Prospect Acquisition Corp. 25,000,000 Units(1) Common Stock Warrants Underwriting AgreementProspect Acquisition Corp • October 17th, 2007 • Blank checks • New York
Prospect Acquisition Corp., a corporation organized under the laws of Delaware (the "Company"), proposes to sell to the several underwriters named in Schedule I hereto (the "Underwriters"), for whom Citigroup Global Markets, Inc. (the "Representative") is acting as representative, an aggregate of 25,000,000 units (the "Units") of the Company (said Units to be issued and sold by the Company being hereinafter called the "Underwritten Securities"). The Company also proposes to grant to the Underwriters an option to purchase up to an additional 3,750,000 Units to cover over-allotments (the "Option Securities"; the Option Securities, together with the Underwritten Securities, being hereinafter called the "Securities"). The offer and sale of the Securities by the Underwriters is referred to herein as the "Offering." Certain capitalized terms used in this agreement and not otherwise defined are defined in Section 20 hereof.
PROSPECT ACQUISITION CORP. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant AgentWarrant Agreement • October 17th, 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 • October 17th, 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 • October 17th, 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 • October 17th, 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 • October 17th, 2007 • Blank checks • New York
PROSPECT ACQUISITION CORP. SPONSORS' WARRANTS PURCHASE AGREEMENTWarrants Purchase Agreement • October 17th, 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").
INVESTMENT MANAGEMENT TRUST AGREEMENTInvestment Management Trust Agreement • October 17th, 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").
STOCK PURCHASE AND SALE AGREEMENTStock Purchase and Sale Agreement • October 17th, 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 October 15, 2007, is made and entered into by and among the Flat Ridge Sellers identified on Schedule B hereto, the Cahill Sellers identified on Schedule C hereto (each of the Flat Ridge Sellers and the Cahill Sellers, a "Seller" and collectively, the "Sellers"), Flat Ridge Investments LLC ("Flat Ridge") and James Cahill ("Cahill", each of Flat Ridge and Cahill, a "Buyer" and collectively, the "Buyers"). Certain capitalized terms are defined on Schedule A to this Agreement.
