Exhibit 10.1


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



AMENDMENT NO. 1


 


dated as of August 5,
2009


 


to


 


CREDIT AGREEMENT


 


and


 


SECURITY AGREEMENT


 


dated as of November 10,
2008


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  


















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1

  	
  Defined Terms

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2

  	
  Effectiveness of this Amendment No. 1

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 3

  	
  Amendments

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 4

  	
  Addition of KKR CLO 2009-1 as Borrower

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 5

  	
  Conditions to Amendment No. 1

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 6

  	
  Representations and Warranties

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 7

  	
  Counterparts.

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 8

  	
  Relation to the Credit Agreement

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 9

  	
  Continued Effectiveness

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 10

  	
  Waivers

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 11

  	
  Survival of Representations and Warranties

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 12

  	
  Further
  Miscellaneous Provisions

  	
  19

  



 

















 


AMENDMENT NO. 1 TO CREDIT AGREEMENT


 


This AMENDMENT NO. 1 (this “Amendment No. 1”),
dated as of August 5, 2009, to the Original Credit Agreement referenced
below and the Original Security Agreement referenced below, is entered into by
and among (i) KKR FINANCIAL HOLDINGS LLC, a Delaware limited liability
company (“KKR Financial”), KKR TRS HOLDINGS, LTD., a Cayman Islands
company (“KKR TRS LTD”), KKR FINANCIAL HOLDINGS II, LLC, a Delaware
limited liability company (“KKR Holdings II”), KKR FINANCIAL HOLDINGS
III, LLC, a Delaware limited liability company (“KKR Holdings III”), KKR
FINANCIAL HOLDINGS, INC., a Delaware corporation (“KKR Holdings”), KKR
FINANCIAL HOLDINGS, LTD., a Cayman Islands company (“KKR Holdings LTD”),
and  KKR FINANCIAL CLO 2009-1, LTD., a
Cayman Islands company (“KKR CLO 2009-1”, and collectively with KKR
Financial, KKR TRS LTD, KKR Holdings II, KKR Holdings III, KKR Holdings and KKR
Holdings LTD, the “KKR Entities” and each, individually, a “KKR
Entity”), as Borrowers, (ii) BANK OF AMERICA, N.A., a national banking
association (together with its successors in interest, “BofA”), as
Administrative Agent and a Lender, and (iii) CITICORP NORTH AMERICA INC.,
a Delaware corporation (together with its successors in interest, “Citicorp”),
as a Lender.


 


RECITALS


 


WHEREAS, the KKR Entities
(other than KKR CLO 2009-1), BofA, Citicorp, Banc of America Securities LLC and
Citigroup Global Markets Inc. entered into that certain Credit Agreement dated
as of November 10, 2008 (the “Original Credit Agreement”, and as
amended by this Amendment No. 1 and as the same may be further amended,
supplemented or otherwise modified from time to time in accordance with its
terms, the “Credit Agreement”);


 


WHEREAS, the KKR Entities
(other than KKR CLO 2009-1) and BofA, as Administrative Agent on behalf of
itself and the other Lenders, entered into that certain Security Agreement
dated as of November 17, 2008 (the “Original Security Agreement”,
and as amended by this Amendment No. 1 and as the same may be further
amended, supplemented or otherwise modified from time to time in accordance
with its terms, the “Security Agreement”);


 


WHEREAS, the parties hereto
wish to amend the Original Credit Agreement and the Original Security Agreement
with respect to certain matters set forth herein;


 


WHEREAS, pursuant to Section 10.01
thereof, no amendment or waiver of any provision of the Original Credit
Agreement or any other Loan Document, and no consent to any departure by any
Borrower therefrom, shall be effective unless in writing signed by the Required
Lenders and the applicable Borrower, as the case may be, and acknowledged by
the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided
that no such amendment, waiver or consent may have the effects set forth in the
first proviso to Section 10.01 of the Original Credit Agreement without
the written consent of each Lender or each affected Lender, as applicable; and provided,
further, that no such amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
the Original Credit Agreement or any other Loan Document;


 


WHEREAS, BofA is, as of the
date hereof, the Administrative Agent under the Original Credit Agreement;


 


WHEREAS, BofA and Citicorp
constitute, as of the date hereof, all of the Lenders under the Original Credit
Agreement; and


 

















 


WHEREAS, the KKR Entities
(excluding KKR CLO 2009-1) constitute, as of the date hereof, all of the
Borrowers under the Original Credit Agreement, and KKR CLO 2009-1 shall become
a Borrower under the Credit Agreement upon the effectiveness of this Amendment No. 1;


 


NOW THEREFORE, in
consideration of the premises and for other good and valuable consideration,
the parties agree as follows:


 


Section 1                                            Defined
Terms.  Except as
otherwise specified herein or as the context may otherwise require, capitalized
terms used but not otherwise defined in this Amendment No. 1 (including in
the recitals hereto) have the respective meanings set forth in the Original
Credit Agreement.


 


Section 2                                            Effectiveness
of this Amendment No. 1.  This Amendment No. 1 will be effective
as of the date hereof (the “Effective Date”).


 


Section 3                                            Amendments.  From and after the Effective Date, the
Original Credit Agreement and the Security Agreement shall be amended as
follows:


 


(a)           The words “KKR Financial CLO 2009-1,
Ltd.,” are added to the introductory paragraph of the Original Credit Agreement
after the words “and collectively with” and before the words “KKR Financial,
KKR TRS LTD.”


 


(b)           The following definitions shall be
added to Section 1.01 of the Original Credit Agreement in alphabetical
order relative to the other words, terms and phrases defined therein:


 


(i)                                    “Additional
Financial Assets” has the meaning specified in Section 6.13.


 


(ii)                                 “Amendment
Effective Date” means the “Effective Date” under (and as defined in)
Amendment No. 1.


 


(iii)                              “Amendment
Effective Date Collateral” means all assets described on Schedule I to
Amendment No. 1.


 


(iv)                             “Amendment No. 1”
means Amendment No. 1 dated as of August 5, 2009 to this Agreement


 


(v)                                “Cash
Equivalents” means Investments that, as of any date of determination, are
short-term highly liquid investments that (i) are (or, without regard to
any applicable rating requirements, are in the nature of) Permitted
Investments, (ii) are readily convertible into cash, and (iii) have
an original maturity of three months or less.


 


(vi)                             “CLO Entity”
means any of the following:  (a) KKR
Financial CLO 2005-1, Ltd., a Cayman Islands company, (b) KKR Financial
CLO 2005-2, Ltd., a Cayman Islands company, (c) KKR Financial CLO 2006-1,
Ltd., a Cayman Islands company, (d) KKR Financial CLO 2007-1, Ltd., a
Cayman Islands company, (e) KKR Financial CLO 2007-A, Ltd., a Cayman
Islands company and (f) KKR CLO 2009-1.


