FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

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Exhibit 10.14

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") dated as of August 8, 2007, by and among (i) KKR FINANCIAL HOLDINGS LLC, a Delaware limited liability company ("KKR Financial"), KKR FINANCIAL CORP., a Maryland corporation ("KKR Financial Corp.") KKR TRS HOLDINGS, INC., a Delaware corporation ("KKR TRS"), 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"), and KKR FINANCIAL HOLDINGS, LTD., a Cayman Islands company ("KKR Holdings LTD," and collectively with KKR Financial, KKR Financial Corp., KKR TRS, KKR TRS LTD, KKR Holdings II, KKR Holdings III and KKR Holdings, the "Borrowers" and each, individually, a "Borrower"), (ii) each lender party hereto (collectively, the "Lenders" and individually, a "Lender"), and (iii) BANK OF AMERICA, N.A., as Administrative Agent and Swingline Lender.

WHEREAS, the Borrowers, the Lenders and the Administrative Agent have entered into that certain Second Amended and Restated Credit Agreement, dated as of May 4, 2007 (the "Credit Agreement;" capitalized terms used herein and not defined to have the meanings ascribed to such terms in the Credit Agreement); and

WHEREAS, the Borrowers, the Lenders and the Administrative Agent desire to amend certain provisions of the Credit Agreement on the terms and conditions contained herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1. Amendment to Credit Agreement. The parties hereto agree that, effective as of the date hereof, Section 7.05(b) of the Credit Agreement shall be amended to read as follows:

"(b) Dispositions of residential real estate assets of the Borrowers (including, without limitation, the Disposition of mortgage-backed securities), so long as no Default or Event of Default has occurred and is continuing or would be caused thereby; provided, however that, to the extent any such residential real estate assets constitute Collateral, Borrowers shall comply with the Security Documents with respect to any Dispositions thereof;".

Section 2. Conditions Precedent. The effectiveness of this Amendment is subject to receipt by the Administrative Agent of an original counterpart of this Amendment duly executed by each of the Borrowers, Required Lenders and the Administrative Agent.

Section 3. Effect of Amendment.

(a) Except as specifically modified by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed by the parties hereto and remain in full force and effect.

(b) Each of the Borrowers, the Administrative Agent and each Lender agrees that this Amendment shall constitute a Loan Document and, upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof", "therein" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment.

Section 4. Expenses. The Borrower shall reimburse the Administrative Agent upon demand for all reasonable out-of-pocket costs and expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and any other agreements and documents executed and delivered in connection herewith.

Section 5. Successors and Assigns. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

Section 7. Effect. Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. The amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.

Section 8. Counterparts; Integration. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Second Amended and Restated Credit Agreement to be executed as of the date first above written.

		KKR FINANCIAL HOLDINGS LLC
		By:		/s/ Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx Title: Authorized Signatory
		KKR FINANCIAL HOLDINGS II, LLC
		By:		/s/ Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx Title: Authorized Signatory
		KKR FINANCIAL HOLDINGS III, LLC
		By:		/s/ Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx Title: Authorized Signatory
		KKR FINANCIAL HOLDINGS, INC.
		By:		/s/ Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx Title: Authorized Signatory
		KKR FINANCIAL HOLDINGS, LTD.
		By:		/s/ Xxxxxxxx X. Xxxxx Name: Xxxxxxxx X. Xxxxx Title: Authorized Signatory
		KKR FINANCIAL CORP.
		By:		/s/ Xxxxxxxx X. Xxxxx Name: Xxxxxxxx X. Xxxxx Title: Authorized Signatory
		KKR TRS HOLDINGS, INC.
		By:		/s/ Xxxxxxxx X. Xxxxx Name: Xxxxxxxx X. Xxxxx Title: Authorized Signatory
		KKR TRS HOLDINGS, LTD.
		By:		/s/ Xxxxxxxx X. Xxxxx Name: Xxxxxxxx X. Xxxxx Title: Authorized Signatory

		BANK OF AMERICA, N.A., as Administrative Agent
		By:		/s/ Alexa X. Xxxxxxxx Name: Alexa X. Xxxxxxxx Title: Senior Vice President

		BANK OF AMERICA, N.A., as a Lender, and Swingline Lender
		By:		/s/ Alexa X. Xxxxxxxx Name: Alexa X. Xxxxxxxx Title: Senior Vice President

		CITIGROUP GLOBAL MARKETS INC., as a Syndication Agent
		By:		/s/ Xxxxxxxxx X. Xxxx Name: Xxxxxxxxx X. Xxxx Title: Managing Director/Senior Credit Officer

		CITICORP NORTH AMERICA, INC., as a Lender
		By:		/s/ Xxxxxxxxx X. Xxxx Name: Xxxxxxxxx X. Xxxx Title: Managing Director/Senior Credit Officer

		BANK OF NOVA SCOTIA, as a Lender
		By:		/s/ Xxxx Morale Name: Xxxx Morale Title: Managing Director

		CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender
		By:		/s/ Xxxxxx Xxxxxxxx Name: Xxxxxx Xxxxxxxx Title: Director
		By:		/s/ Xxxxx Xxxxx Name: Xxxxx Xxxxx Title: Associate

		XXXXXXX XXXXX & CO. INC., as a Lender
		By:		/s/ Xxxxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxxxxxx Title: Managing Director

		ROYAL BANK OF CANADA, as a Lender
		By:		/s/ Xxxxxx Xxx Name: Xxxxxx Xxx Title: Authorized Signatory

		COMMERZBANK AKTIENGESELLSCHAFT, as a Lender
		By:		/s/ Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx Title: Senior Vice President
		By:		/s/ Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx Title: Vice President

		FORTIS CAPITAL CORP., as a Lender
		By:		/s/ Xxxxx Xxxxx Name: Xxxxx Xxxxx Title: Senior Vice President
		By:		/s/ Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxxxx Title: Director