Document:

Exhibit 4(c).4

 

Indemnity Deed Poll

 

 

Dated:       10
September 2009

 

 

WESTPAC
BANKING CORPORATION ABN 33 007 457 141 of 275 Kent Street, Sydney NSW 2000 (“Westpac”)

 

 

INDEMNITY DEED POLL

 

DATED:

 

DEED POLL
BY:     WESTPAC BANKING CORPORATION  ABN 33 007 457
141 of 275 Kent Street, Sydney NSW 2000  (“Westpac”)

 

IN FAVOUR
OF:     Each:

 

(a)  person who is
(or has been) a director of Westpac (each a “Westpac
Director”)

 

(b)  person who is
(or has been) a statutory officer of Westpac (including each secretary,
responsible officer and responsible manager of Westpac), excluding each Westpac
Director, (each a “Westpac Beneficiary”);

 

(c)  person who is
(or has been) a director or other statutory officer (including each secretary,
responsible officer and responsible manager) of a Subsidiary Company (each a “Subsidiary  Beneficiary”);
and

 

(d)  Nominated
Beneficiary.

 

RECITALS

 

A.            Westpac wishes to indemnify the directors and other statutory
officers of the companies in the Westpac group in certain circumstances.  Westpac has entered into separate Deeds of
Indemnity and Access with Westpac Director. 
Under this Deed, Westpac provides an indemnity in favour of Westpac
Beneficiaries, Subsidiary Beneficiaries and Nominated Beneficiaries.

 

B.            Westpac wishes to, under this deed, agree to provide
Directors’ and Officers’ Insurance to the Westpac Directors and Subsidiary
Directors.

 

C.            The entry by Westpac into this deed will assist
Westpac, the Subsidiary Companies and Nominated Companies to recruit and retain
directors and officers of an appropriate standard.

 

D.            Westpac considers it reasonable in the circumstances
and in the best interests of Westpac to so indemnify the Westpac Beneficiaries,
Subsidiary Beneficiaries and Nominated Beneficiaries and to agree to provide
Directors’ and Officers’ Insurance to Westpac Directors and Subsidiary Directors
and to provide, as and when necessary, the other benefits under this deed when
the necessary conditions set out in this deed are satisfied.

 

E.             This deed is intended to give effect to the terms of
clause 19 (Indemnity and Insurance) of the Constitution.

 

2

 

OPERATIVE
PROVISIONS

 

1.             DEFINITIONS AND INTERPRETATION

 

1.1          Definitions

 

In this deed, unless a
contrary intention appears:

 

“Act” means any actual or alleged act, error,
statement, misstatement, misleading statement, omission, neglect or breach of
duty made, committed or attempted by an Indemnified Beneficiary (either alone
or jointly with one or more other persons) relating to, involving, arising out
of or in any way connected to the conduct of the Indemnified Beneficiary as a
director or other statutory officer of a Company.

 

“Appointment
Period” means the period during which the Westpac Director or the Subsidiary
Director (as relevant) holds office as a director of Westpac or a Subsidiary Company.

 

“Business
Day” means any
day other than Saturday, Sunday or public holiday on which Australian banks are
open for business in Sydney, New South Wales.

 

“Business
Hours” means the
hours between 9.00am and 5.00pm, on a Business Day.

 

“Claim” means any legal proceedings (whether
civil or criminal), any administrative proceedings, any arbitral proceedings,
any mediation or other form of alternative dispute resolution (whether or not
held in conjunction with any legal, administrative or arbitral proceedings) or
any investigation or inquiry by any Regulatory Authority or External
Administrator relating to, involving, arising out of or in any way connected
with any Act, or any written or oral threat, complaint or demand that might
reasonably result in the Indemnified Beneficiary apprehending that any such
proceedings, investigation or inquiry might be initiated.

 

“Company”
means Westpac, a
Subsidiary Company or a Nominated Company.

 

“Constitution”
means the
constitution of Westpac in force from time to time.

 

“D&O Policy” means an insurance
policy provided by and maintained with a reputable insurance company for the benefit of (amongst
others) each Westpac Director and each Subsidiary Director  which
insures the director against liability for acts or omissions of the director in
their capacity (or, following the Appointment Period, former capacity) as a
director of Westpac or a Subsidiary Company (as relevant).

 

“External
Administrator”
means a liquidator, provisional liquidator or controller or an administrator.

 

“Indemnified
Beneficiary”
means each Westpac Beneficiary, each Subsidiary Beneficiary and each Nominated
Beneficiary.

 

“Insurance
Period” means the
period commencing on the earlier of:

 

i)              the date the Westpac Director or the Subsidiary
Director became a director of Westpac or a Subsidiary Company (as relevant);
and

 

ii)             in the case of a Subsidiary Director, the date that Subsidiary
Company became a wholly owned Subsidiary of Westpac,

 

3

 

and ending on the earlier
of:

 

iii)            the seventh anniversary of the date on which the director
ceases to hold office as a director of the relevant Company; and

 

iv)                                  in the case of a Subsidiary Director, the
date that the Subsidiary Company ceases to be a wholly owned Subsidiary of
Westpac.

