Document:

Exhibit 4.1

 

	
  COMMON
  STOCK

  	
   

  	
  COMMON STOCK

  
	
   

  
	
  NUMBER

   

  KFN

  	
  

  	
    SHARES

  
	
   

  
	
   

  	
  INCORPORATED UNDER THE LAWS OF THE STATE OF
  MARYLAND

  	
   

  
	
   

  	
   

  	
   

  
	
  THIS CERTIFICATE IS TRANSFERABLE

  	
   

  	
  SEE REVERSE FOR CERTAIN DEFINITIONS 

  
	
  IN NEW YORK, NY

  	
   

  	
  CUSIP 482476 30 6

  
							

 

 

THIS CERTIFIES THAT

 

 

IS THE OWNER OF

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE
COMMON STOCK, $.01 PAR VALUE PER SHARE, OF

KKR FINANCIAL CORP.

(herein called the “Corporation”), transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. This certificate is not valid
until countersigned by the Transfer Agent and registered by the Registrar. 

WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

 

Dated:

 

 

	
   

  	
  [SEAL]

  	
   

  
	
   

  	
  KKR FINANCIAL CORP.

  	
   

  
	
   

  	
  CORPORATE

  	
   

  
	
   

  	
  /s/ Barbara J.S. Mckee

  	
   

  	
  SEAL

  	
   

  	
  /s/ Saturnino S. Fanlo

  	
   

  
	
   

  	
  GENERAL COUNSEL AND SECRETARY

  	
   

  	
  MARYLAND

  	
   

  	
  CHIEF EXECUTIVE OFFICER

  	
   

  
	
   

  	
  KFN

  	
   

  

 

	
  COUNTERSIGNED AND REGISTERED

  	
   

  
	
  AMERICAN STOCK TRANSFER & TRUST COMPANY

  	
   

  
	
  TRANSFER AGENT AND REGISTRAR

  	
   

  
	
  By

  	
   

  
	
   

  	
   

  
	
  AUTHOIRIZED SIGNATURE

  	
   

  
	
   

  	
   

  
	
  © SECURITY-COLUMBIAN BANKNOTE COMPANY

  

 

 

KKR FINANCIAL CORP.

 

The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

 

	
   

  	
  TEN COM

  	
  —

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT — 

  	
   

  	
   Custodian

  	
   

  
	
   

  	
  TEN ENT

  	
  —

  	
  as tenants by the entireties

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  
	
   

  	
  JT TEN

  	
  —

  	
  as joint tenants with right of

  	
   

  	
  under Uniform Gifts to Minors

  
	
   

  	
   

  	
  survivorship and not as tenants

  	
   

  	
  Act

  	
   

  
	
   

  	
   

  	
  in common

  	
   

  	
  (State)

  
									

 

Additional abbreviations may
also be used though not in the above list.

 

FOR VALUE
RECEIVED, ___________________________________ hereby sell, assign and
transfer unto

 

 

PLEASE INSERT SOCIAL SECURITY OR OTHER

  IDENTIFYING
NUMBER OF ASSIGNEE

 

 

____________________________________________________________________________________________________________

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)

 

____________________________________________________________________________________________________________

 

______________________________________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

 

____________________________________________________________________________________________________Attorney

to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.

 

 

	
  Dated

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:   

  	
  THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S)
  AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
  ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

  

 

 

 

 

Signature(s) Guaranteed

 

 

 

	
  By

  	
   

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
  INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
  UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
  PURSUANT TO S.E.C. RULE 17Ad-15.Exhibit 10.7

 

LICENSE AGREEMENT

 

This TRADEMARK LICENSE AGREEMENT (“Agreement”) is effective as of the
12th day of August, 2004 (“Effective Date”) by and between Kohlberg
Kravis Roberts & Co. L.P. (the “Licensor”) and KKR Financial Corp., a
corporation organized under the laws of the State of Maryland (the “Licensee”).

