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Exhibit 10.9    
    


        ESCROW AGREEMENT, dated as
of                        , 2007 ("Agreement"),
by and among PROSPECT ACQUISITION CORP., a Delaware corporation ("Company"), FLAT RIDGE INVESTMENTS LLC, LLM STRUCTURED EQUITY FUND L.P., LLM INVESTORS
L.P., CAPITAL MANAGEMENT SYSTEMS, INC., MICHAEL P. CASTINE, SJC CAPITAL, LLC, MICHAEL DOWNEY, JAMES CAHILL AND DANIEL GRESSEL (collectively "Initial
Stockholders") and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation ("Escrow Agent"). 


        WHEREAS, the Company has entered into an Underwriting Agreement, dated                        ,
2007 ("Underwriting
Agreement"), with Citigroup Global Markets Inc. ("Citigroup") acting as representative of the several underwriters
(collectively, the "Underwriters"), pursuant to which, the Underwriters have agreed to purchase 25,000,000 units
("Units") of the Company. Each Unit consists of one share of the Company's common stock, par value $0.0001 per share ("Common
Stock"), and one warrant to purchase one share of Common Stock, all as more fully described in the Company's final Prospectus,
dated                        , 2007
("Prospectus") comprising part of the Company's Registration Statement on Form S-1 (File No. 333-145110) under the
Securities Act of 1933, as amended ("Registration Statement"), declared effective
on                        , 2007 ("Effective
Date"). 


        WHEREAS, the Underwriters have required as a condition to purchase of the Units that the Initial Stockholders deposit the number of shares
of Common Stock of the Company (the "Escrow Shares") and the number of Sponsors' Warrants (as defined in the Warrant Agreement
dated                        ,
2007 between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent (the "Warrant Agreement"), in each case, as set forth
opposite their respective names in Exhibit A attached hereto (the Escrow Shares and Sponsors' Warrants are collectively referred to herein as the "Escrow
Securities") in escrow as hereinafter provided. 


        WHEREAS, the Company and the Initial Stockholders desire that the Escrow Agent accept the Escrow Securities, in escrow, to be held and
disbursed as hereinafter provided. 


        IT
IS AGREED: 


        1.    Appointment of Escrow Agent.    The Company and the Initial Stockholders hereby appoint the Escrow Agent to act
in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms. 



        2.    Deposit of Escrow Shares.    On or before the Effective Date, each of the Initial Stockholders shall have
delivered or caused to be delivered to the Escrow Agent certificates representing his, her or its respective Escrow Securities, to be held and disbursed subject to the terms and conditions of this
Agreement. Each Initial Stockholder acknowledges that the certificates representing his, her or its Escrow Securities is legended to reflect the deposit of such Escrow Securities under this Agreement. 


        3.    Disbursement of the Escrow Securities.    The Escrow Agent shall hold the Escrow Shares until the date that is
one year after the date of completion of an Initial Business Combination (as defined in the Warrant Agreement) and the Sponsors' Warrants until the date that is 30 days after the date of
completion of an Initial Business Combination (in each case, the "Escrow Period"), on which respective dates it shall, upon written instructions from
the Company's General Counsel or Chief Executive Officer, disburse the Escrow Shares (and any applicable stock power) or Sponsors' Warrants, as the case may be, to the Initial Stockholders;  provided,
however, that at the end of the 30-day period in which the Underwriters may
exercise their over-allotment to purchase an additional 3,750,000 Units of the Company (as described in the Registration Statement), the Company shall give the Escrow Agent notice with
respect to the amount, if any, of the over-allotment that was exercised by the Underwriters and, upon such notice, the Initial Stockholders agree that the Escrow Agent shall return to the
Company for cancellation, at no cost, the number of Escrow Shares held by each Initial Stockholder determined by multiplying (a) the product of (i) 937,500, multiplied by (ii) a
fraction, (x) the numerator of which is the number Escrow Shares held by each Initial Stockholder, and (y) the denominator of which is the total number of Escrow Shares, by (b) a
fraction, (i) the numerator of which is 3,750,000 







 



minus
the number of shares of Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 3,750,000;  provided further, however, that if the Escrow Agent is notified by the Company pursuant to
Section 6.7 hereof that the Company is being liquidated then the Escrow Agent shall promptly destroy the certificates representing the Escrow Securities held pursuant to this Agreement;  provided further, however, that if, after the Company consummates an Initial Business Combination,
(i) it (or the surviving entity) subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders of such entity having the
right to exchange their shares of Common Stock for cash, securities or other property or (ii) the Closing Price of the Common Stock (as defined in the Warrant Agreement) equals or exceeds
$14.50 per share for any 20 trading days within any 30-trading day period, then the Escrow Agent will, upon receipt of a certificate, executed by the Chairman of the Board, Chief Executive
Officer, President or other authorized officer of the Company, in form reasonably acceptable to the Escrow Agent, that such transaction is then being consummated or such conditions have been achieved,
as applicable, release the Escrow Shares to the Initial Stockholders. The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Securities in
accordance with this Section 3. 


