Exhibit 10.2


 


AMENDMENT NO. 2 TO


AGREEMENT AND PLAN OF MERGER


 


THIS AMENDMENT NO. 2 (this “Amendment”) dated
as of October 26, 2009, to that certain AGREEMENT AND PLAN OF MERGER dated
as of September 8, 2009 (the “Original Agreement”), as amended by
Amendment No. 1 dated as of October 22, 2009, in each case by and
among PROSPECT ACQUISTION CORP., a company incorporated under the laws of
Delaware (“Prospect”), KW MERGER SUB CORP., a company incorporated under
the laws of Delaware and a wholly owned subsidiary of Prospect (“Merger Sub”)
and KENNEDY-WILSON, INC., a company incorporated under the laws of Delaware (“KW”).


 


RECITALS


 


WHEREAS, the Parties are parties to the Original
Agreement, as amended; and


 


WHEREAS, the Parties wish to amend the Original
Agreement, as amended, pursuant to and in accordance with Section 11.2
thereof as further set forth herein.


 


NOW, THEREFORE, in consideration of the mutual
promises contained herein and in the Original Agreement, pursuant to and in
accordance with Section 11.2 of the Original Agreement, the Parties agree
to amend the Original Agreement, as amended, as follows:


 


1.             Definitions. 
All capitalized terms used herein without definition shall have the
meanings assigned to such terms in the Original Agreement.


 


2.             Amendment
to Definition of Prospect Warrant Agreement Amendment.  The definition of Prospect Warrant Agreement
Amendment in Annex A of the Original Agreement shall be deleted in its
entirety and replaced with the following:


 


“Prospect Warrant Agreement Amendment” means
an amendment to the Prospect Warrant Agreement substantially in the form
attached as Exhibit E that provides
that, simultaneously with the Closing: (i) each Sponsor Warrant (as
defined in the Prospect Warrant Agreement) will be converted into the Amended
Sponsor Warrant; and (ii) each Public Warrant (as defined in the Prospect
Warrant Agreement) will be converted into either (x) the Cash
Consideration or (y) the Amended Public Warrant, in each case as the
holder of Public Warrants shall have elected or be deemed to have elected;
provided that no more than 50% of the outstanding Public Warrants shall be
converted into the right to receive the Amended Public Warrant (the “Warrant
Limit”); and provided further that in the event that holders of in excess of
the Warrant Limit shall have elected to receive the Amended Public Warrant, the
holders of the Public Warrants who elect to receive the Amended


 

















 


Public Warrant and the holders of the Sponsor Warrants will receive the
Cash Consideration for a portion of their Warrants, as further set forth in and
in accordance with Exhibit E hereto.


 


3.             Full
Force and Effect.  Except as
expressly amended hereby, the Original Agreement shall continue in full force
and effect in accordance with the provisions thereof.


 


4.             Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of New York
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.


 


5.             Counterparts;
Facsimile Execution.  This Amendment
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
counterparts have been signed by each of the Parties and delivered to the other
Parties.  Facsimile or electronic
execution and delivery of this Amendment is legal, valid and binding for all
purposes.


 


6.             Headings. 
All section titles and captions contained in this Amendment are for
convenience only and shall not be deemed a part of this Amendment.


 


7.             Severability.  If any term or other provision of this
Amendment is invalid, illegal or incapable of being enforced by any rule or
Law, or public policy, all other conditions and provisions of this Amendment
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any Party. 
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Amendment so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated by this Amendment are fulfilled to the extent
possible.


 

















 


IN WITNESS WHEREOF, the Parties
hereto have caused this Amendment to be duly executed by their respective
authorized signatories as of the date first indicated above.


 


 


	
   

  	
  PROSPECT
  ACQUISITION CORP.

  
	
   

  	
  By:

  	
  /s/ David A.
  Minella

  
	
   

  	
  Name: David A.
  Minella

  
	
   

  	
  Title:
  Chairman & CEO

  
	
   

  	
  Address: 9130
  Galleria Court, Suite 318

  
	
   

  	
  Naples, FL 34109

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Bingham
  McCutchen LLP

  
	
   

  	
  399 Park Avenue

  
	
   

  	
  New York, NY
  10022

  
	
   

  	
  Attention: Floyd
  I. Wittlin, Esq.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KW MERGER
  SUB CORP.

  
	
   

  	
  By:

  	
  /s/ David A.
  Minella

  
	
   

  	
  Name: David A.
  Minella

  
	
   

  	
  Title: President
  and Secretary

  
	
   

  	
  Address: c/o
  Prospect Acquisition Corp.

  
	
   

  	
  9130 Galleria
  Court, Suite 318

  
	
   

  	
  Naples, FL 34109

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KENNEDY-WILSON,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J.
  McMorrow

  
	
   

  	
  Name: William J.
  McMorrow

  
	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
  Address: 9601
  Wilshire Blvd.

  
	
   

  	
  Beverly Hills, CA 90210