Exhibit 10.1

AMENDMENT NO. 1 TO

AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT NO. 1 (this “ Amendment ”) dated as of October 22, 2009, to that certain AGREEMENT AND PLAN OF MERGER dated as of September 8, 2009 (the “ Original Agreement ”), by and among PROSPECT ACQUISTION CORP., a company incorporated under the laws of Delaware (“ Prospect ”), KW MERGER SUB CORP., a company incorporated under the laws of Delaware and a wholly owned subsidiary of Prospect (“ Merger Sub ”) and KENNEDY-WILSON, INC., a company incorporated under the laws of Delaware (“ KW ”).

RECITALS

WHEREAS, the Parties are parties to the Original Agreement; and

WHEREAS, the Parties wish to amend the Original Agreement pursuant to and in accordance with Section 11.2 thereof as further set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Original Agreement, pursuant to and in accordance with Section 11.2 of the Original Agreement, the Parties agree to amend the Original Agreement as follows:

1.   Definitions.   All capitalized terms used herein without definition shall have the meanings assigned to such terms in the Original Agreement.

2.   Amendment to Background Section.   The fourth full paragraph of the Background section of the Original Agreement shall be deleted in its entirety and replaced with the following:

“Concurrently with the execution of this Agreement, Prospect, the Prospect Founders, De Guardiola Advisors, Inc. (“ DGA