 

“Nominated
Beneficiary”
means each person, who is (or has been) a director or other statutory officer
(including a secretary, responsible officer or responsible manager) of a
company that is not Westpac or a Subsidiary Company, who has received written
confirmation from a Nominated Westpac Officer that they are a Nominated
Beneficiary and that the terms of this deed, as they relate to Nominated
Beneficiaries, apply to them.

 

“Nominated
Company” a
company, that is not Westpac or a Subsidiary Company, in respect of which a
Nominated Beneficiary acts as a director or other statutory officer.

 

“Nominated
Westpac Officer” means
an officer of Westpac authorised under delegated authority or Westpac policy to
approve the entry by Westpac into a contractual indemnity.

 

“Regulatory
Authority” means
the Australian Securities and Investments Commission, the Australian Prudential
Regulation Authority, a department of any Australian government, a public
authority, or an instrumentality or agency of the Crown in right of the
Commonwealth, in right of a State or in right of a Territory or the equivalent
of any of them in any other jurisdiction.

 

“Subsidiary” has the meaning given to that expression
in section 9 of the Corporations Act 2001 (Cth).

 

“Subsidiary
Company” means any
company which is a wholly owned Subsidiary of Westpac (excluding those Subsidiary
companies, other than St. George Bank Limited, which are included in the
official list of a prescribed financial market, as that phrase is used in Part 1.2A
of the Corporations Act 2001 (Cth)).

 

“Subsidiary
Director” means
each person who is (or has been) a director of a Subsidiary Company.

 

1.2          Interpretation

 

Headings are for
convenience only and do not affect interpretation.  The following rules of interpretation
apply unless the context requires otherwise:

 

(a)           the singular
includes the plural and conversely;

 

(b)           a gender includes
all genders;

 

(c)           where a word or phrase  is defined, its other grammatical forms have a
corresponding meaning;

 

(d)           a reference to a person  includes a body corporate, an unincorporated body or other
entity and conversely and, in the case of a natural person, includes a
reference to that person’s personal representatives, executors, administrators
and successors;

 

4

 

(e)           a reference to a clause, paragraph,
schedule or annexure is to
a clause of, a paragraph of, a schedule to or an annexure to, this deed and a
reference to this deed includes any schedules and annexures;

 

(f)            a reference to any agreement or document
is to that agreement or document as amended, novated, supplemented, varied or
replaced from time to time, except to the extent prohibited by this deed;

 

(g)           a reference to any legislation or
to any provision of any legislation includes any modification or re-enactment
of it, any legislative provision substituted for it and all regulations and
statutory instruments issued under it;

 

(h)           a reference to a specific time  for the performance of an obligation is a
reference to that time in the State, Territory or other place where that
obligation is to be performed;

 

(i)            a reference to writing  includes typewriting, printing, lithography,
photography and any other method of representing or reproducing words, figures
or symbols in a permanent and visible form;

 

(j)            mentioning anything after include,
includes or including does
not limit what else might be included;

 

(k)           where the day on or by which any sum is payable under
this deed or any act, matter or thing is to be done is a day other than a
Business Day such sum shall be paid and such act, matter or thing shall be done
on the next succeeding Business Day;

 

(l)            a word or phrase defined in the Corporations
Act 2001(Cth) has the same meaning when used in this deed;

 

(m)          a reference to an article of the
Constitution is a reference to that article as at the date of this
deed and includes any variation of or amendment to that article and any
provision in substitution of that article ; and

 

(n)           any reference to a director ceasing to hold office
shall be construed as not including any retirement of a director if, being
eligible and offering himself or herself for re-election, a director is
re-elected at the annual general meeting at which the director retired.

 

2.            INDEMNITY

 

2.1           Westpac indemnifies each Indemnified Beneficiary to
the fullest extent permitted by law with respect to all loss, cost and expense
(together called “Loss”) in
relation to:

 

i)              every liability incurred by the Indemnified
Beneficiary in its capacity as a director or other statutory officer of a
Company (except a liability for legal costs); and

 

ii)             all legal costs incurred in defending or resisting (or
otherwise in connection with) proceedings, whether civil or criminal or of an
administrative or investigatory nature, in which the Indemnified Beneficiary
becomes involved because of its capacity as a director or other statutory
officer of a Company,

 

subject to the provisions
in this Deed and in particular the exclusions in clause 2.6.

 

5

 

2.2           Subject to clause 3.7, if an Indemnified Beneficiary
becomes liable to pay any amount for which the Indemnified Beneficiary is or is
entitled to be indemnified under this deed, Westpac must indemnify the
Indemnified Beneficiary by paying that amount to the person to which that
amount is due within 30 days of the date on which the Indemnified Beneficiary provides
evidence satisfactory to Westpac that the Indemnified Beneficiary is liable to
pay that amount and is entitled to be indemnified under this deed.