 

WHEREAS, Licensor is the owner of the service mark, corporate and trade
name “KKR” (the “Mark”);

 

WHEREAS, Licensee is a newly-organized real estate investment trust
(the “Licensee Business”);

 

WHEREAS, pursuant to that certain management agreement dated as of August 12,
2004 between Licensee and KKR Financial Advisors LLC (the “Management Agreement”),
Licensee has engaged KKR Financial Advisors LLC, an affiliate of Licensor, to
act as its manager (in such capacity, the “Manager”); and

 

 WHEREAS, Licensee desires to use
the Mark in connection with the operation of its business in the United States, and Licensor is willing to permit Licensee to use
the Mark, subject to the terms and conditions herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

Article 1.  Grant of Rights.  Subject to the terms and conditions herein,
Licensor hereby grants to Licensee a paid-up, non-exclusive license to use the
Mark in the United States in connection with the Licensee Business, solely (i) as
part of the corporate name KKR Financial Corp. as a whole (the “Corporate Name”);
and (ii) as a corporate name, trade name or domain name. Licensee may not
(x) use the Mark standing alone, (y) use any variation, derivative or
stylization of the Corporate Name, or (z) use the Mark in connection or
combination with any other name, term or logo (either of its own or a third
party) other than the Corporate Name. 
Licensor acknowledges that Licensee may make investments or have
shareholders outside the United States, and any implied
“use” of the Corporate Name due to this fact shall not violate this Agreement,
but is subject to Article 7.  All
rights not expressly granted to Licensee in this Article 1
are reserved to Licensor.

 

Article 2.  Ownership.  Licensee
agrees that, as between the parties, Licensor is the sole owner of the
Mark.  Licensee agrees not to directly or
indirectly challenge or contest the validity of, or Licensor’s rights in the
Mark (and the associated goodwill), including without limitation, arising out
of or relating to any third-party claim, allegation, action, demand, proceeding
or suit (“Action”) regarding enforcement of this Agreement or involving any
third party.  The parties intend that any
and all goodwill in the Mark arising from Licensee’s use of the

 

 

Corporate Name shall inure solely to the benefit of Licensor.  Notwithstanding the foregoing, in the event
that Licensee is deemed to own any rights in the Mark (or the Mark portion of
the Corporate Name), Licensee hereby assigns such
rights to Licensor.

 

Article 3.  Use of the Mark.

 

Section 3.1.  Licensee agrees to maintain and preserve the
quality of the Mark, and to use the Corporate Name in good faith and in a
dignified manner, in a manner consistent with Licensor’s high standards of and
reputation for quality, and in accordance with good trademark practice wherever
the Corporate Name is used.  Licensee
shall not take any action that could be detrimental to the Mark, the Corporate
Name or their associated goodwill.  If
Licensor decides in its sole discretion to register the Mark or Corporate Name,
Licensee agrees to affix all such trademark notices as may be requested by the
Licensor or required under applicable laws.

 

Section 3.2.  Upon request by Licensor, Licensee shall
furnish to Licensor representative samples of all advertising and promotional
materials in any media that are used in connection with the Corporate
Name.  Licensee shall make any changes to
such materials that Licensor requests to comply with Section 3.1, or
preserve the validity of, or Licensor’s rights in the Mark.

 

Section 3.3.   Licensee shall, at its sole expense, comply
at all times with all applicable laws, regulations, exchange and other rules and
reputable industry practice pertaining to the Licensee Business and the use of
the Corporate Name.

 

Article 4.  Termination.

 

Section 4.1.
The term of this Agreement (“Term”) commences on the Effective Date and
continues in perpetuity, unless termination occurs pursuant to the other
provisions of this Article 4.

 

Section 4.2.  If a party materially breaches one or more of
its obligations hereunder, the other party may terminate this Agreement,
effective upon written notice, if such party does not cure such breach within
30 days written notice thereof (or any mutually-agreed extension).  Licensor may terminate this Agreement
immediately, effective upon written notice, if Licensee violates Article 7.

 

Section 4.3.
This Agreement shall terminate immediately if an affiliate of Licensor is no
longer acting as Manager to Licensee under the Management Agreement or a
similar agreement.

 

Section 4.4.
Licensor has the right to terminate this Agreement immediately upon written
notice to Licensee if (i) Licensee makes an assignment for the benefit of
creditors; (ii) Licensee admits in writing its inability to pay debts as
they mature; (iii) a trustee or receiver is appointed for a substantial
part of Licensee’s assets and (iv) to the extent termination is
enforceable under local law, a proceeding in bankruptcy is instituted against
Licensee which is acquiesced in, is not dismissed within 120 days, or results
in an adjudication of bankruptcy.