 


(vii)                          “KKR CLO
2009-1” means KKR Financial CLO 2009-1, Ltd., a Cayman Islands company.


 


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(viii)                      “KKR
Revolving Credit Agreement” means that certain Revolving Credit Agreement
dated November 10, 2008, by and between the lenders identified therein,
including KKR Financial Advisors LLC and Kohlberg Kravis Roberts & Co.
(Fixed Income) LLC, and the borrowers identified therein, including the
Borrowers (other than KKR CLO 2009-1).


 


(ix)                              “Qualified Institutional Buyer” means a “qualified
institutional buyer” as defined in Rule 144A under the Securities Act of
1933, as amended.


 


(x)                                 “Reporting Date” means the third Business Day of each
calendar week.


 


(xi)                              “Commitment Step-Down Date” means each of the
Initial Commitment Step-Down Date, the Second Commitment Step-Down Date, the
Third Commitment Step-Down Date, the Fourth Commitment Step-Down Date and the
Commitment Adjustment Date.


 


(xii)                           “Initial
Commitment Step-Down Date” means the date of Amendment No. 1.


 


(xiii)                        “Second
Commitment Step-Down Date” means September 30, 2009 or, if such day is
not a Business Day, the next succeeding Business Day.


 


(xiv)        “Third Commitment
Step-Down Date” means December 31, 2009 or, if such day is not a
Business Day, the next succeeding Business Day.


 


(xv)         “Fourth Commitment
Step-Down Date” means March 31, 2010 or, if such day is not a Business
Day, the next succeeding Business Day.


 


(xvi)        “Securities Account”
has the meaning specified in the Uniform Commercial Code of the relevant
jurisdiction.


 


(xvii)       “Subordination and Standstill Agreement” means an
intercreditor, subordination, subordination and standstill or similar agreement
executed by and between the Lenders (or the Administrative Agent on their
behalf) and the other holder(s) of Liens on the Collateral, providing, at
a minimum, that all such Liens on the Collateral are subordinate in their
entirety to the Lien of the Security Agreement, that such other holder(s) will
not exercise any rights against the Collateral or the obligors thereunder for a
period reasonably acceptable to the Lenders following payment in full of the
Obligations, that such other holder(s) waive all rights in a bankruptcy or
insolvency of any related party, together with other customary provisions
reasonably requested by the Lenders.


 


(c)           The definitions of “Adjusted
Commitment”, “KKR Structured Finance Transaction” and “KKR Structured Finance
Vehicle” in Section 1.01 of the Original Credit Agreement shall be deleted
in their entirety without replacement.


 


(d)           The definition of “Audited Financial
Statements” shall be amended by deleting “2007” and replacing it with “2008.”


 


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(e)           The definition of “Commitment” in Section 1.01
of the Original Credit Agreement shall be deleted in its entirety and replaced
with the following:


 


““Commitment”
means, as to each Lender, its obligation to make Loans to the Borrowers
pursuant to Section 2.01, in an aggregate principal amount at any
one time outstanding (expressed in Dollars) not to exceed:  (1) with respect to each Initial Lender,
(a) prior to the Initial Commitment Step-Down Date, an amount equal to
$150,000,000, (b) on and after the Initial Commitment Step-Down Date and
prior to the Second Commitment Step-Down Date, an amount equal to $100,000,000,
(c) on and after the Second Commitment Step-Down Date and prior to the
Third Commitment Step-Down Date, an amount equal to the lesser of (i) the
product of (A) such Lender’s Applicable Percentage immediately prior to
the Second Commitment Step-Down Date, multiplied by (B) $187,500,000, and (ii) such
Lender’s Commitment immediately prior to the Second Commitment Step-Down Date, (d) on
and after the Third Commitment Step-Down Date and prior to the Fourth
Commitment Step-Down Date, an amount equal to the lesser of (i) the
product of (A) such Lender’s Applicable Percentage immediately prior to
the Third Commitment Step-Down Date, multiplied by (B) $175,000,000, and (ii) such
Lender’s Commitment immediately prior to the Third Commitment Step-Down Date, (e) on
and after the Fourth Commitment Step-Down Date and prior to the Commitment
Adjustment Date, the lesser of (i) the product of (A) such Lender’s
Applicable Percentage immediately prior to the Fourth Commitment Step-Down
Date, multiplied by (B) $162,500,000, and (ii) such Lender’s
Commitment immediately prior to the Fourth Commitment Step-Down Date, and (f) on
and after the Commitment Adjustment Date, an amount equal to the lesser of (i) the
product of (A) such Lender’s Applicable Percentage immediately prior to
the Commitment Adjustment Date, multiplied by (B) $150,000,000 and (ii) such
Lender’s Commitment immediately prior to the Commitment Adjustment Date; and (2) with
respect to each other Lender, an amount set forth in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto; provided
that each such amount set forth in clauses (1) and (2),
respectively, of this definition shall be adjusted from time to time in
accordance with this Agreement including in connection with a termination or
reduction contemplated by Section 2.05 or a transfer or assignment
contemplated by Section 10.06.”


 


(f)            The definition of “Commitment
Adjustment Date” in Section 1.01 of the Original Credit Agreement shall be
deleted in its entirety and replaced with the following:


 


““Commitment Adjustment
Date” means June 30, 2010 or, if such date is not a Business Day, the
next succeeding Business Day.”


 


(g)           The definition of “Commitment Excess”
in Section 1.01 of the Original Credit Agreement shall be deleted in its
entirety and replaced with the following:


 


““Commitment Excess”
means, with respect to each Initial Lender, as of any date of determination, an
amount equal to the excess (if any) of (a) the Outstanding Amount of such
Initial Lender’s Loans as of such date of determination, over (b) such
Initial Lender’s Commitment as of such date of determination after giving
effect to any reduction therein pursuant to the definition of “Commitment.”


 


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(h)           The definition of “Control Agreement”
in Section 1.01 of the Original Credit Agreement shall be deleted in its
entirety and replaced with the following:


 


““Control Agreement”
means, with respect to (i) each Pledged Account that constitutes a Deposit
Account, a deposit account control agreement which complies with Article IX
of the Uniform Commercial Code as in effect in the relevant jurisdiction, and (ii) each
Pledged Account that constitutes a Securities Account, a securities account
control agreement which complies with Article VIII of the Uniform
Commercial Code as in effect in the relevant jurisdiction, in each case entered
into by the bank at which such Pledged Account is located, each Borrower with
respect to such Pledged Account and the Administrative Agent on behalf of
itself and the Lenders, in form and substance reasonably acceptable to the
Administrative Agent.”


 


(i)            The definition of “Fee Letter” in Section 1.01
of the Original Credit Agreement shall be deleted in its entirety and replaced
with the following:


 


““Fee Letter” means,
together, (i) the letter agreement, dated November 10, 2008, between
KKR Financial, the Administrative Agent and the Arrangers, and (ii) the
letter agreement, dated August 5, 2009, between KKR Financial, the
Administrative Agent and the Arrangers.”