 

2.3           It is not necessary for an Indemnified Beneficiary to
incur any expense or make any payment before enforcing the right of indemnity
under clause 2.1.

 

2.4           Subject to this deed and in particular clauses 2.6 and
5, the indemnification provided under clause 2.1:

 

(i)            has effect in respect of Acts prior to the date of
this deed and in respect of any liability which has been incurred prior to the
date of this deed;

 

(ii)           continues in full force and effect irrespective of one
or more previous applications of the right to be indemnified; and

 

(iii)          continues in full force and effect in relation to any
Act occurring or arising during each Indemnified Beneficiary’s period in office
even if the Indemnified Beneficiary has ceased to be a director or other statutory
officer of a Company before a claim is made by the Indemnified Beneficiary under
this deed.

 

2.5           If an Indemnified Beneficiary is insured or entitled
to the benefit of any contract of insurance in respect of any liability, costs
or expenses for which the Indemnified Beneficiary is entitled to
indemnification under this deed, the Indemnified Beneficiary must make and
pursue a claim under that insurance and, if Westpac has already made a payment
under this deed in respect of that liability or those costs or expenses to
which that insurance will respond, the Indemnified Beneficiary must, forthwith
upon receipt, pay or direct payment to Westpac of the proceeds of that
insurance.

 

2.6           Nothing in this clause 2 gives rise to an agreement to
indemnify the Indemnified Beneficiary in respect of:

 

(i)            any Loss arising out of conduct involving a lack of
good faith on the part of the Indemnified Beneficiary;

 

(ii)           any Loss to the extent caused by or rising from an act
or omission of the Indemnified Beneficiary prior to:

 

A)                                  in the
case of a Subsidiary Beneficiary, the relevant Company becoming a wholly owned Subsidiary of
Westpac; or

 

B)            in the
case of a Nominated Beneficiary, the Nominated Beneficiary receiving
confirmation from a Nominated Westpac Officer that they are a Nominated
Beneficiary;

 

(iii)          any Loss to the extent indemnity in respect of that
Loss is prohibited or would be made void under the Corporations Act (or any
other law) from time to time (including section 199A of the Corporations Act)
or, to the extent applicable, under any later version of the Corporations Act
or other applicable law;

 

(iv)          any Loss to the extent indemnity in respect of that
Loss is prohibited by the Constitution;

 

6

 

(v)           any Loss to the extent to which such Loss cannot be
indemnified without shareholder approval (if no such shareholder approval has
been obtained), such as any benefit given in connection with retirement under
section 200A of the Corporations Act;

 

(vi)          any Loss to the extent the it is indemnified by an
insurance policy which benefits the Indemnified Beneficiary and only to the
extent that the Indemnified Beneficiary recovers under that insurance policy;

 

(vii)         any Loss unless reasonable particulars of the relevant
act or omission (and of the amount of the Loss, to the extent known) are given
to Westpac in writing prior to midnight on the day which is the seventh
anniversary after the Indemnified Beneficiary last ceases to be a
director or other statutory officer of a Company; or

 

(viii)        any Loss to the extent it is caused by or arises from
acts or omissions of the Indemnified Beneficiary after the effective date of
revocation by Westpac, in accordance with this deed, of the benefit of this
deed from the Indemnified Beneficiary.

 

3.             PROCEEDINGS

 

3.1           Westpac may, by written notice to the Indemnified
Beneficiary, do any one or more of the following in relation to any Claim :

 

(i)            assume the conduct, or defence of the Claim;

 

(ii)           institute a crossclaim or counterclaim to the Claim;

 

(iii)          negotiate a settlement of the Claim;

 

(iv)          agree to any form of alternative dispute resolution
(including mediation) in relation to the Claim; or

 

(v)           subject to clause 3.6, retain lawyers to act on behalf
of both the Indemnified Beneficiary and Westpac in relation to the Claim,

 

and if Westpac does any
of the above, the conduct of the Claim will (to that extent) be under the
management and control of Westpac or its insurers.

 

3.2           In undertaking any of the things permitted under
clause 3.1, Westpac must, subject to any contrary direction from or requirement
of its insurers, have regard to the principle that the reputation of the
Indemnified Beneficiary should not unnecessarily be injured.

 

3.3           The Indemnified Beneficiary must:

 

(i)            give notice to Westpac promptly upon becoming aware of
any Claim, or circumstances which may give rise to a Claim, against the
Indemnified Beneficiary that may give rise to a right to be indemnified under
this deed;

 

(ii)           take such action as Westpac reasonably requests,
including action to avoid, dispute, resist, bring an appeal on, compromise or
defend any Claim or any adjudication of any Claim;

 

(iii)          not make any admission of liability in respect of or
settle any Claim without the prior written consent of Westpac;

 

7

 

(iv)          upon request by Westpac, render all reasonable
assistance and co-operation to Westpac in the conduct of any Claim including,
without limitation, providing Westpac with any documents, authorities and
directions that Westpac may reasonably require for the prosecution or
advancement of any Claim, cross-claim or counterclaim that is, in the opinion
of the Indemnified Beneficiary acting reasonably and in good faith, lawful,
true and not misleading; and

 

(v)           upon request by Westpac, do anything reasonably
necessary or desirable to enable Westpac (so far as it is possible) to be
subrogated to and enjoy the benefits of the Indemnified Beneficiary’s rights in
relation to any Claims against any third party and render such assistance as
may be reasonably requested by Westpac for that purpose.