 

2

 

Section 4.5.  If an event described in Section 5
occurs, Licensor shall have the right, in addition to its other rights and
remedies, to suspend Licensee’s rights regarding the Corporate Name while
Licensee attempts to remedy the situation.

 

Section 4.6.  Upon termination of this Agreement for any
reason, (i) Licensee shall immediately cease all use of the Corporate Name
(except for limited transitional use, subject to Licensor’s consent); (ii) the
parties shall cooperate so as to best preserve the value of the Corporate Name;
and (iii) Sections 6.3, 6.4, 6.5 and 6.6 shall survive any such event.

 

Article 5.  Infringement.  Licensee agrees to notify Licensor promptly
after it becomes aware of any actual or threatened infringement, imitation,
dilution, misappropriation or other unauthorized use or conduct in derogation (“Infringement”)
of the Mark.  Licensor shall have the
sole right to bring any Action to remedy the foregoing, and Licensee shall
cooperate with Licensor in same, at Licensor’s expense.

 

Article 6.  Representations and Warranties.

 

Section 6.1.  Each party represents and warrants to the
other party that:

 

(a)  This Agreement is a legal, valid
and binding obligation of the warranting party, enforceable against such party
in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to
the effect of general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity);

 

(b)  The warranting party is not subject
to any judgment, order, injunction, decree or award of any court,
administrative agency or governmental body that would or might interfere with
its performance of any of its material obligations hereunder; and

 

(c)  The warranting party has full power
and authority to enter into and perform its obligations under this Agreement in
accordance with its terms.

 

Section 6.2.  EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.3,
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THIS AGREEMENT, THE MARK OR THE CORPORATE NAME, AND EXPRESSLY
DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING ANY WITH RESPECT
TO TITLE, NON-INFRINGEMENT, MERCHANTABILITY, VALUE, RELIABILITY OR FITNESS FOR
USE.  LICENSEE’S USE OF THE CORPORATE
NAME IS ON AN “AS IS” BASIS AND IS AT ITS OWN RISK (I) OUTSIDE THE UNITED
STATES AND (II) EXCEPT AS EXPRESSLY SET FORTH HEREIN, WITHIN THE UNITED STATES.

 

Section 6.3.
Licensor will defend at its expense, indemnify and hold harmless Licensee and
its affiliates and their respective directors, officers, employees, agents and
representatives (“Related Parties”) from any loss, liability, damage, award,
settlement, judgment, fee, cost or expense (including reasonable attorneys’
fees and costs of suit) (“Losses”) arising out of or relating to (i) any
breach by Licensor of this Agreement or its warranties, representations,
covenants and undertakings hereunder; or (ii) any third-party Action
against any of them that

 

3

 

arises out of or
relates to any claim that Licensee’s use of the Corporate Name as expressly
authorized hereunder infringes the rights of a third party within the United
States.

 

Section 6.4.
Licensee will defend at its expense, indemnify and hold harmless Licensor and
its affiliates and their respective Related Parties from any Losses arising out
of or relating to any third-party Action against any of them that arises out of
or relates to (i) any breach by Licensee of this Agreement or its
warranties, representations, covenants and undertakings hereunder; (ii) Licensee’s
operation of its business; or (iii) any claim that Licensee’s use of the
Corporate Name, other than as explicitly authorized by this Agreement,
infringes the rights of a third party anywhere in the world.

 

Section 6.5.
The indemnified party will promptly notify the indemnifying party in writing of
any indemnifiable claim and promptly tender its defense to the indemnifying
party.  Any delay in such notice will not
relieve the indemnifying party from its obligations to the extent it is not
prejudiced thereby.  The indemnified
party will cooperate with the indemnifying party at the indemnifying party’s
expense.  The indemnifying party may not
settle any indemnified claim in a manner that adversely affects the indemnified
party without its consent (which shall not be unreasonably withheld or
delayed).  The indemnified party may
participate in its defense with counsel of its own choice at its own expense.