 


(j)            The definition of “Financing SPE” in
Section 1.01 of the Original Credit Agreement shall be amended to add the
following at the end of such definition:


 


“It is understood and agreed
that KKR CLO 2009-1 is a Financing SPE for purposes of this Agreement.”


 


(k)           The definition of “KKR Financial Form 10-K”
in Section 1.01 of the Original Credit Agreement shall be deleted in its
entirety and replaced with the following:


 


““KKR Financial Form 10-K”
means KKR Financial’s Annual
Report on Form 10-K filed with the SEC on March 2, 2009, as amended
prior to the date of Amendment No.1.”


 


(l)            The definition of “Maturity Date” in
Section 1.01 of the Original Credit Agreement shall be deleted in its
entirety and replaced with the following:


 


““Maturity Date”
means November 10, 2011, and, if such date is not a Business Day, the
Maturity Date shall be the next preceding Business Day.”


 


(m)          The definition of “Non-U.S. Borrower”
in Section 1.01 of the Original Credit Agreement shall be deleted in its
entirety and replaced with the following:


 


““Non-U.S. Borrower”
means any of KKR TRS LTD, KKR Holdings LTD or KKR CLO 2009-1.”


 


(n)           The definition of “Pledged Accounts”
shall be deleted in its entirety and replaced with the following:


 


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““Pledged Accounts”
means all operating Deposit Accounts and Securities Accounts owned by or on
behalf of any Borrower or any Subsidiary (excluding any such Securities Account
that will be closed within 30 days of the Amendment Effective Date, provided
that all funds deposited therein are transferred to a Pledged Account within
one Business Day of such deposit), which accounts in existence as of the
Closing Date and as of the Amendment Effective Date are identified on Schedule
II hereto.”


 


(o)           The definition of “Specified
Financial Assets” in Section 1.01 of the Original Credit Agreement shall
be amended by (i) deleting “or” at the end of clause (j); (ii) replacing
“.” with “; or” at the end of clause (k), and (iii) adding the following
after clause (k):


 


“(l)          the Amendment Effective Date
Collateral and the Additional Financial Assets.”


 


(p)           The definition of “Subsidiary” in Section 1.01
of the Original Credit Agreement shall be deleted in its entirety and replaced
with the following:


 


““Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person; provided that each Non-U.S. Borrower shall be considered a
Subsidiary of KKR Financial so long as KKR Financial owns (directly or
indirectly through other Subsidiaries) a majority of the preferred shares of
such Non-U.S. Borrower; and provided  further that none of the CLO
Entities (other than KKR CLO 2009-1) shall be considered a Subsidiary of any
Borrower for so long as any Person other than KKR Financial or a Subsidiary or
any affiliate thereof holds any Indebtedness of such CLO Entity.  Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of KKR Financial.”


 


(q)           The first sentence of Section 2.01
is deleted in its entirety and replaced with the following:


 


“Subject to the terms and
conditions set forth herein, each Lender severally agrees to make Loans in any
Approved Currency to the Borrowers from time to time, on any Business Day
during the Availability Period, in an aggregate amount not to exceed at any
time outstanding the amount of such Lender’s Commitment; provided that
only Fixed Period Eurodollar Loans may be denominated in an Alternate Currency;
and provided, further, that immediately after giving effect to
any Loan, (i) there does not exist a Borrowing Base Deficiency greater
than zero, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender does not exceed such Lender’s Commitment.”


 


(r)            Section 2.04(b) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(b)         [Reserved]”


 


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(s)           Section 2.04(c) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(c)         If for any reason, at any time, there exists a Borrowing
Base Deficiency greater than zero, then the Borrowers shall immediately prepay
the applicable Loans in an aggregate amount equal to such Borrowing Base
Deficiency.”


 


(t)            Section 2.06(b) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(b)         On each Commitment Step-Down Date, the Borrowers shall repay
to each Initial Lender the principal amount of the Commitment Excess then in
effect for such Initial Lender on such date.”


 


(u)           Section 5.23 of the Original
Credit Agreement is deleted in its entirety and replaced with the following:


 


“5.23      Pledged Accounts.  The accounts identified on Schedule
II hereto constitute all of the Pledged Accounts in existence on the
Closing Date and on the Amendment Effective Date, and such Pledged Accounts
constitute Collateral and are subject to the Lien of the Security Agreement.”


 


(v)           The following Sections 5.24 and 5.25,
respectively, shall be added at the end of Article V of the Original
Credit Agreement:


 


“5.24.  Amendment Effective Date Collateral.  The Amendment Effective Date
Collateral constitutes any and all loans, bonds, instruments, securities, and
financial assets (excluding cash and Cash Equivalents that have been deposited
into a Pledged Account) directly or indirectly, legally or beneficially owned
by or held for the benefit of one or more Borrowers or their respective
Subsidiaries as of the Amendment Effective Date, and such Amendment Effective
Date Collateral is subject to the Lien of the Security Agreement.  For purposes of the
foregoing, the assets described on Schedule 5.24 (collectively, the “SCF
Assets”) are not legally or beneficially owned by or held for the benefit
of any Borrower or Subsidiary and therefore are not part of the Amendment
Effective Date Collateral (notwithstanding the fact that the transfer of such
assets has not yet been settled unless the physical transfer of such assets has
not occurred within 60 days of the date of Amendment No. 1).


 


5.25.  KKR CLO 2009-1.  All Indebtedness of and Equity Interests in
KKR CLO 2009-1 are beneficially owned and, except to the extent they constitute
Collateral, legally owned and controlled by one or more Borrowers and/or
consolidated Subsidiaries thereof.  Any
and all Liens on and Indebtedness secured by any Collateral owned, held or
controlled by, or constituting collateral pledged by, KKR CLO 2009-1 are and shall
remain subject and subordinate to the Lien of the Security Agreement with
respect to such Collateral, and the holder(s) of any such liens or
indebtedness have agreed, pursuant to a market subordination and standstill or
similar agreement, to subordination and standstill provisions reasonably
acceptable to the Lenders including, at a minimum, that such holder(s) shall
not exercise any rights with respect to such Collateral or otherwise until 90
days after payment in full of the Obligations and that such liens would not
adversely affect the security interest and Lien of the Lenders in such
Collateral or interfere with any


 


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claim of the Lenders with
respect to such Collateral, including in the event of the bankruptcy or
insolvency of any party.”


 


(w)          Sections 6.02(d) and (e) of
the Original Credit Agreement shall be amended to delete the words “on a weekly
basis” in each place where such words appear and to substitute therefor the
words “on each Reporting Date” in each such place.


