aggregate purchase price thereof and (iii) the date
or time after the receipt of such notice by which a wire transfer of such
aggregate purchase price must be received; provided, that such date shall be no
earlier than October 2, 2007 or (b) that (i) all of the Common Shares were
subscribed for and purchased pursuant to the Rights Offering and (ii) the
Purchaser is not required to purchase any Common Shares under the terms of this
Agreement. Notwithstanding anything herein to the contrary, the Company shall
provide the Section 6.1 Notice to the Purchaser no later than November 1, 2007.
This Agreement shall automatically terminate on November 15, 2007 (provided,
that the Purchaser has not violated any terms or provisions of this Agreement,
including the payment of the

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aggregate purchase price for the Shares) or upon the Purchaser's receipt of a
Section 6.1 Notice setting forth the information required under clause (b) of
this Section 6.1.

        Section 6.2    Agreement Not to Exercise Rights.    The Purchaser hereby
agrees that it shall not exercise any, or subscribe for or purchase any Common
Shares that would be issuable pursuant to any, Rights which the Purchaser may
receive.

        Section 6.3    Transfers.    (a)     If the Shares to be issued are not
freely transferable under the Securities Act by the Purchaser following the
Closing, the Company shall use its commercially reasonable efforts to cause to
be declared effective under the Securities Act by the Securities and Exchange
Commission, prior to the date which is one hundred eighty (180) days following
the Closing, one or more registration statements (the “Shelf Registration
Statement”) covering the registration of resale of such Shares by the Purchaser.

        (b)   Except for customary blackout periods of no more than 120 days in
any 360-day period, the Company agrees to use its commercially reasonable
efforts to keep the Shelf Registration Statement continuously effective until
the expiration of the period that will terminate when all the Shares covered by
the Shelf Registration Statement have been sold (the “Shelf Effectiveness
Period”). The Company further agrees to supplement or amend the Shelf
Registration Statement and the related Prospectus if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder or if reasonably requested by the
Purchaser of Shares with respect to information relating to such Purchaser, and
to use their reasonable best efforts to cause any such amendment to become
effective, if required, and such Shelf Registration Statement and Prospectus to
become usable as soon as thereafter practicable.

        (c)   The Company shall pay all customary registration expenses in
connection with any registration pursuant to Section 6.1(a) hereof. Each
Purchaser shall pay all underwriting discounts and commissions, brokerage
commissions and transfer taxes, if any, relating to the sale or disposition of
such Purchaser's Shares pursuant to the Shelf Registration Statement.

        Section 6.4    Notices.    All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or by facsimile or seven days
after having been sent by certified mail, return receipt requested, postage
prepaid, to the parties to this Agreement at the following address or to such
other address either party to this Agreement shall specify by notice to the
other party:

    (i)   If to the Company:                               KKR Financial
Holdings LLC
555 California Street, 50th Floor
San Francisco, CA 94104
Attention: General Counsel
Facsimile: (415) 391-3330                               with a copy to (which
shall not constitute notice):                               Simpson Thacher &
Bartlett LLP
425 Lexington Avenue
New York, NY 10017             Attention:   David Sorkin                 Sean
Rodgers             Facsimile: (212) 455-2502    

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                      (ii)   If to the Purchaser:                              

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            Facsimile:                    

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                              with a copy to (which shall not constitute
notice):                              

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            Facsimile:                    

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        Section 6.5    Further Assurances.    Each party hereto shall do and
perform or cause to be done and performed all further acts and shall execute and
deliver all other agreements, certificates, instruments and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

        Section 6.6    Amendments and Waivers.    (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is duly executed and delivered by the Company and the Purchaser;
and

        (b)   No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

        Section 6.7    Fees and Expenses.    Each party hereto shall pay all of
its own fees and expenses (including attorneys' fees) incurred in connection
with this Agreement and the transactions contemplated hereby.

        Section 6.8    Successors and Assigns.    The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

        Section 6.9    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

        Section 6.10    Jurisdiction.    The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in the
Borough of Manhattan in New York City, and each of the parties hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding which is brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court.

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        Section 6.11    Waiver Of Jury Trial.    EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

        Section 6.12    Entire Agreement.    This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties and/or their affiliates with respect to the subject
matter of this Agreement.

        Section 6.13    Effect of Headings and Table of Contents.    The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

        Section 6.14    Severability.    If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be deemed to be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforced in accordance with its terms to the maximum extent permitted by law.

        Section 6.15    Counterparts; Third Party Beneficiaries.    This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures were upon the same
instrument. No provision of this Agreement shall confer upon any person other
than the parties hereto any rights or remedies hereunder.

[Remainder of page intentionally left blank]

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        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 
 
KKR FINANCIAL HOLDINGS LLC
 
 
By:

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    Name:       Title:  
 
 
PURCHASER
 
 

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