 

Section 6.6.
EXCEPT WITH RESPECT TO A PARTY’S INDEMNIFICATION OBLIGATIONS HEREUNDER, NEITHER
PARTY WILL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, CONSEQUENTIAL,
EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES (INCLUDING LOST PROFITS OR GOODWILL,
BUSINESS INTERRUPTION AND THE LIKE) RELATING TO THIS AGREEMENT, EVEN IF IT HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

Article 7.  Assignments.  Licensee may not assign, sublicense, pledge,
mortgage or otherwise encumber this Agreement or its right to use the Corporate
Name, in whole or in part, without the prior written consent of Licensor in its
sole discretion.  For the avoidance of
doubt, a merger, change of control, reorganization or stock sale of Licensee
shall be deemed an “assignment” requiring such consent, regardless of whether
Licensee is the surviving entity. 
Licensee acknowledges that its identity is a material condition that
induced Licensor to enter into this Agreement. 
Any attempted action in violation of the foregoing shall be null and
void ab initio and of no force or effect, and shall result in immediate
termination of this Agreement.

 

Article 8.  Miscellaneous.

 

Section 8.1.
All notices hereunder shall be in writing and hand delivered or mailed by
registered or certified mail (return receipt requested) or nationally recognized
overnight courier service or facsimile with delivery confirmed to the following
addresses (or at such other addresses as shall be specified by like notice) and
will be deemed given on the date received:

 

LICENSOR:

 

Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street

New York, NY 10019

 

4

 

Attention: William J. Janetschek

Facsimile:  (212) 750-0003

 

LICENSEE:

 

KKR Financial Corp.

9 West 57th Street

New York, NY 10019

 

Attention: Saturnino S. Fanlo

Facsimile:  (212) 750-0003

 

Section 8.2.  Further Assurances.  Licensor and Licensee agree to execute such
further documentation and perform such further actions, including the
recordation of such documentation with appropriate authorities, as may be
reasonably requested by the other party hereto to evidence and effectuate
further the purposes and intents set forth in this Agreement.

 

Section 8.3.  Entire Agreement/Construction.  This Agreement, including the

 

Schedules, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.

 

Section 8.4.  Amendments.  This Agreement, including this provision of
this Agreement, may not be modified or amended except by an agreement in
writing signed by each of the parties hereto.

 

Section 8.5.  Cumulative Rights; Waiver.  All rights and remedies which Licensor or
Licensee may have hereunder or by operation of law are cumulative, and the
pursuit of one right or remedy shall not be deemed an election to waive or
renounce any other right or remedy.  The
failure of either Licensor or Licensee to require strict performance by the
other party of any provision in this Agreement will not waive or diminish that
party’s right to demand strict performance thereafter of that or any other
provision hereof.

 

Section 8.6.  Severability.  The parties agree that each provision of this
Agreement shall be construed as separable and divisible from every other
provision.  The unenforceability of any
one provision shall not limit the enforceability, in whole or in part, of any
other provision hereof.  If any term or
provision of this Agreement (or the application thereof to any party or set of
circumstances) shall be held invalid or unenforceable in any jurisdiction and
to any extent, it shall be ineffective only to the extent of such invalidity or
unenforceability and shall not invalidate or render unenforceable any other
terms or provisions of this Agreement (or such applicability thereof).  In such event, the parties shall negotiate in
good faith a valid, enforceable, applicable substitute provision that attempts
as closely as possible to achieve the intended purpose of the previous term or
provision and has an effect as comparable as possible on the parties’
respective positions.

 

5

 

Section 8.7.  Governing Law/Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely in the State of New York.  The parties agree, for the purposes of any
action arising out of or related to this Agreement, to commence any such action
solely in the state or federal courts located in the State of New York, Borough
of Manhattan.

 

Section 8.8.
Construction.  Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.  This Agreement shall be construed as if
drafted jointly by the parties.

 

Section 8.9.  Separate
Counterparts.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
the other parties.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.

 

[Remainder of Page Intentionally
Left Blank]

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the date first above written.

 

 

	
   

  	
  KOHLBERG KRAVIS ROBERTS & CO. L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KKR & Co. L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ PERRY GOLKIN

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Perry Golkin

  
	
   

  	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KKR FINANCIAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ DAVID A. NETJES

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David A. Netjes

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  
					

 

7

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