 


(x)            Section 6.02(f) of the
Original Credit Agreement shall be deleted in its entirety and replaced with
the following:


 


“(f)          [Reserved]”


 


(y)           Section 6.12(a) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“              (a) Prior to the Commitment Adjustment Date,
deposit or cause to be deposited into a Pledged Account that constitutes
Collateral and is subject to the Lien of the Security Agreement, all of the
following: (i) all funds received with respect to the ownership and
operation of the business of any Borrower and/or any Subsidiary or any other
operating cash flow, and all payments on and proceeds of the Collateral, in
each case in the possession of, held on behalf of or under the control of, any
Borrower and/or any Subsidiary; and (ii) all Sales Proceeds.”


 


(z)            Section 6.12(c) of the
Original Credit Agreement shall be amended (i) to delete the words “Within
45 days of the date of this Agreement” and to substitute therefor the words “Within
30 days of the Amendment Effective Date “ and (ii) to delete the words “on
such date and on the Closing Date” and to substitute therefor the words “on
such date, on the Closing Date and on the Amendment Effective Date”.


 


(aa)         Section 6.13 of the Original
Credit Agreement is deleted in its entirety and replaced with the following:


 


“6.13      Additional Collateral.


 


(a)           Promptly following (or, in the case
of Amendment Effective Date Collateral, by) the later of (i) the Amendment
Effective Date and (ii) the date of the acquisition or transfer thereof,
grant a first priority perfected security interest to the Administrative Agent
in the following, as additional Collateral subject to the Lien created by the
Security Documents, and execute and deliver any documents reasonably requested
by the Administrative Agent and the Collateral Agent in connection therewith: (y) any
and all loans, bonds, instruments, securities, and financial assets (excluding
cash and Cash Equivalents that have been deposited into a Pledged Account)
directly or indirectly acquired by or otherwise transferred to or for the
benefit of one or more Borrowers or their respective Subsidiaries following the
Amendment Effective Date (any such loans, bonds, instruments or securities,
other than the foregoing cash and Cash Equivalents, being “Additional
Financial Assets”); and (z) the Amendment Effective Date
Collateral.  Promptly following (and in
any event within 30 days of) such grant, take all actions necessary on its part
to otherwise deliver possession, record ownership and control of such
Collateral to the Administrative Agent (or the Collateral Agent on its behalf)
to the extent required by, and in accordance with the provisions of, the
Security Documents and the Collateral Agreement, provided, that, for the
avoidance of doubt, the Liens on such 


 


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Collateral are required to
constitute fully perfected first priority Liens in favor of the Administrative
Agent in accordance with, and on the date required under, the preceding
sentence.


 


(b)           With respect to
any Collateral (including the Amendment Effective Date Collateral and the
Additional Financial Assets) acquired after the Closing Date that is required
to be subject to the Lien created by any of the Security Documents but is not
so subject, promptly (and in any event within 20 days after the acquisition
thereof or, with respect to the Amendment Effective Date Collateral, on or
prior to the Amendment Effective Date) (i) execute and deliver to the
Administrative Agent and the Collateral Agent such amendments or supplements to
the relevant Security Documents or such other documents as the Administrative
Agent or the Collateral Agent shall deem necessary or advisable to grant to the
Collateral Agent, for its benefit and for the benefit of the Secured Party, a
Lien on such property which is not otherwise subject to any equal or prior
security interest, lien or encumbrance other than liens in favor of the
Administrative Agent for the benefit of the Lenders, and (ii) take all
actions necessary to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable law, including
the filing of financing statements in such jurisdictions as may be reasonably
requested by the Administrative Agent. 
Borrower shall otherwise take such actions and execute and/or deliver to
the Collateral Agent such documents as the Administrative Agent or the Collateral
Agent shall require to confirm the validity, perfection and priority of the
Lien of the Security Documents on such after-acquired properties.”


 


(bb)        The following Section 6.14 shall be
added at the end of Article VI of the Original Credit Agreement:


 


“6.14      KKR CLO 2009-1.  With respect to any Indebtedness of KKR CLO
2009-1 owned, held or controlled by any Borrower or Subsidiary (such Borrower
or Subsidiary, for purposes of this Section 6.14, the “Debt
Holder”), which Indebtedness is purportedly covered by a Subordination and
Standstill Agreement entered into on behalf of the Debt Holder by a trustee,
agent or other representative, comply or cause the Debt Holder to comply, as
applicable, with such Subordination and Standstill Agreement as if such Debt
Holder was a direct signatory thereof.”


 


(cc)         Section 7.01(a) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(a)         as to Collateral only, (i) Liens created pursuant to
any Loan Document, (ii) Permitted Encumbrances (only with respect to clauses
(a) and (e) of the definition thereof) and (iii) Liens
securing Secured Indebtedness permitted under Section 7.03(k), in
each case which are subordinate to the Lien of the Administrative Agent on such
Collateral and, in the case of Liens described in clause (iii) of
this Section 7.01(a) and/or in Section 7.01(b)(iii),
which are subject to a Subordination and Standstill Agreement reasonably
acceptable to the Administrative Agent;”.


 


(dd)        Section 7.01(b)(iii) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“              (iii)                               Liens existing
on the date hereof (or, in the case of KKR CLO 2009-1, on the Amendment
Effective Date) and listed on Schedule 7.01, and any renewals or 


 


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extensions thereof, provided
that (A) the property or asset covered thereby is not changed, (B) the
amount secured or benefited thereby is not increased except as contemplated by Section 7.03(b) (C) the
direct or any contingent obligor with respect thereto is not changed, (D) any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.03(b), and (E) any related
intercreditor, subordination and standstill or similar agreement is not changed
without the prior consent of the Administrative Agent;”


 


(ee)         Sections 7.02(c), 7.02(f) and 7.03(c) of
the Original Credit Agreement are each amended to delete the phrase “, subject
to Section 7.15”.


 


(ff)          Sections 7.03(a) and 7.03(b) of
the Original Credit Agreement are deleted in their entirety and replaced with
the following:


 


“                                          (a)                                  Indebtedness
created pursuant to the Loan Documents;


 


(b)           Indebtedness outstanding on the date
hereof (or, in the case of KKR CLO 2009-1, on the Amendment Effective Date)
listed on Schedule 7.03, and any refinancings, refundings, renewals or
extensions thereof; provided that (i) the terms and conditions of
such extensions, renewals or refinancings of such Indebtedness do not, in the
Administrative Agent’s reasonable judgment, materially impair the prospects of
repayment of the Obligations by the Borrowers or impair any Borrower’s
creditworthiness, (ii) such extensions, renewals or refinancings of such
Indebtedness do not result in an increase in the principal amount of such
Indebtedness so extended, renewed or refinanced or add any Borrower as liable
with respect thereto if such Borrower was not liable with respect to the
original Indebtedness, and (iii) the holders of such Indebtedness are
subject to a Subordination and Standstill Agreement reasonably acceptable to
the Administrative Agent and the provisions thereof are not changed without the
prior consent of the Administrative Agent;”


 


(gg)        Section 7.03(k) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(k)         Secured Indebtedness having (i) no scheduled principal
payments due thereon prior to maturity and (ii) a maturity no earlier than
90 days following the Maturity Date; provided any Lien on Collateral securing
such Secured Indebtedness is subordinate to the Lien of the Administrative
Agent on such Collateral and is subject to a Subordination and Standstill
Agreement reasonably acceptable to the Administrative Agent;”.