        4.    Rights of Initial Stockholders in Escrow Securities.    


        4.1.    Voting Rights as a Stockholder.    Subject to the terms of the Insider Letter described in Section 4.3
hereof and except as herein provided, the Initial Stockholders shall retain all of their rights as stockholders of the Company during the Escrow Period, including, without limitation, the right to
vote the Escrow Shares. 


        4.2.    Dividends and Other Distributions in Respect of the Escrow Shares.    During the Escrow Period, all dividends
payable in cash with respect to the Escrow Shares shall be paid to the Initial Stockholders, but all dividends payable in stock or other non-cash property
("Non-Cash Dividends") shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term
"Escrow Shares" shall be deemed to include the Non-Cash Dividends distributed thereon, if any. 


        4.3.    Restrictions on Transfer.    During the Escrow Period, no sale, transfer or other disposition may be made of
any or all of the Escrow Securities except to Permitted Transferees (as defined in the Warrant Agreement); provided,  however, that such permitted transfers
may be implemented only upon the respective Permitted Transferee's written agreement to be bound by the terms and
conditions of this Agreement and, as applicable, the Insider Letter signed by the Initial Stockholders transferring the Escrow Shares and/or Warrant Agreement. Even if transferred in accordance with
this Section 4.3, the Escrow Securities will remain subject to this Agreement and may only be released from escrow in accordance with Section 3 hereof. As used herein, the term
"Insider Letter" refers to that letter entered into by each of the Initial Stockholders, with Citigroup and the Company, dated as indicated on
Exhibit A hereto, and which is filed as an exhibit to the Registration Statement, respecting the rights and obligations of such Initial Stockholder in certain events, including but not limited
to the liquidation of the Company and certain voting and transfer restrictions which will apply during the Escrow Period. 


        4.4.    Sponsors' Warrants.    The Initial Stockholders who hold Sponsors' Warrants acknowledge that the Sponsors'
Warrants are subject to restrictions on exercise and transfer during the Escrow Period as specified in the Warrant Agreement. 


        5.    Concerning the Escrow Agent.    


        5.1.    Good Faith Reliance.    The Escrow Agent shall not be liable for any action taken or omitted by it in good
faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the
truth 


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and
acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or
parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto. 


        5.2.    Indemnification.    The Escrow Agent shall be indemnified and held harmless by the Company from and against
any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or
indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Securities held by it hereunder, other than expenses or losses arising from the gross
negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow
Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an
appropriate court to determine ownership or disposition of the Escrow Securities or it may deposit the Escrow Securities with the clerk of any appropriate court or it may retain the Escrow Securities
pending receipt of a final, non appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Securities are to be disbursed
and delivered. The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below. 



        5.3.    Compensation.    The Escrow Agent shall be entitled to reasonable compensation from the Company for all
services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors' and agents' fees and disbursements and all taxes or other governmental charges. 


        5.4.    Further Assurances.    From time to time on and after the date hereof, the Company and the Initial
Stockholders shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder. 


        5.5.    Resignation.    The Escrow Agent may resign at any time and be discharged from its duties as escrow agent
hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time that the
Escrow Agent shall turn over to a successor escrow agent appointed by the Company, the Escrow Securities held hereunder. If no new escrow agent is so appointed within the 60 day period
following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Securities with any court it reasonably deems appropriate. 


        5.6.    Discharge of Escrow Agent.    The Escrow Agent shall resign and be discharged from its duties as escrow agent
hereunder if so requested in writing at any time by the other parties hereto, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment by a
successor escrow agent as provided in Section 5.5. 



        5.7.    Liability.    Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from
liability hereunder for its own gross negligence or its own willful misconduct. 


        5.8.    Trust Account Waiver.    The Escrow Agent hereby waives all right, title, interest, or claim of any kind
("Claim") in or to any monies in the trust account of the Company (the "Trust Account") created pursuant
to the Investment Management Trust Agreement, dated as of [    •    ], 2007, by and 


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between
the Company and Continental Stock Transfer & Trust Company, as Trustee, that it may have now or in the future, and hereby agrees not to seek recourse, reimbursement, payment or
satisfaction for any Claim against the Trust Account for any reason whatsoever. 


        6.    Miscellaneous.    



        6.1.    Governing Law.    This Agreement shall for all purposes be deemed to be made under and shall be construed in
accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction (whether of
the State of New York or any other jurisdiction that would cause the application of the laws of any jurisdiction other than the State of New York). The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction or that such
courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section 6.6 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. 


        6.2.    Third Party Beneficiaries.    Each of the Initial Stockholders hereby acknowledges that the Underwriters are
third party beneficiaries of this Agreement and this Agreement may not be modified or changed without the prior written consent of Citigroup. 


        6.3.    Entire Agreement.    This Agreement contains the entire agreement of the parties hereto with respect to the
subject matter hereof and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by each party hereto. It may be executed in several original or
facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument. 



