On November 13, 2009, the Company announced that it had closed the Merger contemplated by the Merger Agreement. As a result of the Merger, Kennedy-Wilson became a wholly-owned subsidiary of Prospect and Prospect changed its name to Kennedy-Wilson Holdings, Inc.

In connection with the Merger, the holders of Kennedy-Wilson common stock and preferred stock received an aggregate of 26 million shares of Prospect common stock (minus any dissenting shares) with each share of Kennedy-Wilson common stock automatically converting into the right to receive 3.8031 shares of Prospect common stock and each share of Kennedy-Wilson preferred stock automatically converting into the right to receive 105.6412 shares of Prospect common stock. A description of the Merger and the Merger Agreement is included in the Proxy Statement/Prospectus beginning on page 89 and page 140, respectively, which information is incorporated herein by reference.

Disclosure responsive to Item 2.01(b) through (e) of Form 8-K is included in the Proxy Statement/Prospectus under "Business of Kennedy-Wilson" beginning on page 211, "Information Related to Prospect" beginning on page 195, "The Merger Proposal" beginning on page 89 and "The Merger Agreement" beginning on page 140, which information is incorporated herein by reference.

Immediately following the consummation of the Merger, KW Holdings had 41,196,068 shares of common stock and warrants to purchase 17,750,000 shares of common stock outstanding. KW Holdings common stock and warrants are listed on AMEX under the new symbols "KWIC" and "KWIC.WS," respectively. Approximately $247.7 million was held in the trust account as of October 26, 2009, the record date for the Prospect special meeting of warrantholders and special meeting of stockholders. Upon consummation of the Merger, the funds were disbursed as follows: approximately $94.4 million to parties who executed certain Purchase Agreements with Prospect; approximately $44.0 million to Continental Stock Transfer & Trust Co. to be released to Prospect stockholders who voted against the transaction and properly elected to convert their shares to a pro rata portion of the trust account; approximately $6.9 million to Continental Stock Transfer & Trust Co. to be released to Prospect warrantholders who elected the cash amount in exchange for their public warrants or Prospect warrantholders who elected the amended warrant option and were pro-rata reduced in order to meet the minimum of 12,500,000 warrants electing the cash option. After payment of expenses incurred by

Prospect and Kennedy-Wilson, which totaled approximately $13.7 million, approximately $88.7 million of net proceeds were retained by KW Holdings. Additional deal-related expenses of approximately $2 million are expected to be paid from the KW Holdings operating account post-close.

Business

Descriptions of Kennedy-Wilson's and Prospect's businesses are included in the Proxy Statement/ Prospectus under "Business of Kennedy-Wilson" beginning on page 211 and "Information Related to Prospect" beginning on page 195, which information is incorporated herein by reference.

Risk Factors

Certain risks associated with the businesses of Kennedy-Wilson and Prospect . . .

In connection with the Merger, a convertible subordinated note with a principal amount of $30 million that was issued by Kennedy-Wilson to Guardian Life Insurance Company of America ("Guardian") in November 2008 (the "Guardian Note") became convertible into shares of KW Holdings common stock pursuant to the terms of the Guardian Note. The Guardian Note bears interest at a fixed rate of 7%, payable quarterly, and the outstanding principal is due on November 3, 2018. Under the terms of the Merger Agreement and a letter agreement entered into between Kennedy-Wilson and Guardian on October 8, 2009, following the consummation of the Merger, Guardian has an option to convert, in whole or in part, the outstanding principal balance and accrued interest into common stock at a conversion price of $9.86 per share any time prior to May 3, 2017. At any time on or after May 3, 2017 and prior to the due date, KW Holdings may demand that Guardian convert the note in accordance with its terms. As of October 22, 2009, the outstanding principal balance and accrued interest of the Guardian Note were $30 million and $466,666, respectively. Upon consummation of the Merger, the estimated number of shares of common stock into which the Guardian Note will be convertible is 3,042,466.

The preceding summary of the Guardian Note and the letter agreement is qualified in its entirety by reference to the complete text of the promissory note and letter agreement, which were filed as Exhibits 10.28 and 10.118, respectively, to the Registration Statement on Form S-4 that includes the Proxy Statement/Prospectus.

A description of KW Holdings' common stock and other securities as in effect following the closing of the Merger is included under "Description of Prospect Securities" beginning on page 278 of the Proxy Statement/Prospectus, which information is incorporated herein by reference.

Additionally, a description of changes to KW Holdings' sponsors' warrants and public warrants as in effect following the closing of the Merger is included under "The Warrant Amendment Proposal" beginning on page 86 of the Proxy Statement/Prospectus, which information is incorporated herein by reference.

Immediately following the consummation of the Merger, former Prospect stockholders will hold approximately 31% of the total combined voting power of KW Holdings' outstanding common stock. The information set forth in Items 1.01 and 5.02 of this Current Report on Form 8-K is incorporated herein by reference.