 


(hh)        Section 7.03 of the Original Credit
Agreement is further amended to add “; and” at the end of clause (l) and
to add the following new clause (m) immediately after clause (l):


 


“(m)        Indebtedness under the KKR Revolving Credit Agreement.”


 


(ii)           Section 7.03 of the Original
Credit Agreement is further amended to add the following at the end of such
Section:


 


“Notwithstanding the
foregoing, in no event shall any Borrower Guarantee the Indebtedness of any CLO
Entity.”


 


10

















 


(jj)           Section 7.05(e) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(e)         Dispositions of property by a Subsidiary to a Borrower or to
a consolidated Subsidiary including, but not limited to, any Disposition by KKR
CLO 2009-1 to KKR Financial or to a consolidated Subsidiary thereof.”


 


(kk)         Section 7.06(a) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(a)         so long as (i) no event constituting a Default under Sections
8.01(a), 8.01(f) or 8.01(h) shall have occurred and
be continuing, and (ii) no Event of Default shall have occurred and be
continuing, in each case, at the time of or would result therefrom, KKR
Financial may, subject to Section 7.09(c), (A) declare and
make Restricted Payments in cash to any Person that owns an Equity Interest in
KKR Financial, and (B) declare and make Restricted Payments in cash to any
Person that owns, and in order to effect a repurchase of, notes convertible
into Equity Interests of KKR Financial or any Trust Preferred Indebtedness, provided
that such Restricted Payment under this sub-clause (B) (excluding ratable
distributions made to the holders of such convertible notes or Trust Preferred
Indebtedness constituting scheduled payments made in accordance with the terms
of the related governing documents) may not be made unless (x) after
giving effect thereto, the aggregate amount of all such Restricted Payments
made since the Amendment Effective Date would not exceed $50,000,000, and (y) no
Borrowing Base Deficiency exists;”.


 


(ll)           Section 7.07 of the Original
Credit Agreement is amended to add the words “and sales permitted by Section 9.10”
at the end of clause (d) thereof.


 


(mm)       The reference to “$1,000,000,000” in Section 7.09(a) of
the Original Credit Agreement is hereby deleted and replaced with “$700,000,000”.


 


(nn)         Section 7.08 of the Original
Credit Agreement is amended to add the following words at the end of clause (D) thereof,
before the words “, and”: “; provided, that such Indebtedness does not
restrict the ability of any Borrower to grant a first Lien on any Collateral
pursuant to the Security Agreement.”


 


(oo)         Section 7.09(c) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“(c)         Dividends. 
Make any distributions to their respective shareholders (other any such
shareholder that is itself a Borrower or a Subsidiary) in respect of any
taxable year in an aggregate amount (as to all such shareholders) in excess of
50% of KKR Financial’s estimated taxable income in respect of such taxable year as reasonably determined by KKR
Financial (determined without regard to gains and losses recognized on the
disposition of investments, which are generally determined on a
partner-by-partner basis with reference to each partner’s tax basis in their
partnership interest); provided, that no such
distributions shall be made unless, before and after giving effect thereto, no
Borrowing Base Deficiency exists or would exist; and provided, further,
that notwithstanding
the limitation on distributions (and in addition to the amount of permitted
distributions) set forth above in this Section 7.09(c), any Borrower or
Subsidiary that is a real estate investment trust for tax purposes may make
distributions to 


 


11

















 


the preferred shareholders
of such real estate investment trust in respect of any taxable year in an
amount that is not in excess of an amount equal to the lesser of (A) the
amount necessary to be distributed by such real estate investment trust in
order to maintain its status as a real estate investment trust for tax
purposes, and (B) $50,000;”


 


(pp)        Section 7.15 of the Original Credit
Agreement is deleted in its entirety and replaced with the following:


 


“7.15      KKR CLO 2009-1.  Permit KKR CLO 2009-1 to issue or
otherwise incur Indebtedness or issue Equity Interests to any Person other than
KKR Financial or its consolidated Subsidiaries; or effect a Disposition of any
Indebtedness of, or Equity Interests in, KKR CLO 2009-1 to any Person other
than KKR Financial or its consolidated Subsidiaries; take or fail to take any
action that would breach, violate, conflict with, or contravene any
Subordination and Standstill Agreement governing or relating to KKR CLO 2009-1
and the Collateral held, owned or controlled thereby; or file or commence (or
cause any Person to file or commence) any claim with respect to, or commence
(or cause any Person to commence) any proceeding relating to, the involuntary
bankruptcy, insolvency, receivership, liquidation, reorganization or similar
proceeding of KKR CLO 2009-1.”


 


(qq)        Section 8.01(b) of the
Original Credit Agreement is deleted in its entirety and replaced with the
following:


 


“                                          (b)                                 Specific
Covenants.  Any
Borrower fails to perform or observe any term, covenant or agreement contained
in any of Section 6.03 (Notices), 6.05(a) (Preservation of
Existence), or 6.11 (Use of Proceeds) or Article VII (Negative
Covenants). Any Borrower fails to perform or observe any covenant contained in Section 6.02
(Certificates; Other Information) (other than the proviso in the first sentence
of the penultimate paragraph thereof), Section 6.13 (Additional
Collateral), and Section 6.14 (KKR CLO 2009-1) and such failure
continues for five (5) Business Days after notice thereof from the
Administrative Agent; or”


 


(rr)          Section 9.10(b) of the
Original Credit Agreement shall be deleted in its entirety and the following
substituted therefor:


 


“                                          (b)                                 The Borrowers
at any time may effect a sale or exchange of any Specified Financial Asset constituting
Collateral and, as contemplated by Section 9.10(a), obtain a
release of any Lien thereon granted to or held by the Administrative Agent
under any Loan Document; provided, that (i) the Borrowers shall
deposit any Sales Proceeds received in connection with the sale or exchange of
such Specified Financial Asset into a Pledged Account that constitutes
Collateral, (ii) the Borrowing Base Deficiency would be zero after giving
effect to the subject sale or exchange, and (iii) the conditions set forth
in Section 2.3(a) of the Security Agreement are satisfied in
connection with such release; and provided, further, that,
notwithstanding anything herein to the contrary, the Borrowers may at any time
surrender notes or other securities of a CLO Entity, or exchange any such notes
or securities for other notes or securities, or cancel any convertible notes or
Trust Preferred Indebtedness of any Borrower or Subsidiary thereof that have
been repurchased by a Borrower or any such Subsidiary, and obtain a release of
the Administrative Agent’s Lien on the notes or securities so disposed of or
cancelled, if (x) the conditions set forth in Section 2.3(a) of
the Security Agreement are satisfied in connection with such release and (y) the
Borrowing Base Deficiency would be zero after 


 


12

















 


giving effect to such
surrender, exchange or cancellation; and provided, further, that
references to “exchange” in this Section 9.10(b) shall mean an
exchange effected in connection with a convertible notes exchange offer,
conversion privilege, reorganization, recapitalization, tender offer, exchange
offer or similar right reasonably acceptable to the Administrative Agent,
represented by a Specified Financial Asset in accordance with the terms
thereof.