 

3.4           The Indemnified Beneficiary is entitled to be
reimbursed by Westpac for actual costs and expenses reasonably incurred by the
Indemnified Beneficiary in taking action pursuant to clause 3.3(ii) or
providing assistance pursuant to clause 3.3 (iv) and (v).

 

3.5           Before compromising or settling any Claim, Westpac
must give written notice to the Indemnified Beneficiary of its intention to do
so and of the proposed terms of that compromise or settlement and if, within
such reasonable time as is specified in that notice, the Indemnified
Beneficiary objects to the proposed terms and states that the Indemnified
Beneficiary wishes to contest or continue the Claim, Westpac shall immediately
relinquish to the Indemnified Beneficiary conduct of the Claim and Westpac’s
liability under this deed in respect of that Claim shall not exceed the amount
for which the Claim could have been compromised or settled, at the time the
notice was given by Westpac to the Indemnified Beneficiary, on those proposed
terms, inclusive of costs and expenses actually incurred up to that time.

 

3.6           Nothing in this deed prohibits the Indemnified
Beneficiary from engaging separate legal or other representation and
participating in any Claim but any expenses incurred by the Indemnified
Beneficiary in so doing shall be paid or reimbursed by Westpac only to the
extent that those expenses are:

 

(i)            incurred prior to Westpac assuming conduct of that
Claim;

 

(ii)           incurred with the prior written authority of Westpac;
or

 

(iii)          reasonable and are incurred in circumstances where Westpac
has refused to authorise separate representation or participation and there is
a reasonable likelihood that the interests of the Indemnified Beneficiary and
of Westpac would conflict were the same lawyers to act on behalf of both the
Indemnified Beneficiary and Westpac.

 

3.7           If the Indemnified Beneficiary fails to perform an
obligation referred to in clause 3.3 to the material prejudice of Westpac in
relation to that Claim, Westpac is relieved from each and every obligation
under this deed in respect of that Claim.

 

4.             PAYMENT OF COSTS BEFORE THE
OUTCOME OF PROCEEDINGS IS KNOWN

 

4.1           Subject to clause 3.7, Westpac will at the request of the
Indemnified Beneficiary pay, or reimburse, the Indemnified Beneficiary for all
costs and expenses incurred by the Indemnified Beneficiary in respect of any
Claim provided that if it is
determined (whether before or after the outcome of any proceedings (including
any appeal) is known and whether civil, administrative or criminal) in relation
to that Claim that the Indemnified Beneficiary is not entitled to be
indemnified under clause 2.1 in respect of those costs 

 

8

 

and expenses, the
Indemnified Beneficiary must, within 30 days of being so notified by Westpac,
pay to Westpac all amounts previously paid or reimbursed by Westpac in respect
of that Claim. The amount to be paid shall be set out in the notice and, in the
absence of manifest error, shall be conclusive evidence of the amount to be
paid.

 

4.2           Once it has been determined under clause 4.1 that the
Indemnified Beneficiary is not entitled to be indemnified under clause 2.1, Westpac
shall have no further obligation to pay, or reimburse, the Indemnified
Beneficiary for any further costs, expenses or other liabilities in respect of
that Claim, whether or not incurred prior to that determination being made.

 

5.             REVOCATION

 

5.1           The benefit of this deed is automatically revoked in
relation to a Subsidiary Beneficiary on the date that the Subsidiary Company,
in respect of which that Subsidiary Beneficiary acts as a director or other statutory
officer, ceases to be a wholly owned Subsidiary of Westpac and such revocation
shall be effective with respect to any Loss to the extent caused by or arising
from acts or omissions occurring on or after the effective revocation date.

 

5.2           Westpac may revoke the benefit of this Deed in respect
of any Nominated Beneficiary by written notice to the last address given by
that Nominated Beneficiary and such revocation shall be effective with respect
to any Loss to the extent caused by or arising from acts or omissions occurring
on or after the effective revocation date specified in the notice (which date
must not be earlier than the date the notice is received at the address of the Nominated
Beneficiary).

 

6.             DIRECTORS’ AND OFFICERS’
INSURANCE

 

6.1           Subject to clause 6.4, Westpac must maintain a D&O
Policy during the Insurance Period in respect of each Westpac Director and each
Subsidiary Director.