Effective immediately upon consummation of the Merger, David A. Minella resigned as the Chairman and Chief Executive Officer of Prospect, James J. Cahill resigned as Chief Financial Officer of Prospect and Patrick J. Landers resigned as President of Prospect.

The following persons were appointed as officers of KW Holdings effective upon consummation of the Merger:

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º William J. McMorrow, Chief Executive Officer;

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º Freeman A. Lyle, Executive Vice President, Chief Financial Officer, Treasurer and Secretary;

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º Barry S. Schlesinger, Co-CEO of KW Commercial Investment Group;

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º James A. Rosten, President of Kennedy-Wilson Properties;

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º Donald J. Herrema, CEO of KW Capital Markets; and

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º Robert E. Hart, President of KW Multi-Family Management Group.

Effective immediately upon consummation of the Merger, the following persons resigned as directors of Prospect: Michael P. Castine, William Cvengros, Michael Downey, Daniel Gressel, William Landman, Patrick J. Landers and John Merchant.

Effective upon the closing of the Merger, the following persons are the members of KW Holdings' board of directors:

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º Cathy Hendrickson and Thomas Sorell in the class to stand for reelection in 2010;

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º Jerry Solomon and David A. Minella in the class to stand for reelection in 2011; and

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º William J. McMorrow, Kent Mouton and Norman Creighton in the class to stand for reelection in 2012.

Biographical and compensation-related information for each of the foregoing persons is included in the Proxy Statement/Prospectus under "The Director Election Proposal" beginning on page 186 and "Executive Compensation" beginning on page 243, and information regarding certain relationships and related transactions relative to the foregoing persons, to the extent applicable, is included in the Proxy Statement/Prospectus under "Certain Relationships and Transactions with Related Persons" beginning on page 269, which information is incorporated herein by reference.

The audit committee, compensation committee and nominating committees of KW Holding's board of directors after the Merger are comprised of Messrs. Creighton and Minella and Ms. Hendrickson, with Mr. Creighton serving as chair of the audit committee and compensation committee and Ms. Hendrickson serving as chair of the nominating committee.

In connection with the consummation of the Merger, KW Holdings adopted the 2009 Plan, which was approved by the Prospect stockholders on November 13, 2009. Information regarding the 2009 Plan set forth under "The Equity Participation Plan Proposal" beginning on page 176 of the Proxy Statement/Prospectus is incorporated herein by reference. A copy of the 2009 Plan is included as Annex E to the Proxy Statement/Prospectus.

On November 18, 2009, the Company, William J. McMorrow, the Chief Executive Officer of KW Holdings, and Mary Ricks, Co-CEO of KW Commercial Investment Group, entered into a Waiver and Modification With Respect to Employment Agreement Amendments, pursuant to which: (a) Mr. McMorrow voluntarily waived his right to receive a $4.425 million bonus payment on January 1, 2011 upon the fulfillment of certain conditions as set forth in Section 12 of his employment agreement; and (b) Ms. Ricks voluntarily waived her right to receive a $1.0 million bonus payment on January 1, 2011 upon the fulfillment of certain conditions as set forth in Section 13 of her employment agreement.

The preceding summary of the Waiver and Modification With Respect to Employment Agreement Amendments is qualified in its entirety by reference to the complete text of the Waiver and Modification With Respect to Employment Agreement Amendments, which a form of is attached to this Current Report as Exhibit 10.1 and is incorporated herein by reference.

In connection with the Merger, on November 13, 2009, Kennedy-Wilson filed an amended and restated certificate of incorporation with the Delaware Secretary of State amending and restating its previous amended and restated certificate of incorporation. The form of the amended and restated

certificate of incorporation as currently in effect was filed as Exhibit 3.3 to the Registration Statement on Form S-4 that includes the Proxy Statement/Prospectus.

The information under Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

(a) Financial Statements of Businesses Acquired.

Financial information relating to Kennedy-Wilson is included in the Proxy Statement/Prospectus beginning on page F-31, which information is incorporated herein by reference.

Financial statements of KW Residential LLC and Subsidiaries for the fiscal years ended December 31, 2007 and 2008 are filed herewith beginning on page F-1.

Financial statements of Kennedy-Wilson and Subsidiaries for the nine months ended September 30, 2009 are filed herewith beginning on page F-16.

(b) Pro Forma Financial Information.

Pro forma financial information relating to KW Holdings is filed herewith beginning on page PF-1.

(c) Shell Company Transactions.

The information included in Items 9.01(a) and 9.01(b) of this Current Report on Form 8-K is incorporated herein by reference.

(d)  Exhibits

 Exhibit No.                                Description
         10.1   Waiver and Modification With Respect to Employment Agreement
                Amendments