 


(ss)         Clause (B) of Section 10.06(a) of
the Original Credit Agreement is deleted in its entirety and replace with the
following:


 


“(B) in any event, only
if the assignee, participant or pledgee is a Qualified Purchaser and a
Qualified Institutional Buyer; provided that (in the absence of actual
knowledge to the contrary) no existing Lender takes any responsibility for
determining whether any assignee, participant or pledgee is a Qualified
Purchaser or a Qualified Institutional Buyer other than to obtain a
certification therefrom to that effect or to have a reasonable belief that such
assignee, participant or pledgee is a Qualified Purchaser or a Qualified
Institutional Buyer, as applicable.”


 


(tt)          Section 10.06(h) of the
Original Credit Agreement is deleted in its entirety and replace with the
following:


 


“                                          (h)                                 Each Initial
Lender hereby represents that, as of the date of this Agreement, it is a
Qualified Purchaser and a Qualified Institutional Buyer.”


 


(uu)        Section 10.20 of the Original
Credit Agreement is amended to add the following at the end of such Section:


 


“In the event there is more
than one Pledged Account, such excess shall be allocated among the Pledged
Accounts in accordance with the written instructions of KKR Financial.”


 


(vv)        Schedule II of the Original Credit
Agreement is hereby amended to reflect the addition of the information set
forth on Exhibit 3A attached hereto.


 


(ww)       The reference to “3.0%” in the definition
of “Applicable Rate” in the Glossary on Schedule III to the Original Credit
Agreement is hereby deleted and replaced with “4.0%”.


 


(xx)         Schedule 5.06 of the Original Credit
Agreement is amended to add the additional disclosures set forth on Exhibit 3B
hereto.


 


(yy)        Schedule 5.24 is hereby added to the
Original Credit Agreement, in the form and including the information set forth
on Exhibit 3C attached hereto.


 


(zz)         Schedules 7.01 and 7.03 of the Original
Credit Agreement are hereby amended to reflect the addition of the information
relating to KKR CLO 2009-1 set forth on Exhibits 3C and 3D attached hereto,
respectively.


 


(aaa)       Schedule 10.02 of the Original Credit
Agreement is deleted in its entirety and replaced by a new Schedule 10.02 in
the form and including the information set forth on Exhibit 3E attached
hereto.


 


13

















 


(bbb)      Exhibit A (form of Loan Notice), Exhibit C
(form of Promissory Note), Exhibit D (form of Borrowing Base Report), Exhibit E
(form of Compliance Certificate), and Exhibit F (form of Assignment and
Assumption) to the Original Credit Agreement shall be amended to add the name
of KKR CLO 2009-1 as party thereto in the capacity of Borrower wherever the
names of the other Borrowers appear.


 


(ccc)       Exhibit E to the Original Credit
Agreement (the form of Compliance Certificate) shall be further amended by
deleting the Dollar amount appearing opposite the term “Minimum Required
Consolidated Tangible Net Worth” in Line I.B of Schedule 2 thereof and to
substitute therefor the Dollar  amount “$700,000,000”.


 


(ddd)      Annex I to Exhibit F to the Original
Credit Agreement is amended to add the words “and a Qualified Institutional
Buyer” following the words “Qualified Purchaser”.


 


(eee)       The Security Agreement is amended by
adding the words “KKR Financial CLO 2009-1, Ltd.,” to the introductory
paragraph of the Security Agreement after the words “and together with” and
before the words “KKR Financial, KKR TRS LTD.”


 


(fff)         Section 2.1 of the Security
Agreement is amended to add the words “, all Amendment Effective Date Collateral
and all Additional Financial Assets” at the end of clause (a) immediately
before the semi-colon.


 


(ggg)      Section 2.3(a) of the Security
Agreement is deleted in its entirety and replaced by the following:


 


“(a) As soon
as reasonably practicable following the written request of any Company for the
release of the Administrative Agent’s security interest in any portion of the
Collateral, the Administrative Agent, on behalf of the Lenders, hereby agrees
to provide for the release of such Collateral:


 


(i)            upon termination of
the Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations);


 


(ii)           where the Credit
Agreement is otherwise terminated in accordance with its terms;


 


(iii)          in the event of a
sale or exchange of a Specified Financial Asset constituting Collateral as
permitted under the Credit Agreement or under any other Loan Document; or


 


(iv)         in connection with
any other action to be taken by such Company with respect to such Collateral to
the extent not expressly prohibited under the Credit Agreement or any other
Loan Document; provided that the Company shall have complied with the
requirements of Section 9.10 of the Credit Agreement, if applicable;


 


provided that (A) the
Administrative Agent shall have received from the Companies contemporaneously
with such written request (1) an updated Borrowing Base Report reflecting
the Borrowing Base both immediately before and immediately after giving effect
to the release and (2) a certificate that no Default or Event of Default
has occurred 


 


14

















 


and is continuing or would
exist or occur after giving effect to the release, (B) no Default or Event
of Default has occurred and is continuing or would otherwise exist or occur
after giving effect to the release, (C) no amounts are due and owing to
the Administrative Agent under the Control Agreement, and (D) the
Borrowing Base Deficiency is zero and will continue to be zero after giving
effect to the release.”


 


(hhh)      Section 2.3(b) of the Security
Agreement is hereby amended (i) by deleting the words “conditions set
forth in Section 2.3(a)” and replacing them with the words “conditions set
forth in the last proviso of Section 2.3(a)” and (ii) deleting the
reference to “clauses (B) and (C)” and replacing it with a reference to “clauses
(B), (C) and (D)”.


 


(iii)          Section 5.2 of the Security
Agreement is deleted and the following substituted therefor:


 


“5.2        Pledged Accounts.  The Companies shall promptly notify the
Administrative Agent in writing of any operating deposit account and/or
operating securities account referred to in Section 2.1(d) that
is opened by or on behalf of any Company or a Subsidiary thereof after the date
of the Original Credit Agreement.  For
each such operating account that any Company or any Subsidiary thereof
currently maintains (excluding any such Securities Account that will be
closed within 30 days of the Amendment Effective Date, provided that all funds
deposited therein are transferred to a Pledged Account within one Business Day
of such deposit), or
at any time hereafter opens and maintains, such Company shall under an
agreement in form and substance satisfactory to the Administrative Agent
(acting reasonably) cause (or cause such Subsidiary to cause) the depositary
bank to agree to comply, without further consent of the Company (or such
Subsidiary), at any time with instructions from the Administrative Agent to
such depositary bank directing the disposition of funds from time to time
credited to such account.”