 

6.2           During the Insurance Period, Westpac must use its best
endeavours to ensure that the terms of the D&O Policy, taken as a whole,
are not less favourable to each Westpac Director than:

 

(i)            the terms of the D&O Policy applicable to the
Westpac Director at the end of the Appointment Period; and

 

(ii)           the terms of the D&O Policy applicable to the
directors of the Westpac during the Insurance Period.

 

6.3           If requested by a Westpac Director or a Subsidiary
Director, Westpac must provide the director with a copy of each certificate of
currency in respect of the D&O Policy issued from time to time by the Westpac’s
insurance company.  Westpac must also
provide the director with a copy of the D&O Policy within 30 days of
any request from the director.

 

6.4           Westpac is not obliged to maintain the D&O Policy
where to do so would contravene any law, but Westpac must give reasonable
notice to each Westpac Director and each Subsidiary Director (as relevant) of
its intention to terminate the D&O Policy under this clause.

 

9

 

7.             SEVERANCE

 

7.1           If any provisions of this deed are
determined by any statute or any court to be illegal, invalid, void or voidable
the legality or validity of the remainder of this deed shall not be affected
and the illegal, invalid, void or voidable provisions shall be deemed deleted
from this deed to the same extent and effect as if never incorporated in this
deed but the remainder of this deed shall continue in full force and effect.

 

7.2           Clause 7.1 shall not be construed as permitting
anything that would be contrary to public policy.

 

8.             AMENDMENT

 

This deed may be amended
only be another deed executed by all parties who may be affected by the
amendment.

 

9.             ASSIGNMENT

 

The rights and
obligations of the Westpac Directors, Westpac Beneficiaries, Subsidiary
Beneficiaries and Nominated Beneficiaries under this deed are personal.  They cannot be assigned, charged or otherwise
dealt with, and no Westpac Director, Westpac Beneficiary, Subsidiary
Beneficiary or Nominated Beneficiary may attempt or purport to do so, without
the prior written consent of Westpac.

 

10.          WAIVER

 

No failure to exercise
and no delay in exercising any right, power or remedy under this deed operate
as a waiver.  Nor will any single or
partial exercise of any right, power or remedy preclude any other or further exercise
of that or any other right, power or remedy.

 

11.          NOTICES

 

11.1         Any notice or other communication given under this
deed must be in writing:

 

(a)            directed to the intended recipient at the address last
notified by the intended recipient to the sender; and

 

(b)           hand delivered or sent by prepaid post or facsimile to
that address.

 

11.2         A notice given in accordance with clause 11.1 is taken
to be received:

 

(a)           if hand delivered, on delivery;

 

(b)           if sent by prepaid post, three Business Days after the
date of posting;

 

(c)                                  if sent by facsimile, when the sender’s
facsimile system generates a message confirming successful transmission of the
total number of pages of the notice unless, within eight (8) Business
Hours after that transmission, the recipient informs the sender that it has not
received the entire notice.

 

10

 

12.          GOVERNING LAW

 

This deed shall be
governed by and construed in accordance with the law for the time being of New
South Wales and the parties hereby submit to the courts of that State (and of
all courts competent to hear appeals therefrom) in respect of all matters
arising under this deed or relating to it.

 

 

Executed as a Deed Poll

 

 

	
  This Deed was executed
  by Westpac Banking Corporation  by its
  undersigned attorneys who declare that they have not received any notice of
  revocation of the Power of Attorney registered in the Office of the
  Registrar-General (NSW) Book 4299 No. 332 under which the instrument was
  executed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael Johnston

  	
   

  	
  /s/ Anna Sandham 

  
	
  Tier
  One Attorney

  	
   

  	
  Tier
  One Attorney

  
	
   

  	
   

  	
   

  
	
  Michael Johnston 

  	
   

  	
  Anna Sandham 

  
	
  Name
  of Tier One Attorney

  	
   

  	
  Name
  of Tier One Attorney

  

 

11Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT
(this “Agreement”) made as of this 12 day of November, 2009 between
Prospect Acquisition Corp., a Delaware corporation (“Buyer” or “Prospect”),
and the signatory on the execution page hereof (“Seller”).

 

WHEREAS, Buyer was organized
for the purpose of acquiring, through a merger, capital stock exchange, asset
acquisition or other similar business combination, an operating business (“Business
Combination”); and

 

WHEREAS, Buyer consummated
an initial public offering in November, 2007 (“IPO”) in connection with
which it raised gross proceeds of approximately $250 million, a significant
portion of which was placed in a trust account pending the consummation of a
Business Combination, or the dissolution and liquidation of Buyer in the event
it is unable to consummate a Business Combination on or prior to November 14,
2009; and

 