        6.4.    Headings.    The headings contained in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation thereof. 


        6.5.    Binding Effect.    This Agreement shall be binding upon and inure to the benefit of the respective parties
hereto and their legal representatives, successors and assigns. 


        6.6.    Notices.    Any notice or other communication required or which may be given hereunder shall be in writing and
either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given when so
delivered personally or, if mailed, two days after the date of mailing, as follows: 



If
to the Company, to: 


Prospect
Acquisition Corp.

695 East Main Street

Stamford, Connecticut 06901

Attn: David A. Minella

Fax No.: (203) 656-0051 


If
to an Initial Stockholder, to his, her or its address set forth in Exhibit A. 



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and
if to the Escrow Agent, to: 


Continental
Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman

Fax No.: (212) 509-5150 


A
copy of any notice sent hereunder shall be sent to: 


Bingham
McCutchen LLP

399 Park Avenue

New York, New York 10022

Attn: Floyd I. Wittlin, Esq.

Fax No.: (212) 752-5378 


and: 


Citigroup
Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attn: General Counsel

Fax No.: (212) 816-7912 


and:



Akin
Gump Strauss Hauer & Feld LLP

590 Madison Avenue

New York, New York 10022

Attn: Bruce Mendelsohn, Esq.

Fax No.: (212) 872-1002 




        The
parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for
giving notice. 


        6.7.    Liquidation of the Company.    The Company shall give the Escrow Agent written notification of the liquidation
and dissolution of the Company in the event that the Company fails to consummate an Initial Business Combination within the time period(s) specified in the Prospectus. 


[SIGNATURE PAGES FOLLOW]


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        WITNESS the execution of this Agreement as of the date first above written. 



	 	 	COMPANY:
	 	 	PROSPECT ACQUISITION CORP.
	

 	
 	

By:	
 	

          

	 	 	Name:	 	David A. Minella
	 	 	Title:	 	Chief Executive Officer
	

 	
 	
INITIAL STOCKHOLDERS:
	

 	
 	

FLAT RIDGE INVESTMENTS LLC
	

 	
 	

By:	
 	

          

	 	 	Name:	 	David A. Minella
	 	 	Title:	 	Managing Member
	

 	
 	

LLM STRUCTURED EQUITY FUND L.P.
	

 	
 	

By:	
 	

          

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	

LLM INVESTORS L.P.
	

 	
 	

By:	
 	

 
	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	

CAPITAL MANAGEMENT SYSTEMS, INC.
	

 	
 	

By:	
 	

          

	 	 	Name:	 	 
	 	 	Title:	 	 
	

 	
 	

 Michael P. Castine
	

 	
 	

SJC CAPITAL, LLC
	

 	
 	

By:	
 	

          

	 	 	Name:	 	William Crengros
	 	 	Title:	 	 
	

 	
 	

 Michael Downey
	

 	
 	

 James Cahill
	

 	
 	

 Daniel Gressel
	 	 	 	 	 




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ESCROW AGENT:
	

 	
 	

CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	

 	
 	

By:	
 	

          

	 	 	Name:	 	          

	 	 	Title:	 	          





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	Name and Address

of Initial Stockholder
 
	 	Number of

Escrow

Shares
	 	Stock

Certificate

Number
	 	Date of

Insider

Letter
	 	Number of

Sponsors'

Warrants
	 	Warrant

Certificate

Number

	Flat Ridge Investments LLC

814 Hollow Tree Ridge Road

Darien, CT 06820

Attn: David A. Minella	 	3,863,281	 	11,17,26,27,33,36	 	 	 	3,150,000	 	 
	

LLM Structured Equity Fund L.P.

265 Franklin Street, 20th Floor

Boston, Massachusetts 02110

Attn:	
 	

1,742,155	
 	

19,28	
 	

 	
 	

1,646,400	
 	

 
	

LLM Investors L.P.

265 Franklin Street, 20th Floor

Boston, Massachusetts 02110

Attn:	
 	

35,553	
 	

24,38	
 	

 	
 	

33,600	
 	

 
	

Capital Management Systems, Inc.

308 E. Lancaster Avenue

Suite 300

Wynnewood, PA 19096	
 	

444,427	
 	

25,37	
 	

 	
 	

420,000	
 	

 
	

Michael Castine

14 Larkspur Lane

Greenwich, CT 06831	
 	

158,724	
 	

20,29	
 	

 	
 	

0	
 	

 
	

SJC Capital, LLC

31975 Peppertree Bend

San Juan Capistrano, CA 92675	
 	

158,724	
 	

22,31	
 	

 	
 	

0	
 	

 
	

Michael Downey

2 Parsons Lane

Rochester, NY 14610	
 	

158,724	
 	

23,32	
 	

 	
 	

0	
 	

 
	

James Cahill

3 Kimberly Drive

Redding, CT 06896	
 	

467,188	
 	

16,18,34,35	
 	

 	
 	

0	
 	

 
	

Daniel Gressel

55 Cedar Cliff Road

Greenwich, CT 06878	
 	

158,724	
 	

21,30	
 	

 	
 	

0	
 	

 




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Exhibit 10.9