 


(jjj)          The second sentence of Section 18
of the Security Agreement is amended by deleting such sentence in its entirety
and replacing it with the following:


 


“After deducting
all of said expenses, the residue of any proceeds of collection or sale or
other disposition of Collateral shall, to the extent actually received in cash,
be applied to the payment of the Obligations in such order or preference as is
provided in the Credit Agreement, reasonable allowance and provision being made
for any Obligations not then due, and any excess remaining thereafter shall be
distributed to the Pledged Accounts in accordance with Section 10.20 of
the Credit Agreement.”


 


(kkk)       Section 24 of the Security Agreement
is amended to delete the words “Each of KKR TRS Ltd. and KKR Holdings Ltd.” and
to substitute therefor the words “Each Non-U.S. Borrower”.


 


(lll)          Exhibit A of the Security
Agreement is deleted in its entirety and replaced by a new Exhibit A in
the form set forth on Exhibit 4 attached hereto.


 


Section 4                                           Addition
of KKR CLO 2009-1 as Borrower.  On the Effective Date, KKR CLO 2009-1 shall
become a party to the Credit Agreement, the Security Agreement, the Collateral
Agreement and the Fee Letter, as a Borrower, a Company, a Pledgor and an
addressee, respectively, thereunder and shall have the rights and obligations
of a “Borrower” under the Credit Agreement, of a “Company” under the Security
Agreement, of a “Pledgor” under the Collateral Agreement, and of an 


 


15

















 


addressee
under the Fee Letter.  As of the
Effective Date, (i) the Collateral Agreement is deemed amended by adding
the words “KKR Financial CLO 2009-1, Ltd.,” to the introductory paragraph of
the Collateral Agreement after the words “and together with” and before the
words “KKR Financial, KKR TRS LTD” and (ii) the Fee Letter is deemed
amended by adding “KKR Financial CLO 2009-1, Ltd.” as an addressee following
the words “KKR Financial Holdings, Ltd.” 
In connection therewith, KKR CLO 2009-1 confirms and agrees that it has
granted, and it hereby does grant, to the Administrative Agent, for the benefit
of the Lenders and the Administrative Agent, to secure the payment and
performance in full of all of the Obligations, a security interest in, and
pledges and assigns to the Administrative Agent for the benefit of the Lenders
and the Administrative Agent, all of its right, title and interest in, to and
under the Collateral, whether now existing or hereafter acquired, arising or
created, and any and all proceeds thereof. 
In addition, the Collateral Agent hereby acknowledges that, with respect
to  any Collateral delivered by or on
behalf of KKR CLO 2009-1 from and after the Effective Date, upon obtaining
possession or control thereof, it shall hold such Collateral as the
representative of any applicable second lien secured parties solely for
purposes of Lien perfection (as their interests may appear in any related
Subordination and Standstill Agreement); provided that the Collateral
Agent shall not have any duty or liability to protect or preserve any rights of
such second lien secured parties pertaining to any of such Collateral.


 


Section 5                                             Conditions
to Amendment No. 1.  In connection with their execution and
delivery of this Amendment No. 1, the KKR Entities shall, on or prior to
the Effective Date:


 


(a)           pay to each Lender,
by wire transfer of immediately available funds on the Effective Date to an
account designated by such Lender, any fees required to be paid under the Fee
Letter dated the date hereof or any other Loan Document;


 


(b)           comply with the
provisions of Section 6.13 of the Credit Agreement with respect to the
Amendment Effective Date Collateral;


 


(c)           deliver to the
Administrative Agent and the Lenders:


 


(i)            such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Borrower as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Amendment No. 1;


 


(ii)           such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Borrower is duly organized or formed, and that each of
the Borrowers is validly existing, in good standing and qualified to engage in
business in each jurisdiction where such Borrowers’ ownership, lease or
operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;


 


(iii)          a
favorable written opinion (addressed to the Administrative Agent and the
Initial Lenders and dated the Amendment Effective Date) of each of (A) the
in-house general counsel for the Borrowers, (B) Sidley Austin LLP, counsel
for the Borrowers, and (C) Maples and Calder, counsel for the Borrowers
that are Cayman Islands companies, with respect to matters of Cayman Islands
law, respectively, and in each case, covering such matters relating to the
Borrowers, this Amendment No. 1, the Credit Agreement, the other Loan
Documents or the transactions contemplated hereby or


 


16
















 


thereby
as the Administrative Agent shall reasonably request (and the Borrowers hereby
request such counsel to deliver such opinions);


 


(iv)          a
certificate signed by a Responsible Officer of each Borrower, in a form
satisfactory to the Administrative Agent, either (A) attaching copies of
all consents, licenses and approvals required in connection with the execution,
delivery and performance by such Borrower and the validity against such
Borrower of this Amendment No. 1 and of the Original Credit Agreement, as
amended by this Amendment No. 1, and such consents, licenses and approvals
shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;


 


(v)           a
certificate signed by a Responsible Officer of each Borrower, in a form
satisfactory to the Administrative Agent, certifying, together with evidence,
in form and substance reasonably satisfactory to the Administrative Agent, that
the Security Documents continue to be effective to create in favor of the
Administrative Agent a legal, valid and enforceable first Lien and security
interest in or on each item of Collateral (including, without limitation, all
Specified Financial Assets identified on Schedule I hereto) in existence and
owned or controlled by the Borrowers as of the date hereof and that all
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Administrative Agent to protect and preserve
such security interests shall have been duly effected;


 


(vi)          the
results of Uniform Commercial Code searches (and the equivalent thereof in all
applicable foreign jurisdictions) with respect to the Collateral, indicating no
Liens on the Collateral other than Liens permitted by Section 7.01(a) of
the Credit Agreement, and otherwise in form and substance reasonably
satisfactory to the Administrative Agent on behalf of the Initial Lenders; and


 


(vii)         such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent or the Required Lenders reasonably may require.


 


Section 6                                             Representations
and Warranties.  The KKR
Entities hereby represent and warrant that:


 


(a)           No Default or Event
of Default currently exists under the Original Credit Agreement.


 


(b)           All representations
and warranties contained in the Credit Agreement and the Security Agreement are
true and correct as of the date hereof and as if made on the date hereof
(except that, to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct as of
such earlier date, and except that, for purposes of this Section 6(b),
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 of the Credit Agreement shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b),
respectively, of Section 6.01 of the Credit Agreement).


