PROSPECT ACQUISITION CORP. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant AgentWarrant Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
WARRANT AGREEMENT dated as of [ • ], 2007, between Prospect Acquisition Corp., a Delaware corporation (the "Company"), and Continental Stock Transfer & Trust Company, a New York corporation, as Warrant Agent (the "Warrant Agent").
REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of the day of , 2007, by and among Prospect Acquisition Corp., a Delaware corporation (the "Company") and the undersigned parties listed under Investor on the signature page hereto (each, an "Investor" and collectively, the "Investors").
QuickLinks -- Click here to rapidly navigate through this documentProspect Acquisition Corp • September 10th, 2007 • Blank checks • New York
This letter is being delivered to you in accordance with the Underwriting Agreement (the "Underwriting Agreement") entered into by and between Prospect Acquisition Corp., a Delaware corporation (the "Company"), and Citigroup Global Markets Inc., as representative of the underwriters named therein (the "Underwriters"), relating to an underwritten initial public offering (the "IPO") of the Company's units (the "Units"), each Unit composed of one share of the Company's common stock, par value $0.0001 per share (the "Common Stock"), and one warrant, which is exercisable for one share of Common Stock (the "Warrants"). Certain capitalized terms used herein are defined in paragraph 3 hereof.
QuickLinks -- Click here to rapidly navigate through this documentEscrow Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
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").
FORM OF INSIDER LETTERProspect Acquisition Corp • September 10th, 2007 • Blank checks • New York
PROSPECT ACQUISITION CORP. SPONSORS' WARRANTS PURCHASE AGREEMENTWarrants Purchase Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
THIS SPONSORS' WARRANTS PURCHASE AGREEMENT (as it may from time to time be amended and including all exhibits referenced herein, this "Agreement"), dated as of [ • ], 2007, is entered into by and among Prospect Acquisition Corp, a Delaware corporation (the "Company") and the purchasers listed in Schedule A hereto (each a "Purchaser" and collectively, the "Purchasers").
STOCK PURCHASE AND SALE AGREEMENTSale Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
This Stock Purchase and Sale Agreement (as it may from time to time be amended, this "Agreement"), dated as of September 6, 2007, is made and entered into by and among LLM Structured Equity Fund L.P., a Delaware limited partnership ("LLM Structured Equity"), LLM Investors L.P., a Delaware limited partnership ("LLM Investors") and Capital Management Systems, Inc. ("CMS") (each a "Seller" and collectively, the "Sellers") and James Cahill (the "Buyer"). Certain capitalized terms are defined on Schedule A to this Agreement.
STOCK PURCHASE AND SALE AGREEMENTPurchase and Sale Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
This Stock Purchase and Sale Agreement (as it may from time to time be amended, this "Agreement"), dated as of September 6, 2007, is made and entered into by and among Flat Ridge Investments LLC (the "Seller) and Michael Downey (the "Buyer"). Certain capitalized terms are defined on Schedule A to this Agreement.
INVESTMENT MANAGEMENT TRUST AGREEMENTManagement Trust Agreement • September 10th, 2007 • Prospect Acquisition Corp • Blank checks • New York
This Agreement is made as of [ • ], 2007 by and between Prospect Acquisition Corp., a Delaware corporation (the "Company"), and Continental Stock Transfer & Trust Company (the "Trustee").