WHEREAS, Buyer has entered
into that certain Agreement and Plan of Merger dated September 8, 2009, as
amended by Amendment No. 1 and Amendment No. 2 to the Agreement and
Plan of Merger dated October 22, 2009 and October 26, 2009,
respectively (the “Merger Agreement”), by and among Prospect, KW Merger
Sub Corp., a newly-formed Delaware corporation and wholly-owned subsidiary of Prospect
(“Merger Sub”) and Kennedy-Wilson, Inc. (“Kennedy-Wilson”),
which provides for the merger (the “Merger”) of Merger Sub with and into
Kennedy-Wilson as a result of which Kennedy-Wilson will become a wholly-owned
subsidiary of Prospect and outstanding shares of Kennedy-Wilson’s capital stock
will be exchanged for common stock of Prospect; and

 

WHEREAS, the approval of the
Merger is contingent upon, among other things, the affirmative vote of holders
of a majority of the outstanding common shares of Prospect issued in Prospect’s
IPO and present and eligible to vote at the special meeting called to approve
the Merger; and

 

WHEREAS, pursuant to certain
provisions in Buyer’s certificate of incorporation, a holder of shares of Buyer’s
common stock issued in the IPO may, if it votes against the Merger, demand that
Buyer convert such common shares into cash (“Conversion Rights”); and

 

WHEREAS the Merger cannot be
consummated if holders of 30% or more of Prospect common stock issued in the
IPO exercise their Conversion Rights; and

 

WHEREAS, Seller has agreed
to sell to Buyer and Buyer has agreed to purchase from Seller the common shares
set forth on the execution page of this Agreement (“Shares”) for
the purchase price per share set forth therein (“Purchase Price Per Share”)
and for the aggregate purchase price set forth therein (“Aggregate Purchase
Price”).

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

 

 

1.                                       Purchase. Subject to Section 6,
Seller hereby sells to Buyer and Buyer hereby purchases from Seller at the
Closing (as defined in Section 3(c)) the Shares at the Purchase Price Per
Share, for the Aggregate Purchase Price.

 

2.                                       Agreement not
to Convert; Appointment of Proxy and Attorney-in-Fact.  In further consideration of the Aggregate
Purchase Price, Seller hereby agrees it has not and will not exercise its
Conversion Rights or, if it has already exercised its Conversion Rights, it
hereby withdraws and revokes such exercise. Seller acknowledges that the record
date to vote on the proposals set forth in the proxy statement/prospectus (the “Proxy
Statement”) filed by Buyer with the U.S. Securities Exchange Commission
(the “SEC”) has passed. Accordingly, solely with respect to the vote for
the Merger and the other proposals set forth in the Proxy Statement, Seller
hereby irrevocably appoints David A. Minella and James J. Cahill and each of
them each with full power of substitution, as Seller’s proxy and
attorney-in-fact, to the full extent of Seller’s rights with respect to the
Shares (and any and all other shares or securities or rights issued or issuable
in respect thereof) to vote in such manner as each such person or his
substitute shall in his sole discretion deem proper. Execution by Seller of
this Agreement shall revoke, without further action, all prior proxies granted
by Seller at any time with respect to the Shares (and such other shares or other
securities) and no subsequent proxies will be given by Seller (and if given
will be deemed not to be effective).

 

3.                                       Closing Matters.

 

(a)                                  Within one
business day of the date of this Agreement, (i) Seller shall provide Buyer
with a true and correct copy of a print out of the voting instruction with
respect to the Shares held by Seller; and (ii) Buyer shall send the notice
attached as Annex 1 hereto to Prospect’s transfer agent.

 

(b)                                 Prior to the
Closing, Seller shall deliver or cause to be delivered to Buyer appropriate
instructions for book entry transfers of ownership of the Shares from Seller to
Buyer.

 

(c)                                  The closing of
the purchase and sale of the Shares (“Closing”) will occur on the date
on which Buyer’s trust account is liquidated after the Merger is consummated
(the “Closing Date”).  The Company
shall use commercially reasonable efforts to cause the trust account to be
liquidated on the date of the Merger but in no event shall such liquidation
occur more than one business day after the Merger.  At the Closing, Buyer shall pay Seller the
Aggregate Purchase Price by wire transfer from Prospect’s trust account of
immediately available funds to an account specified by Seller and Seller shall
deliver the Shares to Buyer electronically using the Depository Trust Company’s
DWAC (Deposit/Withdrawal at Custodian) System to an account specified by
Buyer.  In the event the trust account
does not contain sufficient funds to satisfy the Aggregate Purchase Price on
the Closing Date, Buyer shall pay Seller, by wire transfer, such additional
amounts from sources other than the trust account to satisfy the Aggregate
Purchase Price.  It shall be a condition
to the obligation of Buyer on the one hand and Seller on the other hand, to
consummate the transfer of the Shares contemplated hereunder that the other
party’s representations and warranties are true and correct on the Closing Date
with the same effect as though made on such date, unless waived in writing by
the party to whom such representations and warranties are made.

 

 

4.                                       Representations
and Warranties of the Seller. Seller hereby represents
and warrants to Buyer on the date hereof and on the Closing that:

 

(a)                                  Sophisticated
Seller. Seller is sophisticated in financial matters and is able to evaluate
the risks and benefits attendant to the sale of Shares to Buyer.

