Exhibit 10.21


 


KKR FINANCIAL ADVISORS LLC


555 CALIFORNIA STREET, 50TH FLOOR


SAN FRANCISCO, CA 94104


 


February 27, 2009


 


KKR Financial Holdings LLC


555 California Street, 50th Floor


San Francisco, California 94104


 


Ladies and Gentlemen:


 


Reference is made to the Amended and Restated Management Agreement,
dated as of May 4, 2007, by and among KKR Financial Holdings LLC, a
Delaware limited liability company (the “Company”), KKR Financial Corp.,
a Maryland corporation, and KKR Financial Advisors LLC, a Delaware limited
liability company (the “Manager”), as amended June 15, 2007 (the “Management
Agreement”).  Capitalized terms used
but not defined in this letter agreement shall have the meanings ascribed to
them in the Management Agreement.


 


The Manager and the Company hereby agree that the Manager shall defer
payment of fifty percent (50%) of the Base Management Fees payable pursuant to Section 8
of the Management Agreement from January 1, 2009 through November 30,
2009 (the “Deferred Management Fees”) until the earlier of (x) December 15,
2009 or (y) the date of any termination of the Management Agreement
pursuant to either Section 13 (a) or Section 15(b) thereof
(the “Deferral Date”). All Deferred Management Fees shall be paid by the
Company to the Manager within 15 calendar days of the Deferral Date. The
termination of the Management Agreement shall not in any respect affect the
obligation of the Company to pay Deferred Management Fees. For the avoidance of
doubt, all Deferred Management Fees shall be deemed to be earned by the Manager
for purposes of Section 15(b) of the Management Agreement as of the
date that they would have been earned in the absence of this letter agreement. The
Company and the Manager hereby further agree that the Company shall continue to
(x) pay all of the expenses of the Manager and (y) reimburse the Manager
for documented expenses of the Manager incurred on the Company’s behalf, each
in accordance with Section 9 of the Management Agreement.


 

















 


If the foregoing accurately reflects your understanding with respect to
the matters described above, please indicate your agreement by signing and
returning one copy of this letter agreement to the undersigned, whereupon this
letter agreement shall become a binding agreement between the Company and the
Manager.


 


 


	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KKR FINANCIAL ADVISORS LLC, as Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ANDREW J. SOSSEN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Andrew J. Sossen

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and agreed as of the date first written above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KKR FINANCIAL HOLDINGS LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ WILLIAM C. SONNEBORN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: William C. Sonneborn

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: President and Chief Executive Officer