 


(c)           Each Borrower (i) is
duly organized or formed, validly existing and, as applicable, in good standing
under the Laws of the jurisdiction of its incorporation or organization, (ii) has
all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (A) own or lease its assets and
carry on its business and (B) execute, deliver and perform its obligations
under this Amendment No. 1 and the Original 


 


17

















 


Credit Agreement,
as amended by this Amendment No. 1, and (iii) is duly qualified and
is licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (c)(ii)(A) or (c)(iii), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.


 


(d)           The execution,
delivery and performance by each Borrower of this Amendment No. 1 and the
Original Credit Agreement, as amended by this Amendment No. 1, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not: (i) contravene the terms of any of such Person’s
Organization Documents; (ii) conflict with or result in any breach or
contravention of, or require any payment to be made under (A) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; (iii) violate any Law;
except, in each case referred to in clause (d)(ii) or (d)(iii),
to the extent such conflict, breach, contravention, payment or violation would
not reasonably be expected to have a Material Adverse Effect; or (iv) result
in the creation or imposition of any Lien on any asset of any of the Borrowers
or any of their Subsidiaries other than the Liens created pursuant to the Loan
Documents.


 


(e)           No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, any Borrower of this Amendment No. 1 or the Original Credit
Agreement, as amended by this Amendment No. 1, except (i) for the
filing of Uniform Commercial Code financing statements and (ii) such
approvals, consents, exemptions, authorizations or other actions, notices or
filings as have been obtained or made and are in full force and effect or where
the failure to obtain or make such approvals, consents, exemptions,
authorizations or other actions, notices or filings would not have a Material
Adverse Effect.


 


(f)            This Amendment No. 1
has been duly executed and delivered by each Borrower.  This Amendment No. 1, and the Original
Credit Agreement, as amended by this Amendment No. 1, each constitutes a
legal, valid and binding obligation of each Borrower that is party thereto,
enforceable against each such Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.


 


(g)           Except as disclosed
in Schedule 5.06 of the Credit Agreement, no action, suit, investigation or
proceeding is pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any Borrower or any Subsidiary
thereof or any transaction contemplated by the Loan Documents, if such action,
suit, investigation or proceeding could have a Material Adverse Effect.(1)


 


(h)           Immediately prior to
and following the transactions contemplated herein, each of the Borrowers shall
be Solvent.


 






(1) KKR to confirm that no further disclosures are required
regarding litigation.


 


18

















 


Section 7               Counterparts. 
 This Amendment No. 1
may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the parties hereto may
execute this Amendment No. 1 by signing any such counterpart.


 


Section 8               Relation to the Credit Agreement.  Upon its becoming effective in accordance
with Section 2 hereof, this Amendment No. 1 shall constitute an
integral part of the Credit Agreement.


 


Section 9               Continued Effectiveness.  From and after the Effective Date, each
reference in the Original Credit Agreement to “this Agreement”, or any like
expression referring to the Original Credit Agreement, shall be deemed to refer
to the Original Credit Agreement as amended by this Amendment No. 1.   The Original Credit Agreement, other than as
amended hereby, shall remain unchanged and in full force and effect.   Each of the parties hereto, by its execution
and delivery of this Amendment No. 1, confirms that all of its obligations
under the Original Credit Agreement, as amended hereby, remain unchanged and in
full force and effect.  Each of the
parties hereto agrees to execute and deliver all such further agreements or
documents, if any, as shall be necessary to give effect to the provisions of
this Amendment No. 1.


 


Section 10             Waivers.  The Lenders and the Administrative Agent
hereby waive any Default or Event of Default that may have occurred solely by
reason of the failure of the Borrower to deliver a Control Agreement under Section 6.12(b)(iv) of,
and within the timeframes required under Section 6.12(c) of,
the Original Credit Agreement with respect to the Pledged Account referenced on
Schedule II to the Original Credit Agreement maintained at JPMorgan Chase Bank,
N.A. This Amendment No. 1 is limited solely to the matters expressly set
forth herein and is specific in time and in intent and, except as provided
herein, does not constitute, nor should it be construed as, a waiver or
amendment of any other term or condition, right, power or privilege under the
Original Credit Agreement or under any agreement, contract, indenture, document
or instrument mentioned therein; nor does it preclude or prejudice any rights
of the parties thereunder, or any exercise thereof or the exercise of any other
right, power or privilege, nor shall it (except as contemplated hereby) require
any of the parties hereto to agree to an amendment, waiver or consent for a
similar transaction or on a future occasion, nor shall any future waiver of any
right, power, privilege or default hereunder, or under any agreement, contract,
indenture, document or instrument mentioned in the Original Credit Agreement,
constitute a waiver of any other right, power, privilege or default of the same
or of any other term or provision.


 


Section 11             Survival of Representations and Warranties.  All representations and warranties made
hereunder or under any document delivered pursuant hereto or in connection
herewith shall survive the execution and delivery hereof.  Such representations and warranties have been
or will be relied upon by the Administrative Agent and each Lender, regardless
of any investigation made by the Administrative Agent or any Lender or on their
behalf, and shall continue in full force and effect as long as any Loan or any
other Obligation under the Credit Agreement shall remain unpaid or unsatisfied
or any Lender shall have a Commitment under the Credit Agreement.


 


Section 12             Further Miscellaneous Provisions.  Unless stated otherwise herein, (a) 
headings and captions shall not be construed in interpreting provisions of this
Amendment No. 1, and (b) if any part of this Amendment No. 1 is
for any reason found to be unenforceable, all other portions of it shall
nevertheless remain enforceable.  Section 10.14
of the Original Credit Agreement is incorporated herein by reference and made a
part hereof as if set forth herein in full, except that references to “this
Agreement” or to “this Agreement or any other Loan Document” set forth in such
sections as incorporated herein shall be deemed to mean “this Amendment No. 1.”


 


[SIGNATURE PAGES FOLLOW]


 


19

















 


IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Original Credit Agreement to be duly executed as of the date first above
written.


 


	
   

  	
  KKR FINANCIAL HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR FINANCIAL HOLDINGS II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR FINANCIAL HOLDINGS III, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR FINANCIAL HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR FINANCIAL HOLDINGS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR TRS HOLDINGS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  KKR FINANCIAL CLO 2009-1, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Name:  Jeffrey B. Van Horn

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  



 


1

















 


	
   

  	
  BANK OF AMERICA,
  N.A.,

  
	
   

  	
  as Administrative Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura Werner

  
	
   

  	
   

  	
  Name:

  	
  Laura Werner

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


2

















 


	
   

  	
  CITICORP
  NORTH AMERICA, INC.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Maureen R. Mauroney

  
	
   

  	
   

  	
  Name:

  	
  Maureen R. Mauroney

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


3

















 


Acknowledged and Agreed solely with respect to Section 4 of
Amendment No. 1:


 


 


THE BANK OF NEW YORK
MELLON, as Collateral Agent




 


	
  By:

  	
  /s/ Joseph Ciacciarelli

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Joseph Ciacciarelli

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  



 


4