 

(b)                                 Independent
Investigation. Except for the representations of Seller contained
in this Agreement, Seller, in making the decision to sell the Shares to Buyer,
has not relied upon any oral or written representations or assurances from
Buyer or any of its officers, directors or employees or any other
representatives or agents of Buyer. Seller has had access to all of the filings
made by Prospect with the SEC, pursuant to the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and the Securities Act of 1933, as
amended, in each case to the extent available publicly via the SEC’s Electronic
Data Gathering, Analysis and Retrieval system.

 

(c)                                  Authority. This
Agreement has been validly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery thereof by Buyer, is a
valid and binding agreement enforceable in accordance with its terms, subject
to the general principles of equity and to bankruptcy or other laws affecting
the enforcement of creditors’ rights generally. The execution, delivery and
performance of this Agreement by Seller does not and will not conflict with,
violate or cause a breach of, constitute a default under, or result in a
violation of (i) any agreement, contract or instrument to which Seller is
a party which would prevent Seller from performing its obligations hereunder or
(ii) any law, statute, rule or regulation to which Seller is subject.

 

(d)                                 No Legal Advice
from Buyer. Seller acknowledges that it has had the
opportunity to review this Agreement and the transactions contemplated by this
Agreement with Seller’s own legal counsel and investment and tax advisors.
Seller is not relying on any statements or representations of Buyer or any of
its representatives or agents for legal, tax or investment advice with respect
to this Agreement or the transactions contemplated by the Agreement.

 

(e)                                  Ownership of
Shares. At the closing, Seller will be the legal and beneficial owner of the
Shares and will transfer to Buyer on the Closing Date good and marketable title
to the Shares free and clear of any liens, claims, security interests, options,
charges or any other encumbrance whatsoever. The Seller beneficially owned all
of the Shares as of the close of the trading day on October 26, 2009 and
has the sole right to exercise conversion rights with respect to all of the
Shares.

 

(f)                                    Number of
Shares. The Shares being transferred pursuant to this Agreement represent all
the common stock owned by Seller as of the date hereof.

 

5.                                       Representations
and Warranties of Buyer . Buyer hereby represents to the Seller
that:

 

(a)                                  Sophisticated
Buyer. Buyer is sophisticated in financial matters and is able to evaluate
the risks and benefits attendant to the purchase of Shares from Seller.

 

 

(b)                                 Independent
Investigation. Except for the representations of Seller contained
in this Agreement, Buyer, in making the decision to purchase the Shares from
Seller, has not relied upon any oral or written representations or assurances
from Seller or any of its officers, directors, partners or employees or any
other representatives or agents of Seller.

 

(c)                                  Authority. This
Agreement has been validly authorized, executed and delivered by Buyer and
assuming the due authorization, execution and delivery thereof by Seller, is a
valid and binding agreement enforceable in accordance with its terms, subject
to the general principles of equity and to bankruptcy or other laws affecting
the enforcement of creditors’ rights generally. The execution, delivery and
performance of this Agreement by Buyer does not and will not conflict with,
violate or cause a breach of, constitute a default under, or result in a
violation of (i) any agreement, contract or instrument to which Buyer is a
party which would prevent Buyer from performing its obligations hereunder or (ii) any
law, statute, rule or regulation to which Buyer is subject.  All consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings with any governmental or other authority on the part of Buyer required
in connection with the consummation of the transactions contemplated by this
Agreement, including the purchase of the Shares, have been or shall have been
obtained prior to and be effective as of the Closing.

 

(d)                                 No Legal Advice
from Seller. Buyer acknowledges that it has had the opportunity
to review this Agreement and the transactions contemplated by this Agreement
with Buyer’s own legal counsel and investment and tax advisors.  Except for the representations of Seller
contained in this Agreement, Buyer is relying solely on such counsel and
advisors and not on any statements or representations of Seller or any of its
representatives or agents for legal, tax or investment advice with respect to
this Agreement or the transactions contemplated by this Agreement.

 

6.                                       Termination.
Notwithstanding any provision in this Agreement to the contrary, this Agreement
shall become null and void and of no force and effect upon the earlier to occur
of (a) the termination of the Merger Agreement or (b) 11:59 Eastern
Time on November 14, 2009 if the Merger has not been consummated by such
time. Notwithstanding any provision in this Agreement to the contrary, Buyer’s
obligation to purchase the Shares from Seller shall be conditioned on the
consummation of the Merger.

 

7.                                       Covenant of
Seller. After the execution of this Agreement and prior to Closing, Seller
shall not acquire any common stock, warrants or other securities of Prospect or
effect any derivative transactions with respect thereto.

 

8.                                       Acknowledgement;
Waiver. Seller (i) acknowledges that Buyer may possess or have access to
material non-public information which has not been communicated to Seller; (ii) hereby
waives any and all claims, whether at law, in equity or otherwise, that he,
she, or it may now have or may hereafter acquire, whether presently known or
unknown, against Buyer or any of its officers, directors, employees, agents,
affiliates, subsidiaries, successors or assigns relating to any failure to
disclose any non-public information in connection with the transaction
contemplated by this Agreement, including without limitation, any claims
arising under Rule 10-b(5) of the Exchange Act; and (iii) is
aware that Buyer is relying on the truth of the representations set forth in Section 4
of this Agreement and the foregoing acknowledgement and 

 

 

waiver in clauses (i) and
(ii) above, respectively, in connection with the transactions contemplated
by this Agreement.

 

9.                                       Counterparts;
Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
This Agreement or any counterpart may be executed via facsimile transmission,
and any such executed facsimile copy shall be treated as an original.

 

10.                                 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. Each of the
parties 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. Each of the parties hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.

 

11.                                 Remedies. Each of the
parties hereto acknowledges and agrees that, in the event of any breach of any
covenant or agreement contained in this Agreement by the other party, money
damages may be inadequate with respect to any such breach and the non-breaching
party may have no adequate remedy at law. It is accordingly agreed that each of
the parties hereto shall be entitled, in addition to any other remedy to which
they may be entitled at law or in equity, to seek injunctive relief and/or to
compel specific performance to prevent breaches by the other party hereto of
any covenant or agreement of such other party contained in this Agreement.

 

12.                                 Binding Effect;
Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns. This Agreement shall not be assigned by
either party without the prior written consent of the other party hereto.

 

13.                                 Headings. The
descriptive headings of the Sections hereof are inserted for convenience only
and do not constitute a part of this Agreement.

 

14.                                 Entire
Agreement; Changes in Writing. This Agreement constitutes
the entire agreement among the parties hereto and supersedes and cancels any
prior agreements, representations and warranties, whether oral or written,
among the parties hereto relating to the transaction contemplated hereby.
Neither this Agreement not any provision hereof may be changed or amended
orally, but only by an agreement in writing signed by the other party hereto.

 

[Signature
Page Follows]

 

 

IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date set forth on the first page of
this Agreement.

 

	
   

  	
  PROSPECT ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. Cahill

  
	
   

  	
  Name: James J. Cahill

  
	
   

  	
  Title: Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARROWGRASS MASTER FUND LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Flynn

  
	
   

  	
  Name: Sean Flynn

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Purchase Price Per Share:
  $ 9.95

  	
   

  
	
  Number of Shares:
  1,386,338

  	
   

  
	
  Aggregate Purchase Price:
  $ 13,794,063.10

  	
   

  

 

 

Annex 1

 

PROSPECT ACQUISITION CORP.

9130 GALLERIA COURT, SUITE 318

NAPLES, FLORIDA 34109

 

November    ,
2009

 

Continental Stock Transfer &
Trust Company

17 Battery Place

New York, New York 10004

 

Attn:

 

Re:
Trust Account No. [NUMBER]

 

Gentlemen:

 

Prospect Acquisition Corp.
(the “Company”) is providing these irrevocable instructions to you in
connection with the above-described Trust Account established in connection
with and pursuant to an Investment Management Trust Agreement dated as of November 14,
2007 between the Company and Continental Stock Transfer & Trust
Company as Trustee (the “Trust Agreement”). Upper case terms used herein
shall have the meanings ascribed to such terms in the Trust Agreement.

 

In the event the Company
delivers to you a Termination Letter substantially in the form of Exhibit A
to the Trust Agreement, in addition to the other documents required to be
delivered pursuant to Exhibit A of the Trust Agreement, on such date,
then, in consideration for the electronic transfer of [1,386,338] shares of the
Company’s common stock, using the Depository Trust Company’s DWAC
(Deposit/Withdrawal at Custodian) System, to an account specified by the
Company, on the Consummation Date you are irrevocably instructed to deliver as
the initial distribution of funds from the Trust Account the sum of
[13,794,063.10], which must be delivered to Arrowgrass Master Fund Ltd. in
accordance with the bank wire instructions provided to you below.

 

[INSTRUCTIONS]

 

In order to expedite
payment, attached is Arrowgrass Master Fund Ltd’s Form W-9.

 

 

The address for Arrowgrass Master Fund Ltd.  is PO Box 309, Ugland House  South Church Street, Grand Cayman KY1-1104,
Cayman Islands. With additional contact information of: Arrowgrass Capital
Partners LLP, Level 39, Tower 42, 25 Old Broad Street, London EC2N 1HQ,United
Kingdom, Attn: Legal.

 

Kindly acknowledge where
indicated below, your receipt and understanding of these instructions and
return a copy to Bingham McCutchen LLP, attn: Kate Ness, facsimile number
(617)-951-8736.

 

A facsimile signed and
electronically delivered copy of this letter shall be deemed an original.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PROSPECT ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James J. Cahill

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Acknowledged and Agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CONTINENTAL STOCK
  TRANSFER &

  	
   

  	
   

  
	
  TRUST COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARROWGRASS MASTER FUND
